Utility Week

Finance & Investment 22 | 27TH OCTOBER - 2ND NOVEMBER 2017 | UTILITY WEEK Market view C ustomer engagement is the hot topic in the world of water right now. Customer service reports continue to highlight poor performance, and Ofwat regulation in the form of PR19 clearly sets out that more needs to be done. But far from being worried, we should be optimistic for providers and excited for cus- tomers about the changes that are about to take place. Why? Because we have been working with a number of water and utility compa- nies to leverage artificial intelligence (AI), in the form of chatbots via messenger platform technology (Facebook messenger, Whats App and the like), and the benefits to both cus- tomers and businesses are huge. The right time for change The Institute of Customer Service's bian- nual UK Customer Satisfaction Index ranked water and energy companies as among the lowest performing sectors when it comes to customer service in its July 2017 report. Of the 13 sectors included, water and energy performed only marginally better than trans- port and the telecommunications and media sector, despite an improvement in service of 5.7 points since July 2014, the biggest improvement of all the sectors. Ofwat's latest outcomes-focused price review – PR19 – echoes this sentiment. Covering the price, ser- vice and investment changes water com- panies need to deliver from 2020 to 2025, the review aims to chal- lenge water companies in England and Wales to develop in four key areas: • First, great customer service. Ofwat has made it clear that providers need to do more for their customers, and encour- age them to become active participants in decisions relating to future plans and strategies. They also need to deliver better customer services – setting new stand- ards and learning from the best examples of other industries in order to deliver an improved experience. • Second, resilience. Ofwat wants compa- nies to consider operational, financial and corporate resilience, thinking about the long-term future as well as the next five years and ensuring common stand- ards are implemented. • The third area of focus is affordability. Ofwat's push is for providers to deliver affordable bills for all, both now and into the future, doing more to help vulner- able customers, those in difficult circum- stances and to reduce bad debts. • The final measure is innovation, finding new ways to work, exploring new mar- kets. Ofwat says there will be payment for results delivered against this outcome, with rewards for those companies that not just improve efficiency and resilience but which set new standards for customer service and cost efficiency. While there has been a fair amount of com- mentary that raising standards will be a real "challenge" for water companies, what we are about to see is a real revolution in terms of customer communications from water companies, not just bringing them into line with other industries, but leading the charge for better business. The PR19 framework positively promotes the need for greater digital communications, and this is the key to successful change for the water industry. New technology solving old problems Chatbots, which use technology to enable a conversation through online messaging plat- forms such as Facebook messenger, are not just a hot new social media trend – they offer a real and credible solution for water com- panies to customer engagement, with addi- tional benefits that will help providers meet other PR19 requirements too. Available on a platform that many cus- tomers (especially millennials and centen- nials who are now becoming customers in their own right as they come of working age and take on their own homes), know and enjoy using, chatbots offer 24-hour access. Using AI, they can have a conversation with a customer and through every question asked and answer given they get smarter. Chatbots can be personalised to fit certain needs, such as dealing with customer ser- vice issues or engaging with customers to get direct feedback. Customer service When it comes to customer service, a chat- bot has a number of advantages. It offers a real-time conversation at any time of day or night, enabling customers to benefit from getting responses at a time that is convenient to them, not just during office hours. What is more, there is no need for providers to make customer service agents available round the clock, at considerable additional expense. While critics will argue that they can- not answer everything, they will be able to deal with common queries quickly and efficiently, and where a human touch is needed for full resolution of the case, the details of what the customer's issue is will have been captured, enabling a swi resolution – and without the need for the customer to repeat their prob- lem to new members of staff. It's good to chat Artificial intelligence offers water companies a cost-effective way of boosting customer engagement – one of the key demands of PR19 – through the deployment of chatbots. Paul Shepherd writes. "When it comes to customer service, a chatbot offers a real-time conversation at any time of day or night, enabling customers to get responses at a time that is convenient to them, not just during office hours."

• Cover