Complaints handling under the spotlight

Ofwat’s PR19 determinations make customer service essential to operational resilience.

Anticipating significant market changes – likely to be brought about by the impact of climate change and increasing customer expectations – Ofwat’s PR19 price determinations have been devised to support water companies across the UK as they build up operational resilience for the decade ahead.

Through PR19, Ofwat is seeking to guide providers in putting in place policies, processes, people, and infrastructure that will ensure better service for customers. These ambitious proposals clearly indicate to providers that the regulator expects improvements to be made, and that it will take customer satisfaction as a crucial gauge of success.

Customer service and complaint handling

Since December last year, Ofwat has been monitoring customers’ satisfaction with their water companies through the C-MeX score, and has said companies that “go above and beyond” will benefit from further financial support, while those that don’t will be penalised and asked to return value to customers through lower prices.

Of course, this puts a strong financial incentive on investing in excellent customer service and delivering the best possible outcomes for customers. Achieving this means putting customers at the heart of operations, ensuring that they feel valued and looked after at all times.

Businesses can demonstrate this ­customer-centric behaviour especially well in the process of handling complaints. Naturally, mistakes in billing, burst pipes and other day-to-day woes of water companies will never be completely eradicated, but it is in how businesses respond to these events that they will display their dedication to customer outcomes and satisfaction.

As such, getting complaint handling right should be a key priority for water companies preparing for their first C-MeX surveys in 2020.

Following the release of the PR19 final determinations, water firms need to undertake audits of their current practices, procedures and infrastructure to make sure they align with the regulator’s expectations. They need to be asking themselves:

• How long does it take customers to get a response to their query?

• Can customers contact us through a variety of channels according to their preference?

• Do customer service staff have the knowledge and expertise to answer questions from customers?

• Are they going the extra mile and offering proactive advice and support in the light of an issue?

If, during your audit, you find that your customer service could do with more attention, investment or change, this should be made quickly and with appropriate guidance. After all, all of the above factors will have a great impact on overall customer satisfaction, advocacy and retention.

Huntswood’s 2019 Complaints Outlook, for example, revealed that while 88 per cent of utility providers believe their customers are satisfied with their complaints handling, only 12 per cent of customers report that they are satisfied. This is a significant perception gap, which water companies must now seek to bridge, with advance planning for disruption and surges a key consideration.

At times of extraordinary disruption, customer service teams are put under the most pressure. However, Ofwat will be looking for businesses to evidence clear and effective communication skills regardless of this. As such, having contingency plans in place will be critical going forward. Businesses should now explore the processes and policies that impact service continuity in the event of a problem and update them appropriately.

Helping vulnerable customers

Vulnerable customer regulation is an area of increasing focus for Ofwat.

According to the determinations, at least 7 per cent of each water company’s customers will be registered for priority services by 2025, two million more than the current figure. While this is a good step towards helping those in the most challenging circumstances, it is important to note that this isn’t the beginning and end of defining and recording which customers are vulnerable. To get ahead of the issue, firms should now be looking at where any significant change is required.

Following this, they should be able to better understand whether additional staff or training are required, both of which would allow firms to better identify and support vulnerable customers.

It’s hugely important staff feel empowered to have what may be difficult conversations with customers. Specialist training should help to ensure all communications are approached with the right level of care and sensitivity.

Providing clear advice and support first time round will also help reduce the likelihood for complaints in future, while having extra day-to-day support will allow specialist teams to focus on delivering enhanced services to vulnerable customers.

The opportunity

Ofwat has sent a clear message to water companies in PR19: there will be a shift away from the status quo.

Though change is always trying, this is an unprecedented opportunity to unlock investment in the sector and become truly resilient for the decade ahead. Ensuring the highest standard of customer service and complaint handling will be an essential part of this.

Providing clear and proactive customer communication should be a key priority for firms moving into 2020, helping to not only reduce overall complaint volumes, but also increasing customer satisfaction with the water sector in the long run.