Are Water suppliers ready for the latest cost-of-living challenges?

Recently, we drew attention to the existing struggles that Water customers are facing:

• One in five people (20%) are struggling to pay their water bill, up from one in seven (15%)
• One in nine people (11%) are currently in receipt of financial help from their water company (up from one in seventeen, 6%)

To support customers, Ofwat have set out a series of vulnerability standards, with an expectation that suppliers will have appropriate support in place for those that need it. So far, their view is that “awareness of the support available for those struggling has continued to remain low”.

As a new wave of customers start to feel the effects of added financial pressure, it’s vital that suppliers have the right service quality and operational processes in place to provide the support needed, while facing the prospect of increased demand.

Customer satisfaction has plummeted, but why?

The Institute of Customer Service (ICS) showed in their July 2023 UK Customer Satisfaction Index (UKCSI) that customers are more dissatisfied than ever, with the index at its lowest score for 8 years.

ICS called out that water companies are struggling to offer best in class experience, with satisfaction in the sector falling 5% to below the index average.

Customers continue to look for great service, and the ICS report called out the top three improvement drivers as being:

1. Easier to contact the right person to help me
2. Friendly / helpful staff
3. More knowledgeable staff

Additionally, customers also don’t want to queue – the age-old hold message of “we’re receiving more demand than expected” is no longer appropriate, with customers feeling that suppliers should have more staff available – but as frustrating as queuing is, this is less important than getting it right first time.

To develop a culture of service excellence, suppliers must focus on five key metrics:

1. Prevent problems and improve complaint handling
2. Make it easy for customers to access help and expertise
3. Respond to customers’ personal situations and needs
4. Professionalising customer service
5. Do the right thing in business practice: balancing the needs of shareholder, customer, employee and wider society

What does all this mean for water suppliers?

Water suppliers are going to be under added pressure in three core areas.

1. Service demand
   
   Reduced ability to pay and/or higher bills will lead to increased demand into frontline service teams.
   
   
2. Customer debt
   
   Increased debt will put a reliance on high quality contact strategies with the ability to identify those that are financially vulnerable for appropriate treatment.
   
   
3. Customer complaints
   
   More contact and debt = more complaints. There will be more emphasis than ever on first call resolution and efficient complaints handling processes.

What can water suppliers do?

1. Service demand

Firstly, suppliers must take the right steps to ensure avoidable demand is kept to a minimum.

When it comes to reducing demand there is no silver bullet, but there are some simple actions that suppliers can take to drive improvements.

• Review outbound communication to ensure you are being clear with your message and the ask of the customer
• Review repeat demand and address the key drivers
• Be proactive. SMS and Email is a great way to keep customers informed and assured

Secondly, suppliers need to provide their people with the skills, tools, and coaching that will allow them to have high quality conversations with their customers. Getting this right will leave customers feeling supported and educated, while helping suppliers to rebuild trust when it’s most needed.

Personalised coaching plans, supported by a meaningful quality framework, will help your people to develop, while call listening and calibration can provide a good forum to understand how well embedded your ways of working are.

2. Customer debt

As the customer’s financial landscape changes, so will the expectation on suppliers to support them appropriately. Suppliers should be considering the strength of their ability to pay processes, which will be called upon more and more. As well as segmented journeys for debt, tailored treatment paths should be implemented, designed with financially vulnerable customers in mind.

Doing this well will ensure customers receive the right type of messaging and signposting of support.

There are also proactive steps that suppliers should be taking regarding ability to pay. This could include utilising new techniques like machine learning to build a comprehensive understanding of customer situations. We recently helped a large energy supplier to implement this technique, identifying trends to predict and prevent customer delinquency.

3. Customer complaints

When a customer contacts a supplier to complain, the best journey they can experience is for their issue to be resolved there and then. It is also the best option for the supplier. Complaints not resolved immediately tend to drag on and cost significantly more to service. It is in everyone’s interests to resolve the issue on that first contact.

Suppliers should be focussed on:

• Giving skills and access to front office teams, to reduce unnecessary downstream demand
• Having a localised triage in place, to reduce escalated complaints
• Not accepting mediocrity, focussing on enduring tailored customer solutions – rather than quick first time resolutions that become repeat calls, complaints and contacts
• Staying in touch with customers; pre-agreeing where possible and obtaining all necessary information

We’ll be discussing these topics in more detail over the coming weeks, sharing a series of Water insights to help suppliers manage the latest round of cost-of-living pressures.

If you’d like to know more about how we can help, contact Kev Brown or Joe Cooper.