Consumer Service Finrep En

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CONSUMER SATISFACTION SURVEY

FINAL REPORT

May 2007

BY

IPSOS INRA

for

THE EUROPEAN COMMISSIONHealth & Consumer Protection

Directorate - General


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|FINAL REPORT CONSUMER SATISFACTION DG SANCO2

Table of Contents

Executive Summary ............................................................................. 8A. GENERAL INTRODUCTION ...............................................................191. Context and objectives of the consumer satisfaction survey.....................192. Methodology ..............................................................................213. Satisfaction indicators ..................................................................23

3.1. Defining Consumer Satisfaction Indicators ....................................233.2. Structure of the final report.....................................................29

B. DESCRIPTIVE ANALYSIS OF THE SURVEY RESULTS...................................301. Electricity supply ........................................................................30

1.1. Overall results .....................................................................301.2. Differences between EU Member States.......................................311.3. Differences by socio-economic group ..........................................331.4. Other key observations arising from the survey..............................341.5. Advanced analyses ................................................................35

2. Gas supply.................................................................................402.1. Overall results .....................................................................402.2. Differences between EU Member States.......................................412.3. Differences by socio-economic group ..........................................432.4. Other key observations arising directly from the survey ...................442.5. Advanced analyses ................................................................45

3. Water distribution .......................................................................503.1. Overall results .....................................................................503.2.

Differences between EU Member States.......................................51

3.3. Differences by socio-economic group ..........................................533.4. Other key observations resulting directly from the survey.................543.5. Advanced analyses ................................................................55

4. Fixed telephone service ................................................................594.1. Overall results .....................................................................594.2. Differences between EU Member States.......................................604.3. Differences by socio-economic group ..........................................624.4. Other key observations arising directly from the survey ...................634.5. Advanced analyses ................................................................64


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FINAL REPORT CONSUMER SATISFACTION DG SANCO| 3

5. Mobile phone service....................................................................68

5.1. Overall results .....................................................................685.2. Differences between EU Member States.......................................695.3. Differences by socio-economic group ..........................................705.4. Other key observations arising directly from the survey ...................715.5. Advanced analyses ................................................................73

6. Urban transport ..........................................................................776.1 Overall results .....................................................................776.2. Differences between EU Member States.......................................786.3. Differences by socio-economic group ..........................................806.4. Other key observations arising directly from the survey ...................816.5. Advanced analyses ................................................................82

7. Extra-urban transport ...................................................................877.1. Overall results .....................................................................877.2. Differences between EU Member States.......................................887.3. Differences by socio-economic group ..........................................907.4. Other key observations arising directly from the survey ...................917.5.

Advanced analyses ................................................................93

8. Air transport ..............................................................................978.1. Overall results .....................................................................978.2. Differences between EU Member States.......................................988.3. Differences by socio-economic characteristics............................. 1008.4. Other key observations arising directly from the survey ................. 1018.5. Advanced analyses .............................................................. 102

9. Postal services.......................................................................... 1069.1. Overall results ................................................................... 1069.2. Differences between EU Member States..................................... 1079.3. Differences by socio-economic characteristics............................. 1089.4. Other key observations arising directly from the survey ................. 1099.5. Advanced analyses .............................................................. 110

10. Retail banking .......................................................................... 11410.1. Overall results.................................................................. 11410.2. Differences between EU Member States ................................... 11510.3. Differences by socio-economic characteristics ........................... 11610.4. Other key observations arising directly from the survey................ 11710.5. Advanced analyses............................................................. 118


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11. Insurance services ..................................................................... 12211.1. Overall results.................................................................. 12211.2. Differences between EU Member States ................................... 12311.3. Differences by socio-economic characteristics ........................... 12511.4. Other key observations resulting directly from the survey ............. 12611.5. Advanced analyses............................................................. 127

C. DESCRIPTIVE ANALYSIS OF THE SURVEY RESULTS BY COUNTRY ................ 1311. EU25 ..................................................................................... 1322. Austria ................................................................................... 1333. Belgium.................................................................................. 1344. Cyprus ................................................................................... 1355. Czech Republic ......................................................................... 1366. Denmark.................................................................................1377. Estonia................................................................................... 1388. Germany................................................................................. 1399. Greece................................................................................... 14010. Finland................................................................................... 14111. France ................................................................................... 14212. Hungary.................................................................................. 14313. Ireland...................................................................................14414.

Italy ...................................................................................... 145

15. Latvia .................................................................................... 14616. Lithuania ................................................................................ 14717. Luxembourg............................................................................. 14818. Malta..................................................................................... 14919. Netherlands............................................................................. 15020. Poland ................................................................................... 15121. Portugal ................................................................................. 15222. Slovakia.................................................................................. 15323. Slovenia ................................................................................. 15424. Spain ..................................................................................... 15525. Sweden .................................................................................. 15626. United Kingdom ........................................................................ 157


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D. OVERALL FINDINGS AND RECOMMENDATIONS...................................... 1581. Consumers overall satisfaction .....................................................1581.1. Average score ....................................................................158

1.2. Percentages of satisfied and dissatisfied consumers ...................... 1592. Criteria that contribute to consumers overall satisfaction .................... 161

2.1. Consumers satisfaction with quality, pricing and image................. 1612.2. The relative importance of Quality, Pricing and Image in consumers

overall satisfaction with SGIs.................................................. 1613. Differences between EU Member States ........................................... 163

3.1. Differences between EU15 and NMS10 countries........................... 1633.2. Differences between individual Member States ............................ 164

4. Other key findings ..................................................................... 1684.1. The socio-economic characteristics of consumers ......................... 1684.2. Market issues..................................................................... 1694.3. Opportunities for priority actions ............................................ 170

5. Recommendations ..................................................................... 1725.1. Questionnaire and survey design ............................................. 1725.2. Areas for further research .....................................................173


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Table of graphs

EL. 1 Electricity supply: proportion of satisfied vs. dissatisfied consumers - percentages (2006) ........ 30EL. 2 Electricity supply: proportion of satisfied vs. dissatisfied consumers by country -

percentages (2006) ................................................................................................. 31EL. 3 Electricity supply: proportion of satisfied vs. dissatisfied consumers by socio-economic category

percentage (2006) .................................................................................................. 33EL. 4 Two-dimensional analysis - Electricity.......................................................................... 37

GAS. 1 Gas supply: proportion of satisfied vs. dissatisfied consumers - percentages (2006)................. 40GAS. 2 Gas supply: proportion of satisfied vs. dissatisfied consumers by country - percentages (2006) .. 41GAS. 3 Gas supply: proportion of satisfied vs. dissatisfied consumers by socio-economic category

percentages (2006) ................................................................................................. 43GAS. 4 Two-dimensional analysis - Gas .................................................................................. 47

WAT. 1 Water distribution: percentages of satisfied vs. dissatisfied consumers - percentages (2006) ..... 50WAT. 2 Water distribution: percentage of satisfied vs. dissatisfied consumers by country -

percentages (2006) ................................................................................................. 51WAT. 3 Water supply: percentages of satisfied vs. dissatisfied consumers by socio-economic category -

percentages (2006) ................................................................................................. 53WAT. 4 Two-dimensional analysis Water ............................................................................... 56

FT. 1 Fixed telephony: percentage of satisfied vs. dissatisfied consumers - percentages (2006)......... 59FT. 2 Fixed telephone: percentage of satisfied vs. dissatisfied consumers by country -

percentages (2006) ................................................................................................. 60FT. 3 Fixed telephony: percentage of satisfied vs. dissatisfied consumers by socio-economic

category - percentages (2006).................................................................................... 62FT. 4 Two-Dimensional analysis Fixed telephone.................................................................. 65

MP. 1 Mobile phone: percentage of satisfied vs. dissatisfied consumers - percentages (2006)............. 68MP. 2 Mobile phone: percentages of satisfied vs. dissatisfied consumers by country -

percentages (2006) ................................................................................................. 69MP. 3 Mobile phone: percentages of satisfied vs. dissatisfied consumers by socio-economic

category - percentages (2006)................................................................................... 70MP. 4 Two-dimensional analysis Mobile phone...................................................................... 74

UT. 1 Urban transport: percentage of satisfied vs. dissatisfied consumers - percentages (2006) ......... 77UT. 2 Urban transport: percentages of satisfied vs. dissatisfied consumers by country -

percentages (2006) ................................................................................................. 78UT. 3 Urban transport: percentages of satisfied vs. dissatisfied consumers by socioeconomic

category - percentages (2006).................................................................................... 80UT. 4 Two-dimensional analysis Urban transport................................................................... 84

EUT. 1 Extra-urban transport: percentages of satisfied vs. dissatisfied consumers - percentages (2006). 87EUT. 2 Extra-urban transport: percentages of satisfied vs. dissatisfied consumers by country -

percentages (2006) ................................................................................................. 88EUT. 3 Extra-urban transport: percentages of satisfied vs. dissatisfied consumers by socioeconomic

category - percentages (2006).................................................................................... 90EUT. 4 Two-dimensional analysis Extra-urban transport ........................................................... 94

AT. 1 Air transport: percentages of satisfied vs. dissatisfied consumers - percentages (2006) ............ 97AT. 2 Air transport: percentages of satisfied vs. dissatisfied consumers by country -

percentages (2006) ................................................................................................. 98AT. 3 Air transport: percentages of satisfied vs. dissatisfied consumers by socio-economic category -

percentages (2006) ................................................................................................100AT. 4 Two-dimensional analysis Air transport......................................................................103


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PS. 1 Postal services: percentages of satisfied vs. dissatisfied consumers - percentages (2006).........106

PS. 2 Postal services: percentages of satisfied vs. dissatisfied consumers by country - percentages(2006).................................................................................................................107 PS. 3 Postal services: percentages of satisfied vs. dissatisfied consumers by socio-economic

category - percentages (2006)...................................................................................108PS. 4 Two-dimensional analysis Postal services ...................................................................111

RB. 1 Retail banking: percentages of satisfied vs. dissatisfied consumers - percentages (2006) .........114RB. 2 Retail banking: percentages of satisfied vs. dissatisfied consumers by country -

percentages (2006) ................................................................................................115RB. 3 Retail banking: percentages of satisfied vs. dissatisfied consumers by socio-economic category -

percentages (2006) ................................................................................................116RB. 4 Two-dimensional analysis Retail banking....................................................................119

INS. 1 Insurance: percentages of satisfied vs. dissatisfied consumers - percentages (2006) ...............122

INS. 2 Insurance: percentages of satisfied vs. dissatisfied consumers by country - percentages (2006). 123INS. 3 Insurance: percentages of satisfied vs. dissatisfied consumers by socio-economic category -

percentages (2006) ................................................................................................125INS. 4 Two-dimensional analysis - Insurance..........................................................................128


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Executive Summary

1. CONTEXT

In 2003 and 2004 a pilot study on consumer satisfaction was carried out by INRA andDeloitte for the Health and Consumer Protection Directorate-General of the EuropeanCommission. This aim of the study was to develop a methodology for producing consumersatisfaction indicators in the European Union and to carry out a pilot survey. In 2005, theEuropean Commissions Health and Consumer Protection Directorate-General launched acall for tender to prepare, implement and analyse an EU-wide consumer satisfaction surveyusing the methodology developed during the pilot study. INRA, which has become part ofthe Ipsos Group, was given this assignment together with Deloitte and some independentexperts.

The consumer satisfaction survey was held in all of the 25 countries that were members ofthe European Union at that time and covered 11 services of general interest:

- Electricity Supply- Gas Supply- Water Distribution- Fixed Telephony- Mobile Telephony- Urban Transport- Extra-Urban Transport- Air Transport

- Postal Services- Retail Banking- Insurance Services.

2. A ROBUST METHODOLOGY

The questionnaire used for the pilot survey was slightly changed in line with therecommendations of the pilot study itself and the Commissions requirement for the surveyto be based on face-to-face rather than telephone interviews. With the assistance of aScientific Committee, the survey was designed so that it would guarantee a sufficiently

large sample size per service to run the satisfaction model whilst at the same time stayingwithin the agreed budget.

For the purposes of the survey, consumers were defined as people (18+) having used theservice in the past 12 months. Satisfaction was defined as the consumers assessmentof a product or service in terms of the extent to which that product or service has methis/her needs or expectations. Consumer satisfaction was measured both directly(observed satisfaction) and after the responses to specific questions were statisticallyprocessed (calculated satisfaction). The model developed during the pilot study allowedus to gain an understanding of the factors that contributed most to consumer(dis)satisfaction for each of the services.

A robust and homogeneous methodology was used across countries and services, includingover 29,000 interviews in the 25 EU member states. There were on average 500 interviewsper service and country. The interviews were face-to-face, took place at the respondentshomes, lasted 45 to 60 minutes each and covered 4 to 5 different services per respondent.


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3. EUROPEAN CONSUMERS ARE FAIRLY SATISFIED WITHSERVICES OF GENERAL INTEREST

Overall, European consumers appear to be fairly satisfied with services of general interest.For each service surveyed they gave an average score (on a scale from 1 to 10) rangingfrom 7.04 for Urban Transport to 7.96 for Air Transport, as can be seen in the table below:

Average score

Air Transport 7.96

Mobile Telephony 7.91

Insurance services 7.92

Retail Banking 7.82

Water Distribution 7.73

Gas supply 7.64

Electricity supply 7.61

Postal Services 7.42

Fixed Telephony 7.30

Extra Urban Transport 7.05

Urban Transport 7.04

If consumers give a service a score of 8, it usually means that they are very satisfied withit. Therefore, looking at the average scores obtained for each service, it is fair to say that:

- European consumers are particularly satisfied with air transport, mobile telephony,insurance services and retail banking

- European consumers are less satisfied (or are more neutral in their opinion) withutility services (gas, electricity, water)

- They are least satisfied with extra-urban and urban transport.


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4. CONSUMERS IN THE EU25 ARE LEAST SATISFIED WITHURBAN AND EXTRA-URBAN TRANSPORT

Another way of looking at overall satisfaction is to calculate the proportions of satisfiedconsumers and dissatisfied consumers. Satisfied consumers are people who gave theservice a rating of 8, 9 or 10 while dissatisfied consumers are people who gave theservice a rating of 4 or less.

The proportions of satisfied consumers are displayed in the following graph:

66.1 65.964.4

63.160.2

57.9 57.6

52.9 52

45.644.5

Air t ransport Mobile

phone

Insurances Banking

retail

Water Gas Electricity Postal

services

Fixed phone Extra-urban

transport

Urban

transport

Overall, to what extent are you satisfied with your supplier?% satisfied customers - EU25

The majority of EU consumers said they were satisfied with most of the services surveyed,especially with air transport, mobile telephony, insurance services and retail banking. Theonly exceptions are urban and extra-urban transport: less than 5 consumers out of 10 saidthat they were satisfied with them.


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A third way of looking at overall satisfaction is displaying the proportion of dissatisfiedconsumers:

10.3

9.4

8.4

6.9

5.4 5.3

4.64.4

4.1

3.5

3

Extra-urban

transport

Urban

transport

F ixed phone Postal

services

W ater Electricity Banking

retail

Gas Mobile

phone

Air transport Insurances

Overall, to what extent are you satisfied with your supplier?% dissatisfied customers - EU25

While EU consumers are least satisfied with urban and extra-urban transport, only 10% ofthem said that they were dissatisfied with both services.


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5. PRICE IS VERY IMPORTANT FOR EU CONSUMERS

EU consumers were asked to evaluate each service according to three criteria: Quality,Image and Pricing. For each of these three criteria, they were asked to say whether theyagreed or not (by giving a score from 1 to 10) with a list of statements.

The following table shows the average satisfaction scores for each criterion and eachservice.

Service Quality Pricing Image

Mobile Telephony 8.1 7.5 8.0

Retail Banking 8.0 7.3 7.8

Air Transport 8.0 7.6 7.9

Insurance 8.0 7.4 7.8

Gas Supply 7.8 6.4 7.3

Postal Services 7.3 6.8 7.2

Water Distribution 7.6 6.8 7.4

Fixed Telephony 7.5 6.7 7.2

Electricity Supply 7.7 6.6 7.4

Extra Urban Transport 7.0 6.5 6.8

Urban Transport 7.0 6.6 6.9

Overall, EU consumers tend to be more satisfied with the quality of service offered thanthe image of the service provider and the prices offered by their provider.

However, advanced statistical analyses show that pricing tends to be the main elementthat determines the extent to which consumers are satisfied with a service. This is thecase in 6 out of 11 services surveyed i.e. insurance, electricity supply, retail banking, fixedtelephony, mobile telephony and water distribution. In other words, for these services,reducing prices would have the greatest impact on overall consumer satisfaction. Trying toimprove consumer satisfaction with a better quality service would have less of an impact

on overall satisfaction.

On the other hand, image is the key factor that determines consumer satisfaction forservice providers for postal services, urban transport and extra-urban transport. In otherwords, consumers who believe their supplier has a negative image will tend to be lesssatisfied than those who believe their supplier has a positive image.


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6. COMPARISON OF COUNTRY RESULTS

A majority of EU25 consumers (more than 50%) are satisfied with 9 out of the 11 SGIsevaluated, especially air transport, mobile phone, insurance, retail banking and waterdistribution services. Consumers are least satisfied with extra-urban (45.6%) and urbantransport (44.5%) services.

Results diverging from the EU average are found below:

Austria

Austrians tend to be more satisfied than the EU average with all 11 services evaluated.They tend also to be less dissatisfied than the EU average with all these services.

Belgium

Consumers tend to be more satisfied than the EU average with retail banking, mobilephone, insurance, electricity, gas, water, fixed phone and urban and extra-urban transportand less satisfied with air transport and postal services. They tend to be less dissatisfiedthan the EU average with all the 11 services.

Cyprus

Consumers tend to be more satisfied than the EU average with all the services, except

urban transport (23% of satisfied against 44.5% at the EU level). They tend to be moredissatisfied than the EU average with urban transport (53.8% of dissatisfied against 9.4% atthe EU level).

Czech Republic

Consumers tend to be more satisfied than the EU average with air transport, mobile phone,retail banking and gas distribution and less satisfied with fixed phone. They tend to bemore dissatisfied than the EU average with all the services except mobile phone.

Denmark

Danes tend to be more satisfied than the EU average with the three utilities (water,electricity and gas), insurance, retail banking, mobile phone and fixed phone and lesssatisfied with extra-urban services. They tend to be more dissatisfied than the EU averagewith postal services, urban and extra-urban transport.

Estonia

Consumers in Estonia tend to be more satisfied than the EU average with retail banking,mobile phone, electricity, postal services, fixed phone, insurance, gas distribution, urbanand extra-urban transport and less satisfied with water distribution. They tend to be moredissatisfied than the EU average with water distribution and less dissatisfied with extra-

urban transport.


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Germany

German consumers are most satisfied than the EU average with all the services exceptextra-urban transport. They tend to be more dissatisfied than the EU average extra-urbantransport and less dissatisfied with fixed phone.

Greece

In Greece, consumers tend to be more satisfied than the EU average with gas distribution,air transport, mobile phone, postal services, insurance and extra-urban transport and lesssatisfied with electricity and fixed phone. They tend to be more dissatisfied than the EUaverage with water and electricity distribution and less dissatisfied with postal servicesand extra-urban transport.

Finland

Finns tend to be more satisfied than the EU average with all SGIs. In addition, they tend tobe less dissatisfied than the EU average with urban and extra-urban transport and fixedphone.

France

French consumers tend to be more satisfied than the EU average with extra-urbantransport and less satisfied air transport, retail banking, mobile phone, water distributionand postal services. They tend to be less dissatisfied than the EU average with extra-urbantransport.

Hungary

Hungarians tend to be more satisfied than the EU25 average with almost all SGIs exceptwith urban transport (37.7% against a EU25 average of 44.5%). However, they tend to bemore dissatisfied than the EU average with electricity, insurance, gas, urban and extra-urban transport.

Ireland

Consumers are more satisfied than the EU average with all the SGIs surveyed, except withAir transport (where the proportion of satisfied is equal to the EU average). They tend tobe less dissatisfied than the EU average with postal services, fixed phone, urban and extra-urban transport.


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Italy

Italians tend to be less satisfied than the EU average with all the SGIs. They tend to bemore dissatisfied than the EU average with urban and extra-urban transport, postalservices and fixed phone.

Latvia

Latvians tend to be more satisfied than the EU average with all the SGIs, except withwater distribution (50.5% are satisfied against 60.2% at the EU level). They tend to be moredissatisfied than the EU average with water distribution and less dissatisfied with urbanand extra-urban transport and fixed phone.

Lithuania

Lithuanians are more satisfied than the EU average with all the SGIs surveyed, except withwater distribution (where the proportion of satisfied is equal to the EU average). Theytend to be less dissatisfied than the EU average with gas and electricity distribution, retailbanking, postal services, air transport, insurance, fixed phone and extra-urban transportbut are more dissatisfied with water distribution.

Luxembourg

Consumers are more satisfied than the EU average with all the SGIs surveyed, except withmobile phone and air transport (where the proportions of satisfied are in line with the EUaverage). They tend to be less dissatisfied than the EU average with water, electricity andgas distribution, fixed phone, postal services and extra-urban transport.

Malta

Consumers in Malta tend to be more satisfied than the EU average with mobile phone,retail banking, fixed phone, insurance and postal services and tend to be less satisfied withwater and electricity distribution and urban transport. They tend to be less dissatisfiedthan the EU average with fixed phone and more dissatisfied with insurance, water andelectricity distribution and urban transport.

Netherlands

Just as with Italy, Dutch consumers tend to be less satisfied than the EU average with allthe SGIs. However, they also tend to be less dissatisfied than the EU average with waterdistribution, air transport, postal services, insurance, fixed phone, urban and extra-urbantransport.

Poland

In Poland, consumers tend to be more satisfied than the EU average with postal servicesand insurance and tend to be less satisfied with fixed phone and urban transport. Theytend to be less dissatisfied than the EU average with air transport and tend to be moredissatisfied with fixed phone.


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Portugal

Portuguese consumers tend to be more satisfied than the EU average with postal servicesand extra-urban transport and tend to be less satisfied with water, gas and electricitydistribution, insurance and fixed phone. They tend to be less dissatisfied than the EUaverage with postal services, retail banking, air transport and urban/extra-urban transportand they tend to be more dissatisfied with water and electricity distribution and fixedphone.

Slovakia

Slovaks tend to be more satisfied than the EU average with mobile phone and postalservices and tend to be less satisfied with insurance, water, electricity and gasdistribution, urban and extra-urban transport. In addition, they tend to be more

dissatisfied than the EU average with air transport, insurance, water, electricity and gasdistribution and urban and extra-urban transport.

Slovenia

Consumers are more satisfied than the EU average with all the SGIs surveyed, except withurban transport (where the proportion of satisfied is in line with the EU average). Inaddition, they tend to be less dissatisfied than the EU average with electricity and gasdistribution and postal services.

Spain

Spaniards tend to be less satisfied than the EU average with insurance, retail banking,postal, gas, water and electricity distribution, air transport, mobile phone, fixed phoneand urban transport. In addition, they tend to be less dissatisfied than the EU average withpostal services and extra-urban transport but tend to be more dissatisfied with airtransport and mobile phone.

Sweden

Consumers are more satisfied than the EU average with water distribution, retail banking,gas, mobile phone, fixed phone and extra-urban transport and tend to be less satisfiedwith air transport and postal services. They also tend to be less dissatisfied than the EU

average with water and gas distribution and retail banking but tend to be more dissatisfiedelectricity, postal services and urban transport.

United Kingdom

Consumers in the UK tend to be more satisfied than the EU average with fixed phone,retail banking and extra-urban transport services. In addition, they tend to be lessdissatisfied than the EU average with fixed phone and extra-urban transport.


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7. EU CONSUMERS FACE DIFFICULTIES WHEN IT COMES TOCHANGING SERVICE PROVIDER

Overall, a large proportion of EU consumers (more than 5 out of 6) think that they will staywith their current provider for the next 12 months. This is the case for most of the sectors,except for air transport and fixed telephony, where 3 consumers out of 4 think that theywill stay with their current provider for the next 12 months.

Even in markets where there is more than one provider, changing from one supplier toanother is often difficult. The only exceptions are in fixed telephony, mobile telephony,retail banking, insurance and especially air transport services. In these cases, at least 2 EUconsumers out of 3 who can choose between at least 2 providers state that is easy tochange.

Buying services from another country is only considered possible and even of potentialinterest in the case of air transport (4 consumers out 5), and, to a lesser extent, retailbanking and mobile telephone services (48% and 41% respectively).

A very large majority of users prefer to deal with a national supplier (more than 90% ofconsumers). This is less the case for air transport services (60%).

8. PRIORITY ACTIONS SHOULD FOCUS ON PRICING

Pricing

As mentioned earlier, pricing issues are major factors determining consumer satisfactionfor most of the services surveyed.

Among these components, price levels are identified as the main issue in all the services.Consumers tend to think they pay too much for services of general interest.

In addition, EU25 consumers tend to think that suppliers do not offer enough by way ofspecial tariffs for specific target groups or specific usage.

Actions designed to increase consumer satisfaction should therefore focus on theseprice components for maximum effect.

Image

Consumer satisfaction with urban transport, extra-urban transport and postal services ismostly influenced by the image their supplier has on the market. More specifically, inthese sectors, elements such as the reputation of the supplier, its willingness to put theclient first and its flexibility are of great importance for consumers.


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Quality

Quality of service is the element that has the least influence on overall consumersatisfaction and yet people are most satisfied with this element when evaluating SGIs. Thisstatement tends to prove that consumers take quality of service for granted.Consequently, long-term actions are appropriate in this area. Making the consumersaware of the quality of the services they are using could improve satisfaction with theseservices in the long term.

Urban and extra-urban transport

Urban and extra-urban transport are clearly the services with which consumers are leastsatisfied. Moreover, this observation applies to almost all the countries.

Actions to improve satisfaction could target the maintenance of transport networks andvehicles, reliability of the services (frequency of service, punctuality, etc.) and the waythe problems and questions raised by consumers are handled.

9. RECOMMENDATIONS

Overall, the questionnaire and design of this survey appears to be robust. Thequestionnaire survey and the underlying model and methodology could be used withoutmajor changes for future surveys.

One hypothesis that emerges from the results of this survey is that consumer satisfaction in

certain services e.g. air transport, retail banking - is affected by the extent to whichpeople are familiar with the internet (since those who are may benefit more from certainservices). In order to test this hypothesis, a question on this topic might be included infuture surveys.

With the current survey approach, an analysis of complaints is difficult to carry outbecause of the low number of complaints made by the respondents. Since the option ofmuch larger sample sizes is likely to be rejected due to cost implications, this issue mayhave to be dealt with in another way, e.g. by asking other types of related questions forwhich the response rates are likely to be higher.

Further investigation would need to be done to see whether there is a link between

consumer satisfaction and the extent to which a sector has been liberalised.

An interesting exercise would be to examine whether any form of statistical clustering ofcountries and/or services makes sense. This would allow the Commission to answer thequestion as to where particular consumers have similar attitudes across sectors andcountries. It might even lead to the definition of a typology for EU consumers. This couldhelp in predicting consumer behaviour towards changes in market structures and serviceoffers.

A final thought is that the way the survey and model has been constructed allows for itsextension into other services and also the retailing of consumer goods. If the Commission

were to consider the inclusion of new service categories in the future, a small preliminarystudy and small pilot survey could be undertaken in order to design and test the surveyquestions that should be included in the questionnaire.


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A. GENERAL INTRODUCTION

1. Context and objectives of the consumersatisfaction survey

Services of General Interest (SGIs) are of great importance in achieving the fundamentalobjectives of the European Union. The provision of high quality, accessible and affordableservices of general interest meeting the needs of consumers is essential for the social andeconomic inclusion of all EU citizens and the territorial integrity of the EU. Therefore,

understanding EU citizens perceptions of SGIs and the problems they have experiencedwith SGIs through various studies and opinion surveys is one of the priorities of theCommission and in particular of the Directorate-General Health and Consumer Protection(DG SANCO).

Indeed, DG SANCO has been building up an 'evidence base' regarding services of generalinterest in order to improve policymaking and integrate consumer concerns into other EUpolicies. In addition, data facilitates the monitoring and evaluation of EU and nationalpolicies. For this purpose, DG SANCO has been carrying out regular quantitative surveys(e.g. Eurobarometers) and qualitative studies (e.g. focus groups) to measure consumersatisfaction with services of general interest. Qualitative studies are organised inconnection with issues raised in Eurobarometers in order to have a better understanding of

consumers views and cross-check Eurobarometer results. Data related to services ofgeneral interest are also made available in the publication entitled Consumers in Europe -Facts and Figures. A special edition of Consumers in Europe - Facts and Figures, devotedto Services of General Interest, is to be published in 2007.

In 2003, DG SANCO launched an open call for tender on the Development of consumersatisfaction indicators; pilot survey on consumer satisfaction. Together with Deloitte,INRA won this call. The assignment had three objectives:

o To develop a methodology for the construction of consumer satisfaction indicatorsin the European Union. This methodology had to be practical and have a soundscientific basis, reflecting recent insights into consumer satisfaction and its

measurement;o To develop and carry out a pilot survey based on the proposed methodology. The

purpose of this pilot survey was to test the methodology and its underlyingmodelling and to propose a preliminary set of indicators;

o To analyse the outcomes of the pilot survey in order to indicate possibleadaptations to the methodology developed in the first stage.

INRA and Deloitte developed an appropriate survey framework (e.g. questionnaires,population and sampling, survey methods, etc.) and proposed statistical methods to beused and methods for calculating and presenting the consumer satisfaction indicators.


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Another open call for tender was launched in 2004 to prepare, implement and analyse theconsumer satisfaction survey using the methodology developed during the first assignment.

INRA (now Ipsos Belgium), which had become part of the Ipsos Group, won the contract. Inorder to gather the most effective resources for this contract, Ipsos decided to continue itspartnership with Deloitte, which acted as policy analysts and advisers and selected twoindependent experts to work on the pilot survey: Dominique Vanmarsenille and ProfessorVanhoof (Hasselt University).

The survey outcomes should serve as a tool to support EU consumer policy-making in SGIs.The satisfaction indicators that were developed are sector-based and should enable DGSANCO to:

o understand how consumers perceive certain SGIs, what their main requirements areand how key service areas meet their expectations;

o benchmark performance amongst EU member states within particular SGIs;

o benchmark the performance of SGIs within a specific country or at the EU level;

o identify priorities for improvement - in other words the areas where improvementswill produce the greatest gain in consumer satisfaction;

o set goals for improvement and monitor progress.

The indicators resulting from the survey ought to become a reference tool for EUpolicymakers in SGIs, which would allow them to gauge both overall consumer satisfactionlevels and to measure the specific elements that determine satisfaction levels in individual

areas. The consumer satisfaction indicators proposed should be able to help EUpolicymakers define and review EU policy in these areas. The indicators provide signals ofwhether SGIs are functioning properly and whether corrective regulatory or enforcementmeasures should be considered.

The scope of the project focuses on 11 services of general interest across all 25 EUmembers: gas, water, electricity, postal services, mobile telephone, fixed telephone,urban transport (within towns/cities: tram, bus, underground, rail/RER), extra urbantransport (between towns/cities: rail, bus), air transport, retail banking and insurance.


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2. Methodology

Ipsos INRA applied a robust and homogeneous methodology across all the countries in order

to guarantee a complete benchmark in terms of results:

500 interviews per sector and per country (250 for sectors of low levels of usage);

Face to face data collection, at home, with interviews lasting an average of 55minutes;

Representative random sample of users for each sector in the past 12 months, viasampling procedures based on a stratification of each country according to regionand urbanisation degree, gender, age and occupation.

The questionnaire collects observed dimensions (i.e. easily observable criteria forconsumers) among users and drivers of consumer satisfaction, including common andspecific items adapted for each sector:

Overall satisfaction with the service: overall satisfaction with the service extentto which the requirements of consumers are met;

Price: price level transparency (i.e. tariffs and invoices are clear and easy tounderstand) payment process (i.e. it is easy to pay ones supplier invoices) affordability (i.e. the services cost more than one can afford to pay) accuracy(i.e. the suppliers invoices are correct) commercial offer (i.e. suppliers have

attractive special tariffs for specific target groups) profitability (i.e. the suppliershares their profit with consumers) overall price;

Quality: reliability of the service provided service safety offer relevance (i.e.the service meets consumers needs) information (i.e. suppliers regularly informtheir customers about their services and special tariffs) technical support (i.e. thesupplier offers high quality technical assistance) handling questions and problems(i.e. suppliers react promptly and appropriately) availability of the supplier professional, helpful and friendly staff confidentiality (i.e. the supplier respectscustomers privacy/discretion when dealing with delicate problems) investmentand maintenance of infrastructures points of sales order ease (how easy it is tomake an order or a booking) transport comfort transport network overall

quality;

Image: suppliers reputation relationship between supplier and customers uniqueness of the suppliers image familiarity of customers with their suppliersservices popularity of the supplier flexibility of the supplier suppliers customermindedness (i.e. the supplier puts always customers first) state of the art (i.e.supplier is technologically innovative) environment (i.e. supplier respects theenvironment) overall image;

Market and personal factors: enough competition ability to move (changesupplier) accessibility of the services cross-border purchasing nationalpreference (i.e. a prefer for dealing with a national supplier);


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Commitment to the service (i.e. the consumer will still use his/her servicesupplier/change supplier/stop using the service);

Negative experiences with the services and complaints: number of problemsexperienced with suppliers complaints (i.e. did the consumer communicatehis/her problem) satisfaction with the way the problems were solved.

The individual rating of each consumer satisfaction item is based on a 1 to 10 scale whichallows consumers to carry out a nuanced evaluation.

Regarded by the community of satisfaction research experts as the most academic andcommonly accepted scale, it is also the most consistent scale able to measure satisfactionacross borders, across sectors and over time.


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3. Satisfaction indicators

3.1. DEFINING CONSUMER SATISFACTION INDICATORS

In order to take into consideration the complexity and multifaceted nature of consumersatisfaction, the analysis presented in this report provides the reader with two groups ofindicators measuring consumers satisfaction towards SGI sectors:

A. Primary indicators, reporting direct consumer feedback on their satisfactionlevels in each sector both at overall and component levels (i.e. for price, qualityand image).

B. Added value indicators, calculating a consumer satisfaction level that integrates

consumers expectations for each component (i.e. expectations towards price,quality and image) with their satisfaction, helping to identify and prioritise actionthat needs to be taken (i.e. criteria raising high levels of expectation amongconsumers but showing current low levels of satisfaction).

A) PRIMARY INDICATORS

The first level of analysis aims to describe consumers feelings about services of generalinterest and about elements that constitute suppliers services as well as the problemsencountered when using these services.

This analysis is built in such a way as to allow meaningful comparisons (and aggregations)of how consumers feel: across sectors in one member state; in one sector across memberstates (EU25, EU15, NMS10); and (at a later stage) over time.

For each sector and all elements measured in the questionnaire (see Section 2), wecalculate two basic and complementary indicators that are commonly used in satisfactionresearch area:

o Average levels of satisfaction: for each sector, people were asked to evaluate, ona scale from 1 (not satisfied at all) to 10 (fully satisfied), the extent to which theyare satisfied with their supplier. On the basis of individual scores, average scoresare calculated for each sector.

Example: the average satisfaction score with sector x is 7.8 out of 10

o Levels of satisfaction and dissatisfaction: the research experts community widelyadmits that the average satisfaction score (as described above) is necessary butrequires a complementary approach that helps distinguish between satisfied,neutral and dissatisfied consumers. As stated in most satisfaction surveys in Europe and confirmed in this survey - the average value of satisfaction on a 10 point-scaleis not the arithmetical average of 5 but is closer to 7. There is therefore aninherent bias in the use of 1-10 scales in satisfaction surveys. In order to correctthis standard bias the research community generally uses the Top 3 Bottom 4model that says:

Consumers rating 1, 2, 3 or 4 are considered as dissatisfiedConsumers rating 5, 6 or 7 are considered as neutralConsumers rating 8, 9 or 10 are considered as satisfied


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Based on this grouping rule, we can more easily measure the percentage of satisfied

and dissatisfied consumers for each sector and each criterion.

The graph below shows the two complementary indicators of satisfaction (average /satisfied-dissatisfied) from a typical distribution of individual scores.

Typical distribution of satisfaction scores (1-10 scale)

1 2 3 4 5 6 7 8 9 10

Dissatisfaction

= 9 %

Neutral Satisfaction= 45%

Average Satisfaction

= 7,7

In addition, other key indicators are provided in the analysis:

o Average numbers of consumer complaints. Example: On average, consumers haveexperienced 3 problems with their supplier in the last 12 months.

o Breakdown analysis by consumer demographic profile (age, gender, occupation

level etc.). Example: 60% of men and 40% of women are satisfied with sector x.

B) ADDED VALUE INDICATORS

While the main objective of the first level of analysis was to measure key satisfactionindicators and give an overall picture of a given service sector/country, the second levelintends to make use of more advanced statistical methods in order determine theinteraction of these key indicators so as to explain consumers overall satisfaction.


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The results of this advanced analysis will provide useful information for the Commissionand DG SANCO in particular, which could be used to determine the areas of priority and

the appropriate actions to be taken in order to improve satisfaction in a givensector/country. It will also be a useful tool for monitoring consumer satisfaction bycountry/sector over time and for evaluating the impact of a policy on consumersatisfaction.

In the rest of the section we set out details of the two statistical tools that were used: thesatisfaction model and the two-dimensional analysis.

B1) Satisfaction model

A statisticalmodel has been specifically built for DG SANCO and was previously validatedduring the pilot stage.

This model offers a range of possible added-value analysis and allows especially to explainthe contribution of observed variables to overall satisfaction, allowing us to determine thelevels of consumers expectations.

Contribution of observed variables to overall satisfaction

The satisfaction model uses two types of variables:

Driving factors i.e. variables explaining satisfaction: (perceived) quality (perceived) price image

Performance indicators: variables that are a consequence of satisfaction i.e.commitment complaints

The model helps explain the level of overall satisfaction observed for a given sector withthe help of the above-mentioned variables. In other words, the model indicates the levelof contribution made by each variable to overall satisfaction. This contribution iscalculated through a regression analysis, which determines the weight of each variable.These weightings can take a value ranging from 0 to 1. The more a weighting is close to 1,the more the variable is contributing to overall satisfaction, or, in other words, the higherconsumers expectations are.

For example, if the regression coefficients are the following: 0.4 (price), 0.35 (image) and0.25 (quality). This means that price is the variable that contributes to satisfaction most,i.e. where consumers expectations are the highest.

The model also indicates the variables that are a consequence of satisfaction and thecontribution of overall satisfaction to these variables for a given sector. Here again,weightings are calculated in order to quantify the contribution of the overall satisfactionto the commitment and complaints level.

The relationship between overall satisfaction and the above-mentioned variables providesuseful information for policy-making.


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For example, lets suppose that, for a given sector, the level of satisfaction is low andthat price is the variable that contributes most to this level of satisfaction. In addition,

lets suppose that complaints are the main consequence of this low level of satisfaction.Policy-makers should then focus their attention on price as it contributes todissatisfaction and consequently to complaints.

The model can also be used to set and test further hypotheses and assess the potentialimpact of actions, as in the following hypothetical example:

In the fixed phone sector within the EU25, an increase of 10% in consumer satisfactionregarding prices would improve the overall consumer satisfaction level to 33% Policy-makers efforts could therefore be focused first on price transparency and information.

B2) Two-dimensional analysis

The two-dimensional analysis is one of the most common approaches to be carried out onconsumer satisfaction data and helps in the presentation of the final results. The aim ofthis analysis is to summarise the opportunities for action (i.e. areas where the SGI doesnot perform so well and where actions to change the situation are needed in order toimprove consumer satisfaction) and areas where no action is needed (i.e. areas wherethe SGI performs well and where no action is required), on a simple mapping system thattakes into account:

the score ofeach variable on a 10-point scale (satisfaction); the regression coefficient in other words consumers expectation levels - of the

3 drivers of satisfaction (quality, price, image). As mentioned before, thesecoefficients express the importance (contribution) of each of these 3 drivers in theoverall satisfaction. The regression coefficient can have a value from 0 to 1.

This mapping system is particularly useful in providing a visual representation of priorityareas for improvement for the European Commission and DG SANCO to take into account.

Example: lets suppose that we find regression coefficients of 0.40 for price, 0.25 forquality and 0.35 for image. This means that price accounts for 40% of the observedsatisfaction; quality accounts for 25% of it and image 35%. In other words, pricecontributes most to overall satisfaction; this is the most important factor. This said, if

price reaches a low satisfaction score, it therefore becomes a priority area of actionfor policy-makers to increase the overall satisfaction of the sector.


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Four quadrants are formed:

- the upper left quadrant corresponds to a priority action i.e. situation where theitems satisfaction scores are below average whereas consumers expectations forthese variables are quite high (i.e. these variables contribute a large amount tooverall satisfaction). Consumers are not very satisfied with the items falling intothis quadrant whereas these are important items for them. This quadrant definesthe policy areas where action will have the greatest effect on overall consumersatisfaction.

- the upper right quadrant corresponds to an ideal situation, i.e. an area where noaction is needed. This is asituation where the items satisfaction scores are aboveaverage and consumer expectations are quite high for these variables. Consumersare very satisfied with the items falling into this quadrant. In addition, thesecontribute most to consumer satisfaction. This quadrant defines the policy areas

where action will have the least effect on overall consumer satisfaction.- the lower left quadrant corresponds to a low importance area i.e. a situation

where the items satisfaction scores are below average and expectations are quitelow for these variables. Attention should not be focused on these variables as theyare secondary factors. This is not a priority for the moment. This quadrant definesthe policy areas where action will have a small effect on overall consumersatisfaction.

- The lower right quadrant corresponds to a long-term action i.e. a situation wherethe items satisfaction scores are above average whereas expectations are quitelow for these variables. Consumers are quite satisfied with the items falling intothis quadrant but these items do not contribute much to the overall satisfaction.Although these are not priority areas, there may be an opportunity for raisingconsumers awareness about the importance of these items. This quadrant definesthe policy areas where action could have a longer term effect on overallconsumer satisfaction.

Example:

For a given sector, we find the following:

Satisfaction scores: 5.5 for price level (PRICE) and 7.9 for payment process (PRICE);6.0 for points of sale (QUALITY) and 7.5 for staff professionalism (QUALITY); 7.25

for reputation (IMAGE) and 6.8 for customer mindedness (IMAGE) Regression coefficient: 0.4 for PRICE, 0.35 for IMAGE and 0.25 for QUALITY

Average score: 6.83


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Expectations +

Priority actions

Price level (5.5)Customer mindedness (6.8)

Ideal situation

Payment process (7.9)Reputation (7.25)

Satisfaction

-

Low importance area

Points of sale (6.0)

Long-term actions

Staff professionalism (7.5)

Satisfaction+

Expectations -

Price level and customer mindedness are two priority areas for the sector given as anexample. These two items are of high importance to consumers (they make a considerablecontribution to overall satisfaction) whereas they obtain low satisfaction scores (comparedto the average). An action in these two areas would have the greatest effect on

consumer satisfaction.


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On the other hand, consumers are quite satisfied with payment process and reputation asthese items obtained satisfaction scores above the average. These two items correspond to

an ideal situation as they play an important role in consumer satisfaction. No action isrequired in these areas.

Staff professionalism performs very well as the satisfaction score is above the average. Forthe moment, this item is of less importance (it does not contribute much to overallsatisfaction). Communication in this area should raise consumer awareness of theimportance of this item.

Action taken in the area of point of sales would have little effect on consumer satisfactionas peoples expectations in this area are low.

3.2. STRUCTURE OF THE FINAL REPORT

The first part will present a descriptive analysis of the survey results for each sector - atthe EU and country level for each of the main topics assessed by the respondents. Theresults of the survey will be analysed by socio-economic group. Advanced analysis based onthe satisfaction model will complete this descriptive part.

In the second part we use graphs to show the percentage of consumers who are satisfied ordissatisfied with the eleven SGIs (services of general interest) by country and for the EU25as a whole.

The last part of this report will highlight the main findings of the survey. We will alsoconclude with recommendations for future improvements and research.


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B. DESCRIPTIVE ANALYSIS OF THE SURVEY

RESULTS

1. Electricity supply

1.1. OVERALL RESULTS

EU consumers are fairly satisfied with electricity supply: the average score at EU25 level is7.6 (on a scale of 1 to 10).

Compared to the EU15, there are relatively more satisfied consumers (those giving a scorefrom 8 to 10) in the new member states (62%) but also relatively more dissatisfiedconsumers (7% of respondents gave a score from 1 to 4). This result suggests thatconsumers from the new member states pay more attention to this service than EU15consumers but it could also point to higher differences in quality and/or perception levelswithin these countries.

The percentages of satisfied and dissatisfied consumers are displayed in the followinggraph:

EL. 1 Electricity supply: proportion of satisfied vs. dissatisfied consumers - percentages (2006)

62.3 6.7

56.5 4.9

57.6 5.3

0 20 40 60 80 100

EU25

EU15

NMS10

Satisfied

Dissatisfied

Overall, to what extent are you satisfied with your electricity supplier?% Satisfied vs. Dissatisfied


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1.2. DIFFERENCES BETWEEN EU MEMBER STATES

The following graph shows the percentage of satisfied and dissatisfied consumers percountry:

EL. 2 Electricity supply: proportion of satisfied vs. dissatisfied consumers by country - percentages (2006)

34.8

36.4

41.1

42.7

47

48.1

52.8

53.2

56.5

57.6

58.2

58.3

59.9

60.4

62.3

63.2

65.2

70.1

71.5

71.8

72.6

72.7

73.1

73.2

73.5

78.9

79.5

81.6

8.3

6.4

4

17.4

9.5

8.5

11.5

4.9

5.3

6.6

9.2

6.4

3.1

6.7

6.1

2.1

6.4

2.1

4.4

8.6

2.4

3.2

3.5

2.5

2.2

2

1.6

12.8

0 20 40 60 80 100

IT

PT

NL

ES

MT

EL

SK

SE

EU15

EU25

UK

CZ

PL

FR

NMS10

FI

BE

CY

LU

EE

HU

DE

LV

IE

SI

DK

AT

LT

Satisfied

Dissatisfied

Overall, to what extent are you satisfied with your electricity supplier?

Satisfied vs. Dissatisfied (% by country)

At country level, the proportion of satisfied consumers ranges from 35 % (Italy) to 82 %(Lithuania).


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Based on the proportion of satisfied consumers, EU countries can be divided into twogroups:

1. The first group includes countries where consumers are more satisfied than theEU25 on average. In descending order, these are: Lithuania, Austria, Denmark,Slovenia, Ireland, Latvia, Germany, Hungary, Estonia, Luxembourg, Cyprus, Belgiumand Finland. Most of the new member states (6 out of the 10) are in this first group.

2. The second group contains countries where consumers are less satisfied than theEU25 on average: Slovakia, Greece, Malta, Spain, the Netherlands, Portugal andItaly. In Portugal and Italy less than 40% of consumers say they are satisfied withtheir electricity supply.

The survey results also show that the proportion of dissatisfied consumers in Malta,Portugal and Sweden is higher than 10% (it is even 17 % in Malta). At the other extremefewer than 3% of consumers say they are dissatisfied in Lithuania, Austria, Belgium,Luxembourg, Denmark, Germany and Slovenia.


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1.3. DIFFERENCES BY SOCIO-ECONOMIC GROUP

The following graph displays the proportion of satisfied and dissatisfied consumers fordifferent socio-economic groups:

EL. 3 Electricity supply: proportion of satisfied vs. dissatisfied consumers by socio-economic category percentage (2006)

57.6

57.6

57.3

56

59.7

54.6

58.3

59

56.8

52.5

62

56.7

60

55.3

50.5

58.8

60.9

5

5.5

6.4

3.9

5.7

5.5

4.6

4.5

6.9

3.7

5.2

4.6

5.4

6.6

8.7

3.9

5.5

Men

Women

18-34

35-54

55+

Up to 15 years

16-19 years

20 years +

Still studying

Self-employed

Managers

Other white collars

Blue collars

Students

House-persons

Unemployed

Retired

Satisfied

Dissatisfied

Overall, to what extent are you satisfied with your electricity supplier?% by socio-demographics

Gend

er

Age

Education

Occupat

ion


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In terms of occupation, the graph shows the following results:

1. Managers (62%), retired consumers (61%) and blue collar workers (60%) tend to bemore satisfied than those belonging to other professional categories while the self-employed and house-persons are the least satisfied;

2. The unemployed tend to be more dissatisfied than the others with respect toelectricity supply.

In terms of age, people over 55 years old are more satisfied (60%) than the othercategories and than the EU25 on average.

Lastly, consumers who completed their secondary school studies tend to be more satisfied

than those who dropped out of school early.

1.4. OTHER KEY OBSERVATIONS ARISING FROM THE SURVEY

A) OVERALL IMAGE

In Austria, Cyprus, Luxembourg and Ireland, more than 7 consumers out of 10 considertheir electricity provider to have a positive image overall (as against an EU25 average of51%). Only 28% of consumers in the Netherlands, 31% in Portugal and Malta, 33% in Italyand 35% in Spain and Sweden consider their electricity provider to have a positive image

overall.

B) OVERALL QUALITY

For the majority of EU25 consumers (57%), their electricity provider offers a qualityservice. Austrians are the most satisfied consumers as far as the overall quality ofelectricity distribution is concerned (80% of consumers say they are satisfied).

C) OVERALL PRICE

Only 35% of consumers say that their providers prices are fair given the services provided.

Luxembourg, Slovenia, Finland and Germany are the only countries where an absolutemajority (from 50% to 52%) agrees with this statement.

D) COMMITMENT

In countries where consumers have the choice between electricity providers, i.e. inAustria, Belgium, the Czech Republic, Denmark, Spain, Germany, Finland, the Netherlands,Sweden and the UK, the vast majority of consumers have no intention of changing supplierin the short run (within a year). The only exception is Belgium, where only 46% say theyare committed to their supplier.


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E) MARKET AND PERSONAL FACTORS

More than 8 consumers out of 10 prefer to deal with a national electricity provider. Thesame proportion think that the services of these providers are available for everybody andavailable everywhere.

In liberalised markets, almost two thirds of consumers think that there is enoughcompetition. In the UK and the Netherlands, this idea is shared by 84% and 77% of usersrespectively, whereas only 28% of Czech consumers think so.

However, when asked about changing their provider, consumers are less convinced thatthis would be easy to do: only 54% believe that there are no barriers. The Czechs, Danes,Austrians and Belgians are the least convinced. 18% of Czechs, 22% of Danes, 35% ofAustrians and 36% of Belgians believe that it is easy to change from one supplier to

another.

Finally, only 23% of EU consumers think that it is possible to buy electricity from anelectricity supplier outside their country. A majority (41%) of them could not give ananswer.

1.5. ADVANCED ANALYSES

A) CRITERIA THAT CONTRIBUTE TO CONSUMERS OVERALL SATISFACTION

As mentioned at the beginning of this report, before taking any action to improveconsumers overall satisfaction, it is important to determine the criteria or elements thatinfluence and explain consumers overall satisfaction. These criteria are quality, pricingand image. This contribution to consumers overall satisfaction is calculated through aregression analysis which determines the relative weighting of quality, pricing and image inoverall satisfaction.

The weighting of each of these criteria (regression coefficient1) calculated for theelectricity supply service is shown in the following table:

Regression coefficients

Quality 0.302

Image 0.314

Pricing 0.493

1 These weightings can take a value ranging from 0 to 1, with 0 meaning that the criteria has no influence on overallsatisfaction and 1 meaning that it contributes fully to overall satisfaction.


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The regression coefficients show that all three factors are important. However, pricing hasthe biggest impact on satisfaction (i.e. consumers expectations as to price are higher than

for quality and image). This result can be partially explained by the fact that in theelectricity market the price elasticity of demand is low (an increase in the electricity pricelevel causes a less than proportional decrease in domestic demand). Another part of theexplanation is probably that, in a mature market with few differentiated products, themain (or remaining) factor that influences consumer satisfaction and choice of supplier isprice all other factors are considered to be good enough.

In other words, efforts to improve consumers overall satisfaction with the electricitysupply service need to be focused on pricing issues to a large extent and then on imageand quality.

B) OPPORTUNITIES FOR ACTION

In order to define precise and concrete actions to improve consumers satisfaction with theelectricity supply service, another advanced analysis needs to be performed: the two-dimensional analysis.

The aim is to determine:

the areas where the SGI does not perform well and where actions to change thesituation is needed in order to improve consumers satisfaction;

the areas where the SGI performs well and where no action is needed.

This is done by mean of a diagram taking into account the following information:

The average satisfaction score given by consumers to each criterion related toquality, pricing and image (marked as Satisfaction on the X-axis of the map)

The weighting or contribution of each criterion (quality, pricing and image) toconsumers satisfaction - this weighting represents the extent to which eachcriterion is important to consumers (marked as Importance on the Y-axis of themap).

The diagram on the following page shows the areas where priority actions are needed inorder to improve consumers satisfaction with the electricity supply service.


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EL. 4 Two-dimensional analysis - Electricity

Importance +

Priority actions

Transparency (7.05)Overall price (6.56)Commercial offer (6.41)Price level (5.81)Environmentally friendlyactions (7.22)Familiarity (7.15)Ease (7.07)

Customer service mentality(6.86)Uniqueness (6.74)

Ideal situation

Payment process (7.92)Accuracy (7.37)Popularity (7.75)State of the art technology(7.49)Overall image(7.43)Relationship (7.38Reputation (7.27)

S

atisfaction

-

Low importance area

Points of sale (6.64)Information (6.56)

Long term actions

Safety (8.11)Reliability( 7.96)Offer relevance (7.89)Overall quality (7.71)Confidentiality (7.69)Order ease (7.58)Staff professionalism (7.55)Infrastructure (7.53)Technical support (7.34)Availability (7.29)Questions/problem handling(7.29)

Satisfaction

+

Importance -


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OVERALL OBSERVATIONS

In the previous section, the diagram shows that perceived price is the element that has thegreatest influence on consumer satisfaction with their electricity supply service. Inaddition, consumers are not fully satisfied with price issues.

Therefore, it can be assumed that most of the opportunities for improvement are relatedto improving consumers perception of price and that these improvements wouldconsequently influence overall consumers satisfaction with this service.

Given the weighting of the pricing criteria (near to 0.5), any action that would lead to anincrease of 10% of consumers who are satisfied with the price of their electricity supplyservice would lead to an increase of 5% in overall consumers satisfaction with this service.

SPECIFIC AREAS OF INTEREST

PRICING

The elements of pricing that consumers are particularly dissatisfied with and that needspecial attention are:

the price level charged by suppliers for electricity distribution services;

commercial offers i.e. there are not enough attractive special tariffs for specificgroups of consumers;

the transparency of tariffs.

On the other hand, consumers are satisfied with the different options they are given to paytheir invoices (payment process) and the accuracy of the invoices received from theirsupplier. No particular action needs to be taken in these areas.

IMAGE

Overall consumers satisfaction can also be improved by taking measures that would:

increase the differentiation between electricity providers - consumers expect their

electricity provider to have a unique image that others do not have; Improve suppliers customer service mentality.

These observations might be explained by the fact that member states domestic marketsare not yet fully liberalised and that, even in liberalised markets, the competition is stilllimited (former state-owned suppliers continue to have most of the market share). In thiscontext of newly competitive markets, it is only now that major electricity providers arebeginning to feel the need to advertise and invest in their image or in added valueinformation services (e.g. related to price calculation or energy-savings tools).

To a lesser extent, consumers expect to deal with their supplier in a flexible way, toreceive more information about their suppliers services and expect their supplier to takeenvironmental concerns into account.


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QUALITY

As mentioned earlier, consumers tend to be satisfied with the quality of service providedby their electricity provider. Nevertheless, quality does not have a major influence onconsumers overall satisfaction with this service.

This does not mean that consumers show little interest in the quality of electricity orrelated services they receive. But it could be explained by the fact that, since they areused to receiving electricity on a reliable and constant basis, their needs are sufficientlymet and there are not many opportunities for improvement in this area.

CONCLUSIONS

Considering these statements, priority actions that need to be taken in electricity supply in

order to increase consumer satisfaction are as follows:

o increase the number of special tariffs and the transparency of tariffs on the onehand and decrease the price level on the other hand;

o strengthen the supplier image by developing a unique image and improvingcustomer service mentalities.

On the other hand, the following positive elements need to be maintained:

o the popularity and the reputation of suppliers, the type of relationship betweenconsumers and suppliers and the fact that suppliers deliver their products andservices via state of the art technologies;

o the accuracy of invoices and the ease of the payment process.


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2. Gas supply

2.1. OVERALL RESULTS

EU consumers are fairly satisfied with their gas suppliers: the average score at EU25 levelis 7.6 on a scale from 1 to 10.

The following graph shows the percentage of satisfied and dissatisfied consumers at EUlevel:

GAS. 1 Gas supply: proportion of satisfied vs. dissatisfied consumers - percentages (2006)

60.9 6.6

57.2 4

57.9 4.4

0 20 40 60 80 100

EU25

EU15

NMS10

Satisfied

Dissatisfied

Overall, to what extent are you satisfied with your gas supplier?

% Satisfied vs. Dissatisfied

Questions not asked for that service in Cyprus and Malta

The above graph shows that both the percentages of satisfied and dissatisfied consumersare higher in the ten new member states (considered as group). In most of these countriesfewer consumers take a neutral position (i.e. rating their satisfaction between 5 and 7out of 10). This finding is similar to the results for electricity supply.


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2.2. DIFFERENCES BETWEEN EU MEMBER STATES

The percentages of satisfied and dissatisfied consumers in EU countries2 are shown in thegraph below:

GAS. 2 Gas supply: proportion of satisfied vs. dissatisfied consumers by country - percentages (2006)

36.4

43.3

47.6

47.7

49.5

57.2

57.9

58.2

58.3

58.9

60.9

64.5

64.9

65.2

67.5

68.1

69.3

69.7

74.1

75.9

76.6

77.2

77.9

81.8

84.5

87.4

3.8

4.1

4

4.4

4.5

4.9

4.8

6.6

10.1

9.2

2.6

4.8

2.1

1.7

3.6

1.9

2.7

1.4

1.2

2.6

1.9

0.7

1.5

3.7

4.1

15

0 20 40 60 80 100

IT

SK

NL

ES

PT

EU15

EU25

FR

UK

PL

NMS10

CZ

HU

BE

LV

EE

LU

DE

SE

AT

FI

SI

DK

IE

LT

EL

Satisfied

Dissatisfied

Overall, to what extent are you satisfied with your gas supplier?Satisfied vs. Dissatisfied (% by country)

Questions not asked for that service in Cyprus and Malta

2 There is no gas distribution infrastructure in Malta or Cyprus. These countries have therefore been left out of thecomparisons.


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At country level, the percentage of consumers who are satisfied with their gas supplyservice ranges from 36.4 % (Italy) to 87.4 % (Greece).

Based on the percentage of satisfied consumers, EU countries can be organised into twogroups:

3. The first group is made up of countries in which consumers are more satisfied thanEU25 consumers are on averag

Consumer Service Finrep En

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