The Institute of Customer Service (ICS) welcomes the opportunity to respond to Ofwat’s consultation on strengthening protections for customers in the Business Retail Market. Given the remit of the Institute, which is to assist the UK economy, consumers, business customers, and employees by helping organisations to improve their customer experience for the benefit of both organisations and their customers, our response will be grouped thematically in order to respond to this consultation.
The Institute’s starting point regarding Chapter 8 on Customer Service is that customer service, and indeed service excellence requires more than transparency about a company’s complaints process or procedure or reducing the number of complaints an organisation receives as an isolated key performance indicator. We note and appreciate that Ofwat has just this week taken some steps to encourage water companies to resolve complaints, facing fines of up to 10% if they do not. This is a positive step, but there is a lot more to be done to achieve service excellence.
Service excellence is about getting things right first time, understanding the range of customer objectives, needs and priorities, preferred methods for interacting with organisations and clear, relevant and transparent communication. Service excellence is based on a positive, proactive culture that affects decision-making, relationships and action across the organisation.
Our response covers three main themes, as below:
- Measuring customer service performance to drive service excellence
- Achieving service excellence through the right organisational culture
- Helping to support customers in emergency situations
1. Measuring customer service performance to drive service excellence
A key point is that the Institute is keen to work with Ofwat to ensure that water companies that deliver service to business customers independently measure and benchmark their customer service performance. We believe this is critical to ensuring customer satisfaction and customer experience is measured across regulated sectors, as well as giving the ability to benchmark against other sectors. A consistent, independent approach to measurement enables the opportunity to benchmark performance and focus on improvement in key areas that are important to business customers.
The Institute has worked previously with the UK Regulators’ Network on a Performance Scorecard Initiative in the consumer market, which gave transparency to customer service performance in the sector. The Institute is keen to continue working with Ofwat to ensure water companies are appropriately measuring their customer service, focussing on customer outcomes, and ensuring companies are focused on service excellence. To achieve this, it is important that a benchmarking initiative is undertaken periodically.
With the recent launch of the January 2024 UK Customer Satisfaction Index (UKCSI) showing average customer satisfaction has declined again and is at its lowest level since 2015, a focus on improving standards of service is needed. The role of Ofwat is therefore critical in ensuring water companies focus on improving customer service for business customers, as well as for consumers.
The Institute would welcome further discussion with Ofwat on utilising the UKCSI to help and support such an initiative for both personal consumers but also the business retail market, where appropriate.
2. Achieving service excellence through the right organisational culture
Service excellence doesn’t just come from those on the front-line of companies, nor from the call centre colleagues or those manning desks and responding to inbound customer inquiries. Service excellence is achieved through ensuring that the entire organisation is focused on customer satisfaction, outcomes and delivering the best quality service with a ‘right first time’ approach. Therefore, water companies should focus more on cultural aspects of organisations, and Ofwat should help to drive and encourage this focus.
Many regulators recognise that higher standards of customer service require a cultural shift, so regulators need to consider how they find credible evidence of an organisation’s culture. Organisational culture is founded on leadership commitment, purpose and values, a clear customer proposition, and proactive engagement with customers, employees, suppliers, and stakeholders. Water companies will be no different. Organisational culture shapes the ability to understand and respond to changes in customer needs and behaviours. It helps manage change, focus on short- and long-term priorities, and make decisions that balance the needs of all stakeholders. The Institute’s ServiceMark accreditation provides a framework for developing this.
ServiceMark accreditation is based on a combination of customer feedback, employee feedback and an independent assessment. It gives evidence of an organisation’s commitment to and achievement in customer service. As such, we would maintain that ServiceMark accreditation be undertaken by regulated companies in the water sector, supported by Ofwat. This is not only to demonstrate commitment to high levels of customer service and a culture that supports and encourages high levels of customer service standards, but also to allow some organisations to improve their customer service standards to the point where they reduce negative feedback from customers as far as possible.
This, in turn, will build trust between water companies and their customers at a time when trust between consumers, both personal and business, and the companies they receive services from, is more critical than ever.
3. Helping support customers in emergency situations
The Institute agrees that the definition of a “sensitive customer” should be fully and clearly defined by Ofwat and understood and acknowledged by water companies. In the instance of an emergency or unplanned event, it is indeed critical that wholesalers are aware of the effects and impact of such an event on customers, particularly “sensitive customers.”
It is also vital that the preferred channels of communication are used for those “sensitive customers” and that wholesalers have adequate information on such “sensitive customers” to ensure that communication with those customers can be actioned using the right channels in clear, easy to understand language, with as much detail as possible regarding any potential time that customers might be without water. Communicating clearly and promptly with customers in emergency situations or in the situation of unplanned events is key to ensuring continued trust between the customer and their water company.
The Institute would be pleased to feed into Ofwat on definitions and ways of communicating clearly with “sensitive customers.”
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