The Institute of Customer Service recently published its biannual UK Customer Satisfaction Index (UKCSI) results, placing customer satisfaction in the UK at 0.8 percentage points lower than last year and at its lowest level since July 2015.
The survey reviews customer satisfaction across 13 industry sectors and the following dimensions: experience; complaint handling; customer ethos; emotional connection; and ethics. It found that customer satisfaction in the water sector had fallen less – 0.7 points year on year – than the average and had, in fact, increased since the last published index in July 2019 – one of only four sectors for which this was the case.
The UKCSI results indicate the closing gap between water companies and other sectors. There are some real highlights, such as Dwr Cymru Welsh Water becoming the first water company to ever appear in the UKCSI top 50 organisations, and Northumbrian Water and Scottish Water also scoring above the UK all-sector average score.
Look beyond the headline figures, and there are also some interesting findings for the sector to consider as we enter AMP7, the 2020-25 asset management plan period.
A new wave of customers
A deeper look at the results by age group highlights the challenge facing UK companies in satisfying younger customers, with the 18-24 age group recording the lowest all-sector average score by some stretch. For the water sector, the customer satisfaction gap – compared with the all-sector average – was at its widest for the so-called Generation Z than in any other age band.
So, while all sectors face the challenge of winning over Generation Z, the water sector has more work to do than some to close the gap. Many of those that make up Generation Z are either not yet bill payers, and may therefore judge their water company based on public reputation and hearsay, or are in the early stages of being bill payers.
There are many assumptions made about this generation, their service expectations and priorities, and the results of the UKCSI are interesting as we conduct our own research, in Q1 2020, into Generation Z and their attitudes and preferences to water, alongside their experiences with the UK’s water companies.
Emotion, ethos and ethics: a closing gap
The water sector is also starting to close the gap on the three dimensions of the index where it has previously struggled most – ethics, ethos, and emotional connection. While the all-sector scores for these three measures all fell in the six months since the last published index, water bucked the trend and achieved increased scores across the board.
This is encouraging, given the focus placed on reputation, transparency and building relationships within the water companies’ forward-looking five-year business plans. Clearly, there is a lot of work still to do, and it’s likely that the new C-MEX customer experience survey will support the continued drive for improvement, but the index results do highlight a step in the right direction.
While the water sector continues to outperform the all-sector average scores when it comes to complaint handling, with six of the eight companies featured receiving a score higher than the average, the latest results should raise a note of caution for the sector.
Figures from the index highlight that, while UK complaint handling scores have fallen overall, the drop in water sector scores has been more pronounced, pointing to the water sector perhaps struggling to sustain its strong performance in this area, with customers not as satisfied with how water companies handle complaints as they once were.
Digging a little deeper, customers perceive that water companies are very good at signposting what will happen next following a complaint, and how long it will take to resolve, yet however they express that resolution is not always quick enough and that the outcome is not always satisfactory.
While effective complaint handling is clearly important, first-time resolution of customer enquiries and issues must be the priority to deliver the service customers increasingly expect and, in doing so, prevent more complaints from arising in the first place.
As water companies carefully consider Ofwat’s final determination on their business plans for AMP7, the latest UKCSI does remain an important barometer of customers’ perceptions of the transactional and relationship aspects of their experiences with the sector, and offers some interesting insight on strengths, weaknesses and opportunities.
However, there is always an underlying danger in digging too deeply into individual statistics and metrics, and analysing them in isolation. What remains important is that, as a sector, we focus on serving customers in the ways they expect and want, making it as easy and convenient for them as we can.
Monica Mackintosh, managing director, Echo Managed Services