E-Mail
BLOOMINGTON, Ind. - In Lily Tomlin's classic SNL comedy sketch, her telephone operator "Ernestine" famously delivers the punchline, "We don't care. We don't have to. We're the Phone Company." But new research finds that satisfied customers mean increased profits even for public utilities that don't face competition.
Little is known about effect of customer satisfaction at utilities. As a result, utility managers are often unsure how much to invest in customer service - if anything at all. The issue also is of interest to regulators responsible for protecting consumers.
The study, in the
Journal of Marketing Research, has important implications for both managers and regulators. Customer satisfaction predicts profits at utilities -- in spite of the fact that customers don't have an option to switch if they are unhappy. It shows how keeping customers happy lowers operating costs and ultimately saves utilities money.