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Water market reform: exceeding customer expectations

From the Knowledge Centre

Chris Cullen, head of sales and marketing, drops in to discuss the non-household and possible household water market reforms and identifies steps water companies can take to stay ahead of the competition...

Next year’s water market reform will allow non-household customers to choose who supplies their water. Once the market opens, we may see an influx of new companies – eager to take advantage of the changes and grab a share of the market. But, with or without new entrants, existing water companies will need to be prepared to fight for custom.

And with similar reform possible for household customers from as early as 2020, it would be wise for water companies to put a robust customer acquisition and retention plan in place now. It will be vital to identify what will motivate a customer to switch supplier, and whilst price will be a major driver in a customer’s decision to switch, they may also want to a water company that is reliable, approachable and will solve issues quickly and without hassle. To compete effectively, water companies must offer a service that is both cost-effective and considerate of customer needs.

Looking beyond SIM
Whilst at present, water companies needn’t look any further than the SIM (service incentive mechanism) league table to compare their customer service performance against other industry players, once the market opens this is likely to change. Water companies are likely to face tough competition from each other and possibly from new entrants – some of whom may already be operating in highly competitive markets and will have expert knowledge in providing innovative and effective customer service.

"To be fully prepared, water companies must become more customer orientated, and look to exceed customer expectations in order to foster customer loyalty and build a strong brand reputation."

Some key considerations are:

1. Building an in-depth customer profile
To be truly customer-centric, water companies must be able to put together the most accurate picture of each customer and their unique preferences and needs. To help create this, a reliable and robust billing and customer relationship management (CRM) solution must be in place to support service excellence.

As water companies separate their wholesale and retail functions, the solution they put in place must equip them with the tools needed to compete effectively in both markets and assist them in offering added value to customers. It’s essential that the billing solution provides accurate billing information and helps to solve any potential bill disputes, as well as helping water companies to achieve compliance in time for shadow market opening.

2. Offer great multi-channel customer service
For a well-rounded service, the right billing and CRM solution must be complemented with impeccable customer service. For water companies, good service is often around helping customers to resolve issues easily and effectively at the first point of contact. Water companies must maintain a consistently high level of customer service across multiple channels, bearing in mind that whilst some enquiries can be resolved effectively and quickly through self-service channels, when it comes to more complex and sensitive enquiries it is often a human touch that is needed.

Research we recently conducted found that 53% of customers still prefer human contact when it comes to interacting with businesses, especially when they have a complicated enquiry. With this in mind, water companies must allow customers a range of channels and let them decide which to use; deploying quick and convenient self-serve channels for simple tasks whilst ensuring advisors are highly skilled, empowered and confident to deal with more complex enquiries with empathy and understanding.

3. A Customer-centric approach to debt collection
The Money Advice Service recently announced that 8.2 million adults (16.1% of the population) are in debt – but only 17% of these people actually seek advice. To reach out to customers who are reluctant to ask for help and offer support, it’s crucial that water companies identify circumstances of vulnerability as early as possible and seek to improve awareness of affordability schemes.

Of course, not all customers in arrears are suffering from income deprivation – sometimes customers don’t understand their bill or want to dispute the amount. Water companies must take all reasons into consideration and have a joined up approach throughout the entire debt journey.

"Debt must be viewed as just another a stage in the customer journey, and those companies who take a customer-centric approach will be the most effective at supporting customers and getting them back on track whilst protecting customer relationships and brand reputation."

One recurring issue associated with customer debt is a lack of regular engagement opportunities - where water companies have the chance to talk directly to the customer. One reason for this is because water bills are issued annually and without regular reminders. As a result, customers can quickly forget that a payment is due. Water companies should put in place proactive customer engagement strategies, focused around key billing times. Regular on and offline customer engagement can go a long way to build trust and ensure bills are understood.

For customers in early arrears, customer rehabilitation can often be successfully achieved before the situation becomes less manageable; often all that’s needed is a gentle reminder or a sympathetic ear and some sound advice. Listening to the customer, getting to know their personal circumstances and offering the right advice or payment solution can prevent a longer lasting problem. This relies not only on data insight, but also on having empathetic and understanding front line advisors in place. Offering customers useful advice and having their best interests in mind during difficult times will also help build lasting brand loyalty.

Will you be ready?
Once reform comes into effect, water companies may face fierce competition, not only from existing players, but also newcomers. Therefore, a deep understanding of customer drivers and motivators is a must. Opportunities to truly add value for customers may be limited, and it’s important to recognise that whilst customer service may be a differentiator, the nature of water supply means there’s only so much service excellence you can offer. What’s important is that customers are offered choice in how they interact and that service is right first time or fixed quickly when things go wrong.


Suggested Further Reading

Knowledge Centre: Research

Counting the cost of debt recovery

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