Water & Wastewater Treatment Magazine
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Implementing service improvements The Talk: opinion T he water industry has faced increased regulatory pressures in re- cent years, with the value provided to customers being at the forefront of Ofwat's concerns. While the intent of this regulatory intervention is good for con- sumers, it puts further pressure on a com- pany's bottom line at a time that greater investment is also required in infrastruc- ture, operational delivery and environ- mental protection. This leaves businesses to explore the areas where they may be able to create greater efficiency. Looking at customer service may seem counter intuitive, especially with Ofwat making this a core focus in its PR19 deter- minations, but it is possible to strategically reduce cost to serve without compromising the quality of provision. In fact, by investing in better service, firms will benefit from ef- ficiency gains at the same time as delivering better customer outcomes. Defining cost to serve Total cost to serve relates to how much a business spends servicing a customer per annum. To help keep this figure as low as possible, businesses must understand how different customers impact their bottom line and be able to identify the groups that need further nurturing. This exercise will allow water companies to weed out and improve functions within the customer service department that are not operating in the most effective way pos- sible, allowing them to focus on improving the operational processes and policies that are most critical to providing first class customer service. The high cost of badly managed complaints Complaints handling is one area that, when done badly, can have a major impact on a firm's costs. With customers more likely to contact providers during challenging periods, for example in the event of a wide-scale service interruption, the root cause is found, the process is completed by finding a solution to correct or eliminate that issue and therefore prevent future occurrences. To help ensure they en- gage in effective root cause analysis (RCA), firms should focus on: l Identifying and rectifying root causes rather than focusing on symptoms l Becoming more strategic in their ap- proach to RCA versus adopting a tactical approach l Using data more effectively to prioritise RCA activity and improve root cause identification. Adopt a multichannel approach Our Complaints Outlook 2019 report found that 97 per cent of the dissatisfac- tion felt by utilities customers was due to their issue not being resolved fast enough. By adopting a multichannel approach, frontline staff can make prompt decisions at the same time as enabling a smoother experience for customers contacting them across different channels and potentially via different teams. This will have a sig- nificant impact when it comes to ongoing cost savings as it reduces the frequency and duration of customer engagements. Quicker resolution of complaints There are various ways for water busi- nesses to improve their speed of response, including a greater focus on: l First point of contact (FPOC) – Our data shows that 78 per cent of customers expect their complaint to be resolved "immediately", however just 12 per cent feel like this is actually happening. By empowering and equipping customer service staff to provide a solution on the spot, wherever possible, businesses will be able to increase their FPOC rate and reduce their cost to serve. l Training – Having a team with the right specialist knowledge will allow utility businesses to cut down on customer ser- vice times and increase customer experi- ence, but they must be willing to invest in the right training. In times of heightened activity, external resource can also help firms to augment or upskill their internal customer service staff, helping them to assume multiple roles in the business should an issue arise. Through strategic cost management, firms can ensure they stay competitive in an increasing challenging marketplace. This means concentrating on implementing service improvements that reduce their cost to serve, without negatively impacting the level and quality of their customer service. Alex Prentice, sector lead for utilities at Huntswood, discusses how water businesses can reduce their cost to serve in a changing landscape. firms must ensure they are resilient and have the right level of resource in place to deal with a spike in complaints. The now infamous "Beast from the East" is a good example of this. Causing countrywide disruption, the water regulator Ofwat found that multiple failings by UK water companies le™ 200,000 households in England and Wales cut off, some for several days. With extreme weather events becoming a more regular occurrence, firms should be preparing now and looking at ways to assist in delivering both fast and customer-centric resolutions. Those that do this are much more likely to reach a faster resolution with customers and reduce the ongoing customer care costs associated with open complaints. Firms might wish to consider the possibility of bringing on flexible, scalable resources that can be used in periods where a high volume of enquiries can be predicted. Strategically reducing cost to serve When looking to reduce cost to serve, the first step utility firms should take is to re- view the impact of their current processes and policies. What are the bottlenecks? Which groups of customers are costing more to deal with? Are there parts of the customer complaints process that are causing more issues than others? What is the knock-on effect in terms of headcount and infrastructure? The list goes on. Key areas for consideration include: Proactively eliminating issues Firms that prevent issues from arising will not face the associated costs that come with high levels of complaints, redress and possibly regulatory intervention. In fact, the process of mitigating complaints risk is very much in firms' commercial interest. Root cause analysis (RCA) helps firms to identify the underlying reasons (or root cause) of a specific problem or event. Once 18 | APRIL 2020 | WWT | www.wwtonline.co.uk CUSTOMER EXPERIENCE