Many water utilities are now harnessing customer insights to inform decision-making and, at a broader level, are prioritising customer-centricity in business models.
Along with promoting enhanced customer satisfaction and trust, targeted collaboration can play a pivotal role in helping to shape a utility’s strategic framework and planning priorities, with utilities linking customer-derived insights to asset management and investment decisions.
However, in order to realise the full benefits of embracing enterprise customer-centricity, utilities need to ensure that coordinated, end-to-end systems are in place, underpinned by a supportive organisational culture, and typically complemented by the integration of new technologies.
SA Water has committed to customer-centricity across its operations in the past five years, with General Manager Customer Delivery Kerry Rowlands pointing to a uniform sense of purpose as having been pivotal in the utility’s adoption of the model.
“We have gone from very limited customer engagement through to not making decisions about our future, or even about a new technology we’re deploying, without having customer involvement,” she said.
“It’s been quite a surprising experience because, while we’re knowledgeable in the industry, what our customers want when we talk to them can be quite different. We now have absolute confidence in implementing new initiatives, knowing it’s what our customers want us to do.”
Rowlands said leadership and internal feedback have played an important role in SA Water’s adoption of customer-centricity, with “strong direction required for cultural shift within an organisation”.
“The challenge is ensuring that you have the right culture in your organisation – and with a large organisation like ours, it’s ensuring your policies and procedures and measures of success drive behaviour,” she said.
“You’ve got to have all of those things aligned to customer outcomes, and that’s when you really start seeing the difference.”
Sydney Water Customer Hub Manager Darren Cash also pointed to cultural change as being an important issue for utilities seeking to adopt a more customer-focused approach.
The launch of Sydney Water’s Customer Hub last year marked a significant shift in the utility’s operations, and Cash singled out customer feedback as “one of the key ways to overcome the cultural change challenge”.
“It takes time to get everyone involved with that end-to-end customer process and understanding of what this means to them and how they’d do things differently,” he said.
“One of the key tools that we used for this is real-time customer feedback.
“Whenever we complete a piece of work for a customer, they have the opportunity to provide us with feedback, good or bad, and that feedback is conveyed back to the people actually involved in that task.”
Utilities are engaging with customers in a variety of ways, from community education programs to online surveys, and it is important to establish a robust framework within which to guide this engagement.
Davina McCormick, General Manager Customer Engagement at ACT utility Icon Water, observed that “a range of tools are required to unpack what customers really want or think”.
“Part of this process is framing things for customers so they understand us and we understand them – finding the right metrics and measuring things in a way that addresses the customer’s perspective and impact,” she stated.
“By the same token, we must be careful not to ask simplistic questions on complicated issues. It’s about engaging and educating in a meaningful way that builds customers’ knowledge and capacity to contribute to the decision-making process.”
TasWater Program Manager Price and Service Plan Eamon Sullivan advised that TasWater relied largely upon traditional engagement methods in developing its Long Term Strategic Plan (LTSP), including focus groups and telephone surveys.
The utility’s strategic framework was revised to be customer-focused, which Sullivan described as “critically important” in engaging with customers and prioritising feedback: “We used the outcomes and associated measures of success to have conversations with our customers about what mattered most to them, encompassing trade-offs between outcomes, given we can’t afford to do everything we want to do at once,” he said.
“We then aligned our activities and investment in the LTSP to the outcomes our customers said were most important.”
Utilities need to weigh up customer outcomes and other priorities, including technical and regulatory requirements, in making operational decisions and determining long-term planning objectives.
As part of its 2018-23 regulatory planning, Icon Water set about establishing the service levels it would target, expenditure required and impact on customer bills over time, with market research having identified reliability and price as two main customer priorities.
Katherine Larkings, Icon Water Asset Strategy and Investment Team Leader, explained that the utility carried out targeted research to strike a balance between these priorities, and then engaged the Centre for International Economics to conduct a benefit-cost analysis from a whole-of-community standpoint of a range of network expenditure options.
The analysis found that on average customers did not want an increase in spending to reduce risks of water supply interruptions and sewage overflows, preferring less spending on water mains renewal, leading to reduced bills and a marginal increase in supply interruptions over time.
“The survey work and technical work needs to be rigorous, and care needs to be taken that an individual impact to a customer is considered, along with impacts to the broader customer base,” Larkings said.
“We know through research that people tend to undervalue essential services until they are no longer provided, so requesting preference information from customers who have never had an interruption is fraught.”
Sullivan said TasWater engaged consultancy Jacobs to develop a capital prioritisation model to inform its LTSP, employing “linear optimisation to achieve the best set of outcomes for customers within a price constraint”.
He advised that under the model relative weightings were assigned to each customer outcome, and projects that had a higher outcome for a lower cost were prioritised.
“Each of our capital projects has an associated cost and a benefit, such as how much it contributes to achieving one or more customer outcomes, as defined by the associated measure of success,” Sullivan explained.
“The model then calculated an optimal set of outcomes for customers within the price constraint, such as achieving the greatest outcomes based on what customers are willing to pay.”
A priority for Sydney Water is to minimise potential customer impact on a daily basis, and the utility’s Customer Hub allows it to actively monitor the configuration of its network.
“Often we’ll pick up areas where we can change the design of the network to improve resilience, and therefore reduce the number of people that we affect, but also feeding into renewal strategies for a particular pipe,” he said.
“Feeding that customer impact into the renewals thinking is a real change from being asset-centric to being more customer-centric.”
Rowlands also pointed to an increasing capability to actively pursue customer outcomes, with SA Water making “decisions across the organisation with the customer outcome in mind”.
“I think that probably what we need to do as utilities is challenge ourselves around who is the customer,” she said.
“Previously we’ve viewed the customer as the person paying the bill, but they’re so much more than that, they are all consumers of our products and services, through to commuters potentially being impacted by our infrastructures works.
“We need to make it as easy as possible for them.”
First published in Current magazine October 2018.