Why should customer satisfaction matter to a water utility?
Water utilities should continuously be looking to improve engagement and should never take customers for granted, says Malcolm Fabiyi.
The 4th JD Power annual customer satisfaction surveys for water utilities (2019) ranks the largest utilities in the US based on six factors – delivery, price, billing and payment, conservation, communications and customer service. Although there are about 20,000 clean water utilities across North America, the focus of the 2019 survey was on 89 utilities serving at least 400,000 people.
In recent times, while providing clean drinking water to their customers, at an affordable rate, far too many water utilities have taken their customers for granted. This is inexcusable, but understandable. Utilities are essentially monopolies. People who live within the range of specific water treatment systems don’t really have a choice of where to get their water from, so why should a utility bother to try to enhance the customer’s experience?
There are three reasons:
Firstly, the customer always has a choice. More people are using bottled water even when the water coming out of their taps is as good as, or in some cases even healthier and safer than bottled water.
The sleek marketing campaigns waged by beverage companies like Coca Cola and Pepsi for their bottled water, as well as the negative marketing efforts of filter companies, has made consumers increasingly question the safety of tap water.
The result is that water utility customers have no problems buying bottled water at a price almost 400 times more than comparably safe and healthy tap water! Worse still, if they believe that tap water is only good for flushing toilets, washing clothes and doing the laundry, then it is devalued even further.
"We live in a connected and networked world – one dissatisfied customer will get on Facebook, Google, Instagram and Twitter to share their horror story!"
Secondly, utilities routinely need to raise funds for infrastructure projects. Current estimates indicate that the US has a $1 trillion infrastructure deficit for water and sewage systems, which will require a doubling of rates if this price tag is financed by customers.
Customers who aren’t satisfied will certainly not feel enthusiastic about paying more for this while satisfied customers are more willing to support price rises to fund infrastructure upgrades.
The third reason is that we live in a connected and networked world, where customers are sharing their experiences on social media. One dissatisfied customer will get on Facebook, Google, Instagram and Twitter to share their horror story!
What the 2019 JD Power rankings reveal
By identifying utilities that are top performers, it is possible to use them as benchmarks and exemplars with valuable lessons that can help the rest of the industry understand best practices in customer relationship management.
Combined water and sewer rates come to over $300 billion per year in the US. Yet, there is little marketing that is done to engage the customers who provide these revenues.
The JD Power survey (excellent utilities in the small to medium range that have stellar customer engagement are not profiled), confirms that leading utilities consistently follow a LEAP™ marketing strategy: Leverage technology, Engage their customers on multiple social media platforms, Actively educate their customers and Partner with key stakeholders.
Reports of water quality issues have declined to 29 per cent of all residential water customers from a high of 34 per cent in 2016 – that is progress! The most frequently cited quality issues are low water pressure (12 per cent) and bad taste (10 per cent). Utilities would be well served to take this customer feedback to the operations’ arms of their systems.
A valuable insight from the survey is that customer awareness initiatives focused on infrastructure investments can significantly offset declines in customer satisfaction. The survey shows that satisfaction among customers who are aware of utility efforts to replace old water infrastructure is about five per cent higher, on average, than among those who are unaware of such efforts.
Furthermore, satisfaction among customers who say their water utility does a good job maintaining current infrastructure is 25 per cent higher.
Engaging proactively with customers can be very effective. Satisfaction scores were found to be eight per cent higher when customers recall receiving a proactive communication from their utility. Just 28 per cent of water utility customers recall receiving any communications from their utility.
Here are the WaterLEAP concepts the best performing utilities are using:
1) Leverage technology to ease transactions and foster transparency (L)
Utilities are guaranteed to hear from their customers during two situations – when they are paying their bills and when they have issues. Leading utilities make those engagements easy and less painful. They have automated their transactional systems, allowing consumers to register personal accounts online to track usage and pay bills. 100 per cent of the top performers enable online billing and payment. Many offer online usage dashboards and FAQs.
2) Engage on multiple social media platforms (E)
Top performing utilities use between three to five online and social media platforms to engage with their customers. Almost all of them have Twitter and Facebook accounts. A large number also have YouTube video channels where they post infomercials, and Flickr or Instagram accounts for sharing pictures, videos and images. Several utilities have tried to put a human face to the service they offer. They use memes and try to make customer engagement fun. Social media platforms are also used for addressing aggrieved customers i.e., service recovery.
Vendors have demonstrated the potential to save up to an 80 per cent reduction through implementing recycling systems.
Despite the progress that’s clearly been made, communication is still mostly a one-way street. Utilities are still not yet adept at responding to customer feedback. There is scant evidence that reviews are being read and addressed.
Water utilities miss out on opportunities for improving their customer service competencies by failing to engage with, or learn from the feedback offered by customers. On Google for instance, the reviews, even for the top performing firms, suggest that there is a significant disparity in the service experience that customers have with the same utility, sometimes based on which personal customer rep answers the phone when they call. This suggests that there is significant opportunity to raise customer service levels across the board through training.
3) Actively educate their customers (A)
Top performing utilities do a great job of engaging their customers. Beyond the basic provision of a platform that eases transactions, they offer great value-added content that educates and informs their users. They provide content in areas like water conservation tips, water sources, affordability programmes, community engagement activities, repairs and outages and infrastructure investments. Top performers also frequently link to other great content from outside organisations.
4) Partner with key stakeholders (P)
Many public utilities are part of a city government’s public works department. The best performing utilities leverage this fact for customer engagement. They have web sites and social media platforms that build on what other city government sites/services do. The best performers share common platforms wherever possible, higher site traffic is generated, enhancing the quality and quantity of customer engagement.
Miami Dade and NYC Environmental Protection offer great examples of how cities can make this partnership model work.
Chief Operating Officer