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Winning at emotion, ethos and ethics: how can the water sector strive for more?

From the Knowledge Centre

Published May 31st 2019 in Customer Contact & Engagement by Monica Mackintosh

Monica Mackintosh, MD at UK utility sector outsourcer Echo Managed Services, discusses the UK Customer Satisfaction Index and how the water sector compares against other UK business sectors.

The latest UK Customer Service Index did not make the most positive reading for water companies.

The utilities sector – which encompasses both water and energy companies - has no doubt become accustomed to a low-table ranking - although the water sector position is somewhat unfairly marred by the lower performance of energy companies; water actually indexed 1.1 points higher in isolation. However, the water industry has dropped by 0.8 points year-on-year, a bigger decline than that of the all-sector UK average, creating a widening gap.

Looking beyond the headline figures, there are some real highlights for water including complaint handling – where it indexed significantly higher than the all-sector average across all measures. However, when it comes to emotional connection, customer ethos and ethics, areas in which water recorded some of its biggest gaps against the all-sector average, it’s clear there is still a lot of work to do.

It’s a crucial time. Placing customers at the heart of services has arguably never been more important, with the regulator setting out clear expectations when it comes to customer service. Water companies are clearly focused on their strategies and plans to drive improvement.

Of course, a single report can only tell us so much; customer experience is inherently multi-layered and complex. But it’s a valuable barometer and one to examine throughout the ongoing AMP7 period. This is especially true given Ofwat’s intentions to compare companies to the all-sector score under C-MeX; its new measure of customer experience.

Complaint handling – bucking the trend

One area of strong performance was complaint handling (one of five core UKCSI scorecard dimensions). Water scored 5.3 points higher than the all-sector average and ranked fifth out of 14 sectors in this customer satisfaction dimension. This includes handling of the complaint, attitude of staff, speed of resolution and outcome; a palpable outperformance compared to the sector’s overall UKCSI score.

Complaint handling has been a key focus for water companies following the Consumer Council for Water’s pressure on this topic, which called on the sector to do more. This is a clear example of how real focus can drive positive improvement. In fact, we’ve seen a noticeable shift from process-driven complaint handling to a more proactive and empathetic approach based on each customer’s circumstances.

The challenge will be to sustain this, particularly as the complaint reporting methodology evolves to include multi-channel complaints. But there’s a real feeling that the tide has started to turn, as the sector drives proactive complaint prevention and resolution.

Winning emotion

This UKCSI marked the introduction of some new customer experience measures – customer ethos, emotional connection and ethics, in a move that the ICS says “better reflects customers’ priorities.” Here, the results indicate the sector has some work to do; recording some of its widest score gaps against the all-sector average.

It’s fair to say that many customers simply don’t have, or don’t want to have, the same emotional connection with their water supplier as in other sectors like retail. Given, however, that these dimensions measure trust, transparency and reputation, it’s an area in which water companies will no doubt be looking to improve.

With companies looking to offer a more inclusive service for customers, building an emotional connection with more hard-to-reach customers, for example, can be vital in providing much-needed support. Also, greater community engagement – a focus in many water company plans – is key to improve perceptions around trust and transparency. It will be interesting to see how the scores in this area evolve moving forward, with C-MeX an important new driver for improvement.

The next frontier

Of course, whilst the UKCSI has highlighted some interesting results, it cannot be considered the complete picture. It’s likely, for example, that the overall sector score could be impacted due to the research not including all water companies. The exclusion of some smaller water companies, some being high-performers under Ofwat’s current Service Incentive Mechanism, must cast a degree of scepticism over the overall sector result.

What’s clear is that it’s too early to see the impact of the various PR19 plans in the results of this particular UKCSI. Whilst water companies have been implementing a variety of customer improvements, much of the time in this year has been in the planning and building – with many initiatives only just, or yet to reach customers.

However, if water companies deliver what they say they will, we should be hopeful of seeing an improved score moving forward. This will be reliant on much more than just systems and processes; it’s about a real step-change in people and culture.

- Monica

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