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Ofwat has revealed plans to overhaul the way water companies are assessed on customer service.
The regulator has tabled four options for how companies will be measured on customer service performance and incentives applied.
C-Mex was introduced at PR19 measuring customer experience and service via surveys to customers who have had contact with their supplier as well as randomly selected billpayers in each company’s region.
The regulator has suggested modifying how scores are calculated and will select one of the four proposals to implement by 2025.
One idea is to apportion equal weighting to customer experience survey (which is currently worth 50%), the surveys for billing contacts and feedback from billpayers experiencing operational incidents (each currently worth 25%).
A different option would be to add a fourth component to the assessment criteria and give each a 25% weighting in a company’s score. Ofwat proposed including feedback specifically from billpayers on reduced charges such as social tariffs and support schemes.
Separately, the regulator suggested including a component for customers who have had escalated complaints when issues were not resolved the first time by the company. Here again, Ofwat said each four elements would be equally weighted at 25%.
Alternatively, the current model could remain.
Other improvements being mulled are to make greater use of cross-sector benchmarks to put stronger incentives on companies to improve, and make outperformance only available to water companies that are better than average companies in other sectors – not just water.
They would still compete with one another, Ofwat said, but with more focus on cross-sector comparisons.
Incentive payments at PR24 could be calculated based on a proportion of regulatory equity, which Ofwat said would “maintain investor focus on improving customer service”.
Since its inception in 2020, C-Mex has faced criticism.
Ofwat replaced SIM with C-Mex to be able to benchmark water companies against other sectors. But the new approach does not capture complaints and is yet to show merits by comparing with outside the industry.
No companies have outperformed against the existing metrics so far this price control period, prompting Ofwat to reconsider how feedback is collected as well as the targets each company has.
C-Mex – and D-Mex for developer services – were introduced at PR19 as the measure of customer experience to incentivise companies to improve billpayer service.
Annual C-Mex scores are graded out of 100 based on two satisfaction surveys, one of which is based on feedback from randomly-selected members of the public and the other based on the satisfaction scores of consumers who have directly contacted their water company.
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