‘Customers are for life, not just for a price review’

Customer research by water companies must be clearly applied in price reviews and carried out on a continuous basis if long-term service improvements are going to be achieved.

That was the message from Ofwat and Consumer Council for Water (CCWater) on how to improve research and get the maximum value from data.

Speaking at CCWater’s inaugural research conference, Anita Payne, director of customer research at Ofwat said the regulator saw huge amounts of engagement for PR19 but added “it was not always clear how that engagement was used in plans”.

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 CCWater and Ofwat, but the two organisations feel there is further work to be done.

Tony Smith, chief executive of CCWater, said some companies used the insight to justify their plans rather than to understand their customers better.

Smith said: “Some companies only do research because Ofwat tell them to. There needs to be more insight and to do the research on a continuous basis not just for a price review.

“Customers are for life not just for a price review,” said Smith who is stepping down from the watchdog later this year.

He questioned whether research needed greater consistency between companies, or even a nationalised survey. Meanwhile, Payne suggested including comparative information within a survey would add value.

She echoed the need for ongoing research including business-as-usual activities and encouraged companies to use a variety of tools and methods to gather research instead of relying on a single methodology.

Mike Keil, head of policy and research at CCWater, said the organisation hoped to see a long-term shift in customer perceptions of fairness and value for money rather than a reflex response to the recent business plans. “We want to see the dial shift over three to five years because that’s a more sustainable change,” he told the research conference.

Payne said customer engagement is essential to reflect and capture the rate of change in society and technology combined with a better understanding of the impacts of climate change on the water sector.

Looking back on the price review, Payne said it was not Ofwat’s job alone to reflect and evaluate but urged companies to collectively carry out evaluation of all parts of the price review.