by Brianna Crandall — November 3, 2014—Growth partnership company Frost & Sullivan has just released the results of a customer survey conducted to determine customer perception and purchase criteria for electricity and energy service management among commercial and industrial (C&I) companies. The survey indicates that U.S. customers are satisfied with their existing provider, and very few intend to change their provider at the end of their contract.
The analysis surveyed 250 medium and large commercial and industrial companies across five verticals: manufacturing, data centers, hospitals, small franchises, and education.
Highlights of the survey findings:
- Among customers with five-year contracts, financial viability and line of credit were more important purchase criteria than power reliability.
- On average, electricity accounts for 9%-11% of yearly operating costs, and up to 20% for select customers.
- Approximately 40% of C&I customers expect their electricity consumption to increase in the next 24 months.
- Approximately 80% of C&I customers are concerned about the future costs of energy.
“Nevertheless, the majority of customers do not plan to switch providers to lower energy costs, as they perceive little product differentiation among the utilities,” says Frost & Sullivan Energy and Environmental Principal Consultant Farah Saeed. “Therefore, vendors that focus on product development and enhanced offerings, particularly in the area of energy management, will win new customers.”
Energy providers can offer customer value and differentiation through services such as supply management, energy efficiency management, facility optimization and demand response, points out Frost & Sullivan. However, most customers conduct these functions in-house and do not seek to outsource them to third-party vendors.
According to the report, nearly 70% of those who do outsource energy management services prefer utilities as the primary vendors. They may be persuaded to collaborate with a third-party energy management solution provider if it can clearly demonstrate operational cost savings, adds F&S.
“Currently, customers do not comprehend the difference between distribution utility and competitive electricity retailer,” notes Saeed. “Therefore, appropriate marketing campaigns that promote the benefits of deregulations will go a long way in increasing participants’ market shares and brand awareness.”
F&S offers complimentary access to more information on this research. Commercial and Industrial Customers in the U.S. Deregulated Electricity Market is part of the Energy & Power Growth Partnership Service program. All related F&S studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
