The personal touch is crucial for consumers, says Alan Newman, Enterprise Manager, Utilities, Quadient.
The ongoing cost-of-living crisis has put more pressure on companies to improve customer experience as consumers are more conscious of where they spend money.
Water companies face a unique challenge as customers can’t vote with their feet if service is bad.
However, in February Ofwat introduced new powers to fine water companies for poor customer service to help combat too many instances of consumers being let down.
However, historically water companies struggle to connect with customers. Water providers need to dramatically transform how they communicate with customers.
Without this change water companies will struggle to address their key challenges: low digital adoption amongst customers, slow smart meter rollouts, and reduced water consumption.
The environmental and economic need for smart water meters gives water companies an opportunity to turn the tide on poor CX. But if they continue sending blanket communications, they won’t be able to achieve their key goals.
Muddying the waters of CX
Utilities is a challenging sector to surprise and delight customers as it’s seen as purely transactional. But the industry hasn’t helped improve this perception.
The Institute of Customer Service found that utilities were the lowest rated sector for customer satisfaction in January 2024, with water companies down by 4.1 points. Ofwat also reported a fall in customer satisfaction across most companies in 2022-23.
Customer experience is suffering because water companies are struggling to communicate thoughtfully with consumers. For example, advice on cutting consumption is mixed into general marketing emails. These get lost or left unopened because the messaging is too generic and not specific to the individual.
A prime example of how water companies are failing to communicate effectively is smart meter roll outs. Smart meters are vital to reduce environmental impact and bills, but the way they’ve been communicated to consumers has caused a lot of distrust.
We first saw this with energy companies, as many believe smart energy meters only benefit the company not the customer. Energy companies have failed to meet their smart meter targets, and water companies are at risk of going the same way.
The impact of low smart meter adoption is a vicious cycle. Without the ability to collect vital data using smart meters, water companies will never truly get to know their customers.
Filtering out one-size-fits-all messaging
Water providers need to re-examine how they communicate with customers. Take smart meters, it’s not enough to send out blanket messaging on the benefits as everyone’s motivations are different. Companies need to use customer data, like consumption, to understand why a customer could be convinced to install a smart meter. Younger generations might be motivated by environmental impact and others may want to cut down their bills.
The only way to understand motivation is to segment customers by persona. Water companies can then understand what type of communication, over what channel, will work best for that individual.
Providers will see more engagement when every piece of communication is highly personalised and relevant. Water companies can use this data to create customer journey maps to track how individuals react and then tweak and refine their messaging.
Water companies should also be using the data from meters themselves to improve CX. With more information about water usage, providers can personalise communication with advice on how to change habits or be more efficient.
Water companies are in a unique position to use data collected from customers to influence consumption, and so reduce costs and environmental impact. But if they don’t use this to their advantage then their communications will never resonate with customers, no matter how important it may be.
The watershed moment
Improving customer experience can’t stop once the smart meter is installed. Utilities need to leverage customer data across the entire customer journey. Every interaction and touchpoint from billing to service appointments should be an opportunity to better understand customers and optimise the experience.
Without this comprehensive, data-guided approach to CX, water companies will continue fail to communicate effectively with customers. Those that continue with outdated, blanket messaging will ultimately fail in achieving their key objectives. Those that take a smarter, more personal approach will be better positioned for long-term success.
