Off Peak

Fortnightly Magazine - August 1998
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WHEN IT COMES TO PLEASING CONSUMERS, THE electric industry can learn something from telephone companies. A recent study by Aragon Consulting Group suggests that more consumers nationwide are satisfied with their local phone service than with their electric service.

This conclusion stems from a sampling of 3,375 consumers from all regions of the country. Nationwide 65.2 percent of local telephone customers said they were satisfied with their service, compared with only 54.7 percent of electric utilities customers (see Chart 1). Yet both utilities received poor marks from about 10 percent of their customers.

Breaking satisfaction levels down by region shows that consumers in the South generally are more satisfied with their utilities (69.4 percent, telephone; 58.6 percent, electric) than consumers in the Northeast (63.5 percent, telephone; 50.9 percent, electric).

"Generating the highest levels of customer satisfaction becomes crucial as industries are deregulated," said Gary Miller, chairman of Aragon. This statement leads to another key question: When options become available, how much loyalty can electric and local phone industries expect?

According to Aragon, not very much. The study did not find much of a correlation between customers' satisfaction levels and loyalty. "[W]e can safely conclude that high satisfaction levels ... do not produce a sense of loyalty," the report says.

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