CCW says water sector research is failing to engage customers

Better informed participants results in better quality consumer engagement data, a paper by CCW has concluded.

The water sector consumer watchdog found that people who take part in company research have limited interest or understanding of the subject, suggesting the validity of responses is therefore limited.

PR19 saw greater levels of consumer engagement than any previous price review and companies widely cited the input of billpayers within their business plans, and now in the subsequent appeals to the Competition and Markets Authority (CMA).

As part of a study into how organisations undertook research when writing their business plans, Mike Keil, head of policy and research at CCW said participants were found to struggle with some elements of what they are asked, and would prefer “experts” to be consulted on their behalf.

“For business plans, many things don’t feel relevant or easy to follow, and some consumers default to looking at prices as a way of navigating what they are being asked. It is much easier for people to respond to questions about recent service experiences.”

CCW said this raised questions about the validity of the information water companies are acting on when making their plans.

Blue Marble, the group that conducted the research, found participant interest broadly fell into four categories ranging from “I don’t care” to those who enjoyed the process and wanted to analyse all available material. However, the majority of participants were categorised into either “leave it to the experts” or those who wanted to be involved but struggled to understand the information or its importance.

The research found many participants were reluctant to engage because they found the water sector “actively boring”. Without much awareness or interest in why water research is relevant participants usually relied on financial incentives.

CCW and Blue Marble made eight recommendations to consider in future consumer research:

• Research is reputation-building so provide a gold standard experience. CCW said the sector must prioritise the respondent experience such as tailoring materials and methods to different segments, improving the appeal, comprehension and therefore effectiveness of surveys and stimulus materials
• More explanation should be given about the context and relevance of the research exercises for respondents, so they see the value in participating
• Companies could adjust how they use their standard research especially for harder to reach billpayers such as vulnerable or non-household customers
• Greater understanding of customer needs and expectations generally should make the business planning timetable easier. CCW said understanding consumer views on related-issues should help water companies to be customer-centric without having to test every part of their business plans
• Tell people more background before asking their opinions. People who did not understand the processes they were being asked about was, according to CCW, a less meaningful exercise. It is more valid to ask for views on business planning topics after explaining them to participants
• Design and analyse future-focussed objectives with care because participants were generally found to be reluctant to speculate about future needs or social and environmental factors. This was an area that many people believed expert opinions should be sought
• Using consumer research to understand broad concerns and support of different projects is useful but asking members of the public about the technical specifications and aspects of a business plan was generally seen as overwhelming and unhelpful
• Make greater use of ‘expert consumers’ and true ‘co-creation’ methods. CCW said ‘expert consumers’ who had an interest in the technicalities of the plans were useful because these people could immerse themselves in the issues and give informed perspectives

The water watchdog urged companies to reconsider their approach to engaging with billpayers before preparations for the next price review get underway.

CCW previously said research should take place on a continuous basis if long-term service improvements are going to be achieved, not just around a price review.

Water companies engaged with around five million people while preparing their business plans for PR19, a steep rise from 250,000 for the previous price review in 2014. This increase was encouraged by both CCW and Ofwat, but the two organisations feel there is further work to be done.