Invest in Customer Service and Customers Will Invest in Their Utility

By: Bill Eller January 28, 2019

It’s time to embrace the future of water infrastructure – and the foundation of that future is customer service.

Over the next 25 years, more than $1 trillion will need to be invested in American water infrastructure to continue to meet current levels of service – and most of that money will likely come through rate increases to customers. Approximately 85 percent of Americans are served by a public utility, which means rates are artificially low – and consumption is dropping as more people adopt water efficiency practices.

mother_daughter_sinkA JD Power report found that nearly one-third of customers report water quality issues, including low pressure (12 percent), bad taste (11 percent), scaling or hardness (8 percent), discoloration (8 percent), bad smell (6 percent) and high lead or mineral content (4 percent). To address these delivery issues, utilities will need to make investments in their infrastructure … but they’ll need to raise rates to do that.

Caught between aging infrastructure and decreasing revenue, water utilities will need to increase their rates. So how best to prepare customers and reduce unhappiness? Focus on customer service now.

Water utilities understand the need for an increased focus – 91 percent report that it’s either above average importance or extremely important to improve customer service.

Increased customer satisfaction will help build support for rate increases, and some methods that improve CSAT, such as regular communications and water quality reports, also will help customers better understand utilities’ value. In addition, increasing customer satisfaction also increases collection ratio and decreases payment time.

Clear, consistent and regular communications can make the difference between a good and bad customer experience – just regularly communicating with customers can result in higher scores. JD Power found that customers who remembered having at least four prior communications from their water provider had a satisfaction score that was 148 points higher on a 1,000 point scale – a nearly 15 percent increase – over those who had no communications at all.

When customers experienced a pipeline work-related service interruption, satisfaction dropped by 42 points, or more than 4 percent. However, when the utility communicated that the interruption would occur prior to the service outage, satisfaction rose 58 points over those who hadn’t had a service interruption at all, proving the power of communication.

Studies have shown that customers who receive a water quality report, regardless of the information within the report, reported significantly higher satisfaction than those who didn’t receive a report.  

In this digital age, more customers want easier access to their bill and other pertinent information, and the customers of the future are Millennials, who are digital natives and simply expect the information they want to be at their fingertips. Digital engagement isn’t just trendy – it can increase customer satisfaction by more than 25 percent.

One of the most important pieces of communication a customer will receive from a utility is their bill, and it should be presented in a way that is easy to understand and include visuals. Make the data relatable – customers understand measurement in gallons, so show them how many gallons they are using and where they are using them. Chart their use over the course of a year or a season, so they can understand their usage habits and patterns. Here, too, is an opportunity to go digital, because customers who are billed by email reported significantly higher satisfaction than those who received paper bills. Taking a step further, an app can combine digital outreach and communications by doing a wealth of things from alerting a customer that they’ll be receiving their bill soon to providing conservation tips to showing how their use stacks up against a similar household.

Utilities also are examining increasing their service offerings to increase customer service and revenue, with 48 percent of those water utilities surveyed being either interested or extremely interested in expanding services. Possibilities included bottled or bulk water, ice, antenna leases on water towers, service line protection programs, laboratory services, and they can be offered to residential and business customers and other utilities.

When considering service line programs, the NLC Service Line Warranty Program is the only one endorsed by the National League of Cities and is a completely turnkey operation. The program has a nationwide network of contractors and call centers available 24 hours a day, every day of the year.

Water utilities are open to the idea of service line programs, with nearly 20 percent having already implemented such a program, nearly 30 percent interested in doing so and more than 50 percent receptive to the concept. Choosing the right affinity partner to explore this field – only second to bulk water delivery in interest – also can help increase customer satisfaction.

Building the customer satisfaction capital to raise rates without an uproar will take time, and many of our systems don’t have much time left. Contact us to learn more about how the NLC Service Line Warranty Program can help increase customer satisfaction and peace of mind.