In the highly competitive Texas electric market, customers are now less likely to recommend their retail electric provider (REP). The Texas REP average net promoter score (NPS) is down to 15, a significant decline from 18 in 2018. This drop in NPS is troubling for REPs as the metric is used by management teams to determine both brand strength and growth potential. This finding is from the Cogent Syndicated Texas REP Trusted Brand study from Escalent, a top human behavior and analytics firm.
NPS is derived from subtracting the percentage of customers who are brand “detractors” from those who are “promoters.” The more positive the outcome, the more likely it is that customers will promote their REP to others and advocate for the brand. The study, which surveys over 5,300 residential customers annually, finds that the decline in NPS is due to a higher number of brand “detractors” than in 2018. A 104-point gap between the highest- and lowest-scoring REPs indicates that some retail brands are failing to create strong and lasting connections with their customers. However, the staggering gap also indicates that the 10 top-scoring REPs are very well positioned to grow their customer bases thanks to strong brand preference.
“Customers are recommending a few elite Texas REP brands based upon their NPS. That advocacy can translate to better franchise values and increased market share,” said Chris Oberle, senior vice president at Escalent. “The large NPS performance gap indicates the market is ripe for a shakeout, where the top 10 brands have an opportunity to grab the lion’s share of customers.”
The top 10 Texas REPs that customers recommend others should use are:
Top Scoring on Net Promoter Score
|4Change Energy||Champion Energy Services|
|Acacia Energy||Just Energy|
|Alliance Power||NEC Retail|
|American Light & Power||WTU Retail|
|Beyond Power||Xoom Energy|
The following is a ranking of Texas retail electric providers on year-end 2019 net promoter scores.
|Texas Retail Electric Provider||Net Promoter Score|
|American Light & Power||40|
|Champion Energy Services||31|
|Green Mountain Energy||25|
|CPL Retail Energy||14|
|First Choice Power||11|
Source: Escalent. Cogent Syndicated. Texas REP Trusted Brand.
Cogent Syndicated measures customer engagement and brand trust among customers of Texas retail electric providers by surveying 5,361 customers across providers based upon data-driven models. The study measures key performance indicators (KPIs) to provide management perspectives on how to improve REP brand positioning, sales and promotion, customer trust, effective messaging, product sales, customer experiences, service quality, customer acquisition and loyalty. Escalent’s Brand Trust model comprises nine factors: community support, customer focus, communications effectiveness, environmental dedication, local reputation, reliable quality, competitive rates, enhanced offerings, and billing and customer service. The study collects a demographically representative sample across all Texas service territories open for retail electric competition. Escalent will supply the exact wording of any survey question upon request.
For more on the report, click below.