Utility customer engagement – the value in getting it right

Water companies need to think far more strategically about engaging with their customers, ensuring all staff understand the changing demands and…

Introduction

Gone are the days when communication with customers of water companies amounted to the sending of a paper bill, enclosed with brief information about efficient use of water, and marketing leaflets about use of water butts and offers of drainage insurance.

Engaging with customers

These days, water companies need to think far more strategically about engaging with their customers and ensure that staff at all levels of their businesses understand the changing demands and expectations of customers, whilst continuing to deliver the mechanics of what is still regarded as an ’invisible service’.

Engagement with customers in a meaningful way is not easy when trust in water companies is at an all-time low. That, coupled with customers’ easy access to a means of complaint via social media, results in water companies needing to work hard to address their critics (including the regulator, Ofwat, which now speaks directly to consumers as part of its “Water Stories” campaign) and to re-build public trust. So, how do water companies rise to this challenge?

In our opinion, ‘going back to basics’ is the key. Take time to understand your customers; find ways to engage with them and ask them what they think. As Claire Forbes, Senior Director of Corporate Communications at Ofwat, said recently at the Utility Week Water Customer Conference,

“Companies need to take into account how customers feel, rather than performing just the mechanics of the service”.

This requires companies to understand their social purpose and to enter into ’social contracts’ with customers. Some of the earliest water companies were formed to deal with social issues such as water-borne diseases and infant mortality rates, a solution for which was to engineer pipeline systems to enable water to be safely transported into homes. Nowadays, that social purpose can be achieved by educating customers about water, as well as being actively involved in communities, as many water companies already are. This would include visiting schools to educate children about the water cycle and making water not just that ‘invisible service’.

In delivering their social purpose, it is also important for companies to ensure that staff at all levels, and all across the business, are trained to deal with customers, including vulnerable customers who may be suffering with mental health issues, dementia or financial difficulties. Operational delivery also remains paramount. Water companies need to communicate effectively with customers, and their assets need to communicate with operational systems to ensure that customers receive a reliable, affordable service. Advances in technology, with the use of sensors and telemetry, constantly offer new ways for companies to proactively diagnose problems in the water system and deal with them more efficiently, before they affect customers.

Those technological advances should assist water companies in assessing how they can provide an affordable service to customers and in preparing their future investment plans for submission to Ofwat. The regulator’s scrutiny of those plans now seems more strict; only three of the seventeen water supply companies’ plans were recently approved by Ofwat. Whilst the plans submitted by Severn Trent, South West Water and United Utilities were approved at ’first pass’, the remaining fourteen companies are required to revise and re-submit their plans.

Conclusion

Understanding customers’ needs and how technology can be used more efficiently are areas where utility companies would benefit from collaboration across sectors. Water, energy and telecoms customers will encounter the same issues, and solutions to resolve those issues will be similar. With regulators encouraging collaboration across sectors, and with customers being genuinely interested in how their utility services are provided (as evidenced by Ofwat’s “Water Stories”), there is a real opportunity for utility companies to work together to engage with customers and fulfil their social purpose.

If you have any questions or would like to discuss any aspect of this article, please contact Tracy Lake (Partner).

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