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With the new AMP well underway, Echo finds out how the UK water industry is addressing the customer services challenges it brings.

The introduction of the Service Incentive Mechanism (SIM), the possibility of the introduction of increased competition for commercial customers and an ever increasing need to become more cost efficient means that the UK water industry must re-evaluate its end to end service to ensure it is delivering the highest standards of service to its customers.

Echo’s white paper, based on research conducted on behalf of Echo by DJS Research, captures the views of the UK water industry’s approach to meeting the customer service challenges of the current AMP.

The white paper explores:

• The extent to which the industry is addressing the customer service challenges they are facing
• The impact the these challenges will have on the future of customer service and the strategies companies have in place to manage this impact
• How technology is being used to address these changes including, the use of billing systems, CRMs and web self serve

The white paper concludes:

It is no surprise that SIM and competition were key themes to come out of the research, but the wide disparity of approaches to areas such as metering technology and CRM is just as significant. Uncertainty in the water industry, and a general air of caution towards making any significant investment or decisions in the short term until the news from the regulator is more certain, was another common theme.

Billing systems

• For over 40 percent of companies, their billing system is not up to the job when it comes to SIM reporting. Despite recognising the limitations of their billing system, only three of the 14 interviewed were looking to change systems over the next AMP. There appear to be three main concerns around making changes to billing systems – cost, risk and uncertainty.
• Instead, the majority were looking to make investment in their existing systems, primarily to include CRM capabilities. The main drivers for increased investment was to improve customer service, ensure SIM compliance and improve web self serve capabilities. Although nine respondents indicated they would need to make changes to their system in order to record and report on the new SIM requirements, they also indicated they were unwilling to make large investments at the moment; instead they wanted to wait and see what direction SIM takes over the coming months. (possibly cut this last bit too?)

SIM

• When it comes to SIM, many water companies are focussing on reducing unwanted contacts. To tackle this successfully, companies must review the entire end-to-end customer service experience. Many companies indicated they expect their metered customer base to increase by 10-15 per cent over the next AMP leading to some recognition from the industry that improving bill accuracy needs to be a priority. However, less than half of respondents have a strategy in place to reduce the number of estimated bills. Those that do have a strategy in place tend to be the larger Water and Sewerage Companies.
• Encouraging customers to complete their transactions online is another key focus. Customers of nine of the companies interviewed are able to update meter reads or input new reads online. However, the majority of these (six) are queued for processing and only three are automatically updated.

Competition

• Seven respondents indicated they expect to be competing for more customers over the next AMP with many of those indicating they would be relying on a more defensive strategy with an emphasis on quality and customer service.
• So will excellent customer service be enough to retain customers? Or will it simply come down to who can offer the best price? With only five respondents indicating they intended to build some specific propositions for commercial customers does the industry have its head in the sand? Given the financial challenges currently facing UK businesses customer service might not be enough.