Not surprisingly, customers will switch their retail electric company if they feel they are being taken advantage of, or if brand trust erodes. Because the Texas electricity market is mostly deregulated, there are plenty of options in the area. And as Business Wire has recently showcased through a 2019 survey by Cogent Syndicated, there are a lot of customers regularly switching their providers these days.
The data shows that 16 REPs in deregulated parts of Texas have shown an increase in brand trust, while 13 have shown a dip in brand trust. This would certainly mean a lot of switches for the 13 who were dissatisfied. Cogent puts it at about 25%.
The study by Cogent shows the strong correlation between trust and longevity of customer base. Transparency is obviously important. And with such a high percentage of people preferring Retail Electric Providers (the competitive providers in deregulated Texas), brand trust is as important as ever.
The numbers from the study say that “ after 17 years of deregulation, 38% of Texans prefer to purchase their electricity from a REP, while 28% would like to use their incumbent utility.” A lot of people choose to go through the incumbent utility because they may not understand the ease of switching, or because they aren’t aware they could be saving more money. Electricity rates in Texas can vary substantially from one electric company to the next.
As the Houston Chronicle states, historically, many haven’t switched despite the amount of money they could save if they did switch. That looks to be changing. Because some companies hike up rates after initial promotional offers, there is a lot of erosion of trust. And clearly, as Cogent has pointed out, many are actually switching because they customers are realizing that prices are dropping, so they should be paying less and with a provider that looks out for customer savings over profitability.