Emerging Market: U.S. Businesses Willing to Invest More in Energy-Related Products & Services, According to New National Study

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Emerging Market: U.S. Businesses Willing to Invest More in Energy-Related Products & Services, According to New

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Emerging Market: U.S. Businesses Willing to Invest More in Energy-Related Products & Services, According to New

Findings Reflect Increased Interest in Power Reliability & Quality; Local

Utilities Enjoy Preferred Provider Status -- But Competition Looms

NEW YORK, NORTH SALEM, Jun. 5 -/E-Wire/Business Wire/-- U.S. businesses, increasingly dependent on sensitive electronic equipment and processes, are willing to invest more in power-saving products and services and energy self- sufficiency, according to a new national survey. But the same study shows that the present local utility is not assured of winning this business. The study establishes a direct link between business customer satisfaction with the local electricity supplier and these additional revenue opportunities.

New products and services, ranging from clean and spike-free "premium" power to on-line energy audits and business interruption warranties, are growing in appeal among businesses of all sizes, according to the survey. And these businesses are inclined to turn first to their local utility for new and expanded products and services, the survey reports.

However, the same survey shows that this initial preference is fragile and does not translate into a ready market for sales. The local utility must still offer quality products and services at competitive prices to win the support of major business customers.

Moreover, business customers who are less satisfied with their present provider prefer a competing electricity provider or an electrical contractor over the incumbent supplier for a number of the proposed product and service offerings, according to the survey. Conversely, high levels of customer satisfaction with the local electric provider translate into greater revenue opportunities.

While commercial enterprises remain price-conscious, the survey finds warranties, service levels, and the image of the current energy provider can make the difference when prices are competitive. Indeed, a local supplier that enjoys a positive reputation among business customers has an advantage with any new service offering, the survey points out.

Although the largest business customers focus primarily on costs in making their energy decisions, the survey also confirms that smaller enterprises are influenced most by their local energy providers. Regardless of size, businesses that have incurred damage and losses from power outages show increased interest in new products and services.

These results are part of the national business customer product and service study conducted by RKS Research & Consulting, a nationwide market research and public opinion polling firm based in North Salem, NY. RKS asked 400 enterprises -- 200 medium-to-large commercial operations, plus 200 small businesses -- to rate and rank a number of product and provider attributes. RKS performed the analysis and reported the findings to project sponsors during the month of May.

The RKS study confirms the importance of uninterruptible and high quality power to the business community. For example, businesses that estimate losses from power outages at $1,000 or more per hour express interest in "premium power" products as well as online energy information management systems and outdoor lighting maintenance programs. In each case, however, the local energy supplier is the preferred provider by only a narrow margin; competing utilities and electrical contractors rank close behind.

"These findings confirm that continuous reliability and high power quality have moved up in importance for major businesses customers," said David J. Reichman, RKS president. "This heightened concern can translate into increased sales and revenues for energy suppliers -- provided they keep taking steps to invest in their business customer relationships and corporate reputations."

RKS tested five product and service offerings with business customers -- "premium power," outdoor lighting maintenance, on-site power generation, energy information management systems, and business protection warranty plans. The study probes price points, incentives, features, and key purchase criteria and explores different combinations of attributes that influence purchasing interest.

While small businesses find the interruption protection plans most intriguing, larger commercial customers register high interest in the lighting and energy management offerings. The on-site generation and premium power offerings attract the strongest interest from the largest and most demanding power quality customers.

But small business customers also show the greatest inclination to turn to an electrical contractor for their warranty and service needs, according to the survey. Likewise, medium-to-larger businesses lean toward purchasing premium power products and energy management systems and services from a competing utility or new energy provider.

"These responses underscore the importance of a strong utility brand," said Reichman. "Satisfied business customers who hold a positive image of the local provider are clearly predisposed to purchase more products and services from this trusted local source."

Now in its 28th year, RKS Research & Consulting designs and conducts both syndicated and customized marketing research and public opinion polling services for energy and natural resource clients and their major associations. RKS operates from headquarters in North Salem, NY, plus field offices in New Jersey, Florida, Ohio and California.

More information is available on its website, www.rksresearch.com.

NOTE TO EDITORS: Ordering information on the RKS Energy National Business Customer Product and Service Conjoint Study is available from Joan Eckels, RKS at (914) 277-6900, ext. 102, or fax: (914) 277-6988.

RKS Research & Consulting

RKS Research & Consulting, Richard Claeys, 408/248-1090

http://www.rksresearch.com

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