Emotion, ethos and ethics

Water companies have already begun implementing measures and strategies to deliver on the three new measures of customer satisfaction.

The latest UK Customer Satisfaction Index (UKCSI) did not make the most positive reading for water companies.

While the water sector’s rating was somewhat unfairly marred by the poor performance of energy companies – the water industry indexes 1.1 points higher when energy companies are stripped out of UKCSI’s combined utilities rating – the January 2019 index revealed that customer satisfaction with the water sector had dropped by 0.8 points year on year. That’s a bigger fall than the all-sector UK average, creating a widening gap between the water companies and the rest of UK plc. The latest UK Customer Satisfaction Index (UKCSI) did not make the most positive reading for water companies.

Look beyond the headline figures, though, and there are some real highlights for water, including complaint handling. Here the industry 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 fell particularly short of the all-sector average – it is clear that there is still a lot of work to do.

We are now in a crucial time. Placing customers at the heart of the water industry has arguably never been more important, with the regulator having set out clear expectations on the service that customers should expect to get. Water companies are undoubtedly focused on their strategies and plans to drive service improvement.

Of course, a single report can only tell us so much; customer experience is inherently multilayered and complex. But it is nevertheless a valuable barometer, one that should be examined throughout the ongoing AMP7 period. This is especially true given Ofwat’s intention to compare company scores with the all-sector score under C-MeX, the regulator’s new measure of customer experience.

Complaint handling – bucking the trend

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

Complaint handling has been a key focus for water companies following the Consumer Council for Water’s call for the sector to do more on the issue. This is a clear example of how real focus can drive positive improvement. 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 for the sector will be to sustain this improvement, particularly as the complaint reporting methodology evolves to include multichannel 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

The latest UKCSI marked the introduction of some new customer experience measures – customer ethos, emotional connection and ethics – in a move that the Institute of Customer Service, which is in charge of the index, says “better reflects customers’ priorities”. Here, the results – which include some of the widest score gaps between the water industry and the all-sector average – indicate the sector has some work to do.

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 sectors such as retail. However, given that emotional connection is a reflection of transparency and reputation, it’s an area in which water companies will no doubt be looking to improve.

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

The next frontier

While the UKCSI has highlighted some interesting results, it should not be seen as offering a complete picture. It’s likely, for example, that the overall sector score could be affected by the research not including all water companies. The exclusion of some smaller water companies, some of which are high performers under Ofwat’s current service incentive mechanism, undermines the credibility of the overall sector result.

What is clear is that it’s too early to assess the impact of the various PR19 plans in the results of this particular UKCSI. While water companies have been implementing a variety of customer improvements, much of this year has been about planning and building – with many initiatives either not yet reaching customers or only just starting to.

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.