As non-household market opening draws closer, water companies and new entrants are working hard to put strategies in place to ensure they stay ahead. One element needing attention is the customer billing experience; something we see as key to maintain successful customer relationships and achieve sustainable success.

Water billing hit the headlines earlier this year, when a report by the Consumer Council of Water revealed that written complaints had risen for over half of water companies in England and Wales, with billing and charges accounting for over three in five of the registered complaints.

This is of concern, considering our recent research with 1,000 UK households. This revealed that one in seven would definitely switch supplier if they had a billing issue, whilst almost half would consider it. They also told us which sectors they rank highly for billing, placing water below telecoms, broadband and credit card companies.

Here are five key things for water companies to consider when it comes to billing customers:

1. How people want their bills and how they want to pay them

It won't surprise you to read that over half (57%) of people we surveyed prefer online billing. But, what's worrying is that, for bill payers who noticed an impact since receiving online bills, one in three are less aware of what they pay each month. Engaging online bill payers is a must, to avoid the risk of escalating issues being stored up for the future and to ensure companies do not become invisible to their customers.

Don't forget those customers resistant to online billing. Our research revealed a significant minority still want a paper bill, and this preference is strongest for lower income families (31% in the less than £10k pay bracket). By introducing charges for paper bills, or completely removing the option, water companies risk frustrating up to a quarter of their customer base.

When it comes to payment, 65% told us they prefer direct debit arrangements, leaving 35% who clearly like the feeling of control that comes from manual payment. Pushing all customers onto direct debit can actually serve to undermine trust and damage relationships. We've all seen the headlines regarding monthly payments that are too high. It's important to give customers payment choice and ensure they are on the best tariff for their needs.

2. The good and the bad

Here, customers told us about good practice they'd experienced and issues they'd encountered:

Good practice benefits both the customer and the service provider - often reducing the risk of a missed payment, helping sell additional beneficial products and services and reassuring a customer about their deal. Common issues that customers experience include inaccurate billing, poor support and a lack of open and transparent communication.

Knowing when to communicate can be tricky as unwanted contacts are both irritating and expensive. It comes down to knowing your customer, identifying behaviour patterns and giving customers the option to tailor the alerts they receive.

3. Better clarity is a must

Don't assume customers understand common billing terms, they are still regularly confused by terms used on bills. Chargeable value is one of the worst offenders baffling three quarters of our research respondents. Simpler terms such as account balance baffle almost one in three.

In fact one in four customers told us that the biggest change to billing they want is greater clarity, and 70% told us that bills had either stayed the same or got more difficult to understand in the past few years. Simplifying terminology and explaining clearly what each terms means can help. Signposting to more in-depth online resources and well-trained contact centre staff can add the extra level of detail and support that customers might need.

4. Perks and benefits

Common in more competitive sectors such as telecoms, just how impacted are customers by perks such as priority tickets and discounted meals deals? Well, a quarter of people we asked are significantly affected by perks, with 21% of these saying they'd remain loyal to a service provider offering relevant and valuable perks.

However, on the flipside 17% told us that they find perks annoying and would rather they weren't offered at all. Using each and every interaction to build data, listen and gain understanding can really help to offer the right benefits to the right people in order to add real value.

5. Competitive vs. regulated

In sectors where there is the most intense competition for customers (such as mobile and credit card companies), one in three customers scored billing as eight out of ten or better. Clearly, water companies can learn a lot from service providers operating in competitive sectors.

Service excellence can, and will, act as a key differentiator, and in order to compete in a competitive sector companies must become more customer-centric. The relatively low scores for energy companies within our research should act as a warning for water providers: not to repeat the same mistakes of energy deregulation when it comes to customer billing.