Service attracts gushing praise
Raising customer satisfaction levels in the water industry is becoming an increasingly complex business.
Back in 2008, before the supply of Scottish water and waste water services supply to commercial premises was opened up to competition, and even for a time after that, Business Stream – a component of the publicly-owned Scottish Water group – had a grip on the commercial customer base, from Gretna Green to John O’Groats.
Today only half of that market is accounted for within its portfolio, yet it remains Scotland’s biggest non- domestic water supplier – one boasting a new position of power, partly as a response to ongoing legislative change.
Imminent English deregulation and a strategic acquisition south of the border that will almost double its future customer numbers account for some of its bullish stance.
But a deeper understanding of customer service is arguably an equal player in articulating the organisation’s strengths to prospective customers.
Customers’ perceptions of partnership and relationship building are now key for all who hope to succeed in this sector.
Mike Petrook, Director of Policy at the Institute of Customer Service (IoCS) in London, is well placed to comment on this rationale. IoCS analyses satisfaction across 13 industry sectors, utilities being one and water being a major element in this category.
Looking at the utilities as a whole Petrook notes: “What we’re finding is customer satisfaction is going up and it has gone up to its highest point for three years.”
IoCS applies 35 different measures in its annual UK Customer Satisfaction Index, the 2016 version of which has just been published.
Is this scenario simply a reflection of frustrated customers lowering their expectations.
“I don’t think it is that,” he says. “We’ve seen complaints levels fall but at the same time we have seen a number of organisations making greater effort to improve their customer service.
“Some of that has been about increasing the number of channels that consumers have in order to raise a complaint, some has been increasing the level of engagement their organisation has with customers.
“When people think of customer service they think of complaining. Wider research that we’ve done shows that 39% of people actually engage with a particular brand in order to provide feedback.
“In other words, t hey’re saying: ‘If I buy from you I want to be involved in developing the product’. It’s not just people complaining, it’s actually getting involved and saying: ‘Think about this’.
“Go back five years or so and we were in what might be described as a transactional economy – want a product or service, pay for it, get it. I believe we’re now in the middle of what I’m calling a ‘relationship economy’. It’s not just about paying the money and getting a service.
“What brands are realising is they have to build a relationship in order to increase loyalty and trust. One thing that we’ve discovered from the latest piece of research is that being good (in the pure supply function) isn’t good enough anymore.”
Petrook offers some statistical eye openers as evidence.
“If an organisation scores eight out of 10 for satisfaction people are 38% likely to recommend that organisation. If however, they are scoring nine or 10 out of 10 for customer satisfaction, that recommendation goes from 38% to 54%.
“In other words, there is a massive difference between being good and delivering excellence in customer service. Five years ago price was the dominant factor in people’s choices. Now it is about behaviours. Employee attitude, employee skills and employee competence.
“Because people are extremely busy, when we want to do something we want to make sure that it’s right first time.
“That means if I’m phoning to ask a question about my water bill I need to be confident that I’m going to get the right response. If I’m phoning to ask a question about changing the rate that I’m on, am I going to get the right level of advice?”
With further number crunching Petrook suggests only 26% of utilities customers, domestic and business, are today swayed by price over behaviour.
“How easy an organisation is to do business with is an important factor. It is slightly down in the utilities sector compared to the national average (for all sectors). On a 10 point scale, it’s 7.5 for the utilities sector compared to 7.9
for the all- sector average,” he indicates.
“But there are other things in there, such as the helpfulness of staff. That’s a score of 7.8 for the utilities sector. So the suggestion is that they’re not doing badly. Three things are important: convenience, choice and value.
“It’s not an easy business, that’s for sure. But that is why getting it right first time is so important. One of the things I think is interesting is that in 70% of cases the sector does get it right first time.”
The message of choice, convenience and value carries resonance with Kate Bremner, Business Stream’s Head of Commercial Development – with some caveats.
It’s a month since her employer bought Sussex-based Southern Water’s non-domestic customer base, then launched new pricing into the business market in Scotland.
The English deal in one go will create the third biggest UK nondomestic water retailer and waste water services provider.
It will have a combined UK market share of 10%, giving the Scottish player a major foothold in an English market opening to competition on April 1 next year. Only the largest businesses in England have previously had the option to choose supplier.
It means up to 40 new jobs landing at Business Stream’s Edinburgh headquarters.
Bremner has no reason not to welcome competition.
“Absolutely,” she agrees. “I joined the business before the market opened in Scotland and it’s brilliant to see the transformation that’s happened for customers – better service, improved pricing, more innovation in the market and with the opening-up of the English market next year we’re actually going to see that increase. What’s good for customers is good for us.”
It might not always have seemed so. When predatory English suppliers saw an opportunity in Scotland’s now mature open water market, there were competitive concerns.
“When it wasn’t definite that the market was to open up down south it did feel unfair but we got on with it,” remarks Bremner. “But with the market opening up in England the playing field is now much more level.”
Not as level as she’d like, however. The margin may initially be less attractive.
“Scale is important,” she adds. “Hence the reason for our Southern Water acquisition.
Size may matter in the financial analysis but, as IoCS’s Petrook implies, customer service standards are likely to count as being just as bankable.
In seeking to avoid a one size fits all label, Bremner reasons: “It all depends on the customer group. Different sizes and make-ups of customer look for different things. It’s about providing a tailored service back to them while doing it at a price that the customer sees as value.
“So, yes, price is important to the majority of our customers – but it is not the only thing.
“We offer 60 different services to our customers, ranging from consolidated billing to the best online account management portal in the market to clever AMR (automatic meter reading) technology that lets people track their consumption, through to big water and wastewater treatment projects. Offering a wider range of added value services comes into the mix as well.”
She refutes any suggestion this seems only to favour high-spend corporate customers. “One of the biggest launches we’ve done over the past three months is a firstin- market online quoting and contracting tool,” she says.
“Instead of a customer having someone turn up at their door or phone them they can do it all online.” It is a method attractive to smaller business owner/ managers.
In a mature Scottish competit ive market customers are naturally conscious of their ability to switch supplier. Bremner takes a balanced view, having seen a return of some customers who had elected to try other service providers, lured there on price and curiosity.
“The grass isn’t always greener,” she asserts. “Maybe some of the tariffs that competitors were offering weren’t as transparent as they initially appeared. Sometimes the customer service wasn’t great where they went.
“Also, I think having competition has naturally forced us to raise our game. Our prices are keener than they were two years ago, while the customer service and the range of online services we offer is continuing.
“People say you have to switch to get a better price. In the past year we’ve invested more in making sure that customers don’t have to. We’re being proactive.”