Water companies must increase their focus on customers and become “truly customer-centric”, Ofwat chief executive Rachel Fletcher has insisted.

She said although companies claim to be customer-focussed, this is not necessarily the reality.

“The foundation stone for any customer-focused company involves understanding your customers and how they experience the service you provide,” she said.

Speaking at the Future of Utilities: Water 2018 conference, she added that, on this front, there has been a step change in the water sector. “To develop the PR19 business plans companies have engaged with over 1.5 million customers using a wide range of techniques and media.

“The challenge now is to keep this understanding up to date and bring it into the business to drive a wide range of decisions. I am pleased that some – but not all – companies are putting this in place.”

She said the next step was for companies to create a “granular understanding” of customers. “This allows companies to be better at anticipating the needs of specific groups of customers and to be more targeted in delivering service and support.

“I’m pleased to say that some water companies are making strides in building this picture – even at a sub-postcode level,” she said. “Some are doing well to form partnerships with local authorities and charities to build a richer understanding of the communities they serve.”

However, she added, the sector still has “some way to go”.

“Despite the ambitions we see in the PR19 business plans, we know that the water companies will have identified fewer vulnerable customers than energy counterparts by the end of the next price control. So building a more granular and rich understanding of your customers deserves more attention.”

Fletcher insisted that, for a water company to be truly customer-focused, the emphasis on the customer must “permeate the entire business”, going “beyond the work of the customer service team”.

She also said companies must have a culture which doesn’t simply focus on “complying with regulations”.

“In PR19, there will be a new customer experience incentive, C-Mex,” she said. “Companies that do well will be those that go beyond thinking about customer service and complaints handling and consider how every aspect of their service impacts their customers. I’m looking forward to seeing the improvements this new incentive drives.”