Consumers Rate Energy Company Web Sites Below Average, According to Platts Study.

Business Editors

BOULDER, Colo.--(BUSINESS WIRE)--Aug. 29, 2002

Online consumers rate the best site they have encountered on the Web an 8.75 overall on a 10-point scale, while electricity and natural gas companies averaged 6.4 and 6.3, respectively, according to a study conducted by Platts Research & Consulting.

Platts is the energy information, consulting, research and marketing services unit of The McGraw-Hill Companies (NYSE: MHP).

Even Web sites of other suppliers of day-to-day products, such as cable or long-distance telephone service, were rated higher than energy company sites, with banks receiving the highest score--an average of 8.14.

"As the number of consumers conducting transactions online increases, so does the importance of understanding the expectations they have for a Web site," said Tia Hensler, director of market research at Platts.

Conducted in summer 2002, this market research study polled more than 1,000 residential consumers in the United States and Canada. It found that residential consumers who actively search the Web and conduct online transactions rate energy Web sites below average, suggesting that energy companies are not yet meeting customers' expectations in regard to online offerings.

When asked about specific functions of their energy company's Web site, survey respondents rated response time and customer service and support the lowest. When they submit an inquiry online to customer service, they want to receive an e-mail confirmation that their request was received as well as notification when the issue has been resolved or the specific action has been completed.

In addition, electric and gas company Web sites have the lowest visitation rates compared with the sites of other day-to-day product and service providers tested. "Non-visiting" consumers most frequently reported not visiting the energy company site because they either "have not had a reason to" (75%) or "did not know it existed" (28%). Consumers who have accessed their energy company's Web site did so most often to review their account balance or get answers to general questions.

"Energy service providers need to give their customers a tangible reason for searching out and visiting their Web site. The goal of increasing online customer self-service and bill payment will only be realized if customers perceive a personal added benefit for conducting transactions online," Hensler said.

Over one-third of respondents did, however, indicate that they plan on increasing the number of bills they pay online during the next six months. For specific types of bills, such as "local phone" and "primary credit card," online bill-paying trails only the mail as the most popular method of payment.

More than one-third (35%) of users who accessed their energy company's Web site said they "would consider" setting up a one-time payment arrangement at the site. Close to 32% said they "would consider" paying their monthly bill online, suggesting that they would at least be willing to think about returning to the site on a monthly basis.

"There is some good news for electric and gas companies," said Andrew Heath, director of the E-Business Service for Platts Research & Consulting. "So far, adoption rates have been very low, but more customers are becoming experienced users of Internet services. It now appears that reaching the participation levels many companies originally hoped for may be a realistic goal."

Of the various types of promotions tested in this study, cash discounts or cash payments of some type proved to be the incentives that most customers are looking for. They responded more favorably to simple cash transfers than to frequent flier miles or energy information programs.

The study data were collected between June 6 and June 25, 2002. A total of 1,026 completed questionnaires were received from respondents who had at least some responsibility for the monthly bill-paying process in the household. The results were weighted for gender and region of the country according to 2000 census data.

Platts is the world's largest and most authoritative provider of energy information and marketing services, with 14 offices worldwide. Products range from real-time and Internet-based news and price assessment services to newsletters, market reports, databases, geospatial tools, magazines, conferences, research and consulting services and energy financial services. Platts offerings cover the oil, natural gas, electricity, nuclear power, coal, petrochemical and metals markets. Every day, more than $10 billion in trading activity and term contract sales are based on Platts price assessments. Additional information is available at www.platts.com.

Founded in 1888, The McGraw-Hill Companies is a global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, BusinessWeek and McGraw-Hill Education. The corporation has more than 350 offices in 33 countries. Sales in 2001 were $4.6 billion. Additional information is available at www.mcgraw-hill.com.

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    KEYWORD: COLORADO
    INDUSTRY KEYWORD: E-COMMERCE ENERGY INTERNET OIL/GAS UTILITIES
    SOURCE: Platts