Electricity and gas companies have been ranked amongst the least trusted brands in Australia, as high energy prices and confusing customer offerings take their toll on customer perceptions.
The pollster found that electricity, gas and water companies rank amongst the lowest in terms of consumer trust, with the utilities sector ranking 22nd out of 25 industry sectors surveyed by Roy Morgan.
According to the 2020 Risk Report, the utilities sector ranked below political parties, gambling outlets, real estate agents and banks regarding trust amongst Australian consumers.
The only industries which recorded lower trust scores than that of the utilities sector were telecommunications companies, the media industry and the mining and petroleum industries.
Overall, there were more people who distrusted utilities companies than trusted them, with only a handful of the 44 companies monitored by Roy Morgan recording a net positive trust score.
Red Energy (owned by Snowy Hydro), Aurora (Tasmania government) and Simply Energy (French energy giant Engie) were the only companies with an overall positive trust rating amongst consumers, but rest of the sector, including some of Australia’s largest energy companies, were overall distrusted.
The “Big 3″ electricity retailers, being AGL Energy, Origin Energy and EnergyAustralia, control around 75 per cent of the retail electricity market, and have faced growing complaints over confusing tariff structures, unclear discounting offers and the difficulty in shopping around for other offers.
Roy Morgan noted that the issues that drive consumers to trust or to distrust a brand operate quite differently, with distrust primarily being driven by perceptions of dishonest business practises.
“Distrust has a very real, measurable effect on a company’s bottom-line. It directly triggers customer churn, a higher cost of doing business, and a falling share price,” Roy Morgan CEO Michele Levine said.
“It’s clear from our research that consumer trust and distrust have quite different drivers. In the case of utilities brands, the single biggest element in trust is good personal experience, including being able to speak to someone who can quickly resolve any problems that arise.”
“But the biggest drivers of distrust are perceived dishonest or unethical business practices. That’s why building on existing trust does nothing to address the corrosive effects of distrust.”
The trust report stressed that growing distrust amongst customers represented a significant business risk, and also an opportunity for new competitors to use better customer experience as a way to poach customers.
“It is named the Risk Monitor because this isn’t ‘just a marketing or comms issue’,” Levine added. “It goes to the heart of corporate governance. Distrust should be on the Risk register of every publicly listed company in Australia. Monitoring it should be a priority.”
Roy Morgan added that consumers were more conscious of how their utilities providers were responding to the Covid-19 crisis, which was putting pressure on household and business finances.
This provides an opportunity for electricity and gas companies to respond proactively to customer needs and to regain the trust of their customers.
“Consumers are very watchful of how companies, including Utilities, are reacting during this crisis. What they experience and observe feeds directly into their feelings of trust and distrust,” Levine added.
“By closely monitoring these scores, brands can see the effects of their actions and messaging Brands with high distrust scores have a real opportunity to address that distrust risk by ensuring their consumers are cared for.”
The Australian Energy Regulator wrote to energy companies in March, outlining its expectations that customer support would be prioritised during a period of disruption caused by Covid-19.
The energy regulator told energy companies that it expected companies to ramp up their hardship arrangements for customers experiencing financial challenges, as well as deferring both disconnections and debt collections for customers unable to pay their bills.
“People enter into a contract when they sign up with an energy retailer. But businesses also have a deal, a social contract, with the community in which they operate. At a time like this, it is vital they remember their broader social obligations,” chair of the Australian Energy Regulator Clare Savage said.
“When people have lost their jobs or business through no fault of their own, it is only fair to expect that they be given any and all help possible, and that includes from their energy providers.”
The Roy Morgan assessment found coal mining company Adani recorded one of the worst trust scores of all brands active in Australia.
Retail businesses generally recorded the highest level of trust amongst Australians, with Bunnings, ALDI and Woolworths ranking as Australia’s most trusted brands.
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