Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/514326
24 | 22ND - 28TH MAY 2015 | UTILITY WEEK Research Customers do so today – with an overall average of 4.70 out of 5. Wessex has maintained its position by making investments and improvements in its strategy and technical ability, but most importantly, in its employees and company culture. Most improved: these companies have been low performers in the past but have begun to turn around their performance. These are companies to watch out for. Yorkshire Water has shown considerable improvement in its scores, with the overall average increasing from 4.47 in 2012/13 to 4.62 in 2014, bringing it in line with North- umbrian and Wessex Water. Areas of nota- ble improvement include a 0.26 point rise in investing to keep its customers informed and an additional increase of 0.6 point improve- ment in time taken to resolve queries and satisfaction with visits. What are the limitations of SIM? While SIM is widely acknowledged to have driven improvement in the water sector, it also has a number of clear limitations. The data sample for SIM is small – just 200 responses per company per quarter, or 800 per year. The sample size is the same whatever the size of the company, and is entirely random – there is no geographic or demographic profiling. The random nature of the sampling also creates challenges – for example, if a company's customers were surveyed the week aer very heavy rainfall, their scores may be lower because of increased flooding. A bad week, if that's when the survey falls, can drag down the score for a full year. It is becoming clear that there is a repu- tational "halo" effect that SIM does not take into account. A company that has a good brand reputation is likely to see the knock-on effect in its SIM score, with surveyed custom- ers being more "forgiving" than those of a less well-liked brand. The SIM score does not take into account the average bill. A company's customers may have comparatively poor service but be pay- ing considerably less. Under SIM, there is no way to reflect this, nor to allow the custom- ers the choice of how much they want to pay versus what quality of service they want to receive. Data The SIM score can only be as good as the data that feeds into it. The quality of data varies from company to company, as shown by McCallum Layton's annual report on data quality. Although data provided by each WASC does not directly feed into its SIM score, quality of data gathered does have an impact on the SIM. Northumbrian Water has shown an improvement in data quality with the highest number of usable and valid records, stand- ing at 89 per cent. These are the records that are correct and can be used to capture customer feedback. Thames, on the other hand, has the highest number of duplicates in records (21 per cent), which does not nec- essarily imply poor data quality but means additional effort to get the correct number of individuals for the survey. United Utilities has the highest number of untraceable tel- ephone numbers, at 18 per cent (an increase from 10 per cent in 2012-13). Net promoter score was until recently a widely accepted measure of how success- ful a company was in terms of brand value and satisfaction. However, recently a new measure – customer effort score (CES) – has emerged. This looks at customer experience from four perspectives of cognitive (think- ing effort), emotion (emotional effort and distress), physical and time taken (versus expectations). According to researchers from the Corporate Executive Board (CEB), the more effort a customer has to make in each of these areas, the less likely they are to bother. For more information on CES, visit: http:// bit.ly/1A4IfFf What is the future of SIM? Ofwat has acknowledged the need for SIM to evolve, with a number of changes being introduced to the measure this spring. The SIM survey has been relaunched in a new, shorter format. There will be ten ques- tions asked per quarter and an additional ten, on demographics, asked once a year. The survey will focus on two significant questions – overall what did the company do well; and what could it do better, while dealing with a customer complaint. In addi- tion the focus is on five key areas: how the customer contacted the water company; rea- sons for contact; satisfaction with the com- pany on overall complaint handling; areas of dissatisfaction; and how the company could improve. Finally, their customer experience in the water sector will be compared to that of another sector. The weighting that was previously 50:50 will now stand at 75 per cent qualitative and 25 per cent quantitative. Financial incentives will be awarded in 2019, based on data col- lected over 2015-16 and 2018/19. In addition to the survey, Ofwat has incor- porated basic changes to how and when the data will be collected. Customers will be sur- veyed based on contacts received from the water company, regardless if they have been resolved or not. The regulator will request contacts from companies on any given Mon- day, for data from the previous seven days. FIGURE 2: WASCs' IMPROVED PERFORMANCE Wessex Anglian NWL Yorkshire Severn Trent United Utilities South West Southern Water Thames 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 n 2012/13 n 2013/14 Informationi source: McCallum Layton Wessex Water United Utilities Improved performance Overall laggards Overall leaders Steady performance Southern Water Yorkshire Water South West Water Thames Water Northumbrian Water Anglian Water