september 2018 version 1 - southern water · sws wsh swt tms anh nwt svt yky nes wsx cbg hpl afw...

September 2018

Version 1.0

Navigation: TA 09.1 – Delivering Great Customer

Service

Purpose:The purpose of this technical annex is to set out the summary of research and analysis conducted to support Chapter 9 -Great Customer Service. In this document we set out the approach we have taken to designing our customer-led strategy and what it means for our customers. In particular, we consider who are customers are and what their needs are. We identify the customer experience that we want to create, and the capabilities we need to deliver that experience.

The table below summarises the Ofwat tests that are addressed by the evidence presented in this Annex.

Ref Ofwat test Comment

Primary Focus Areas

No Primary focus areas

Secondary Focus Areas

EC1 Customer-engagement

Purpose of this technical annex

The purpose of this technical annex is to set out the summary of research and analysis

conducted to support Chapter 9 - Great Customer Service.

In this document we set out the approach we have taken to designing our customer-led

strategy and what it means for our customers.

We have considered the following in developing our approach to AMP7:

Who are our customers?

What are their needs and how can we address these needs?

What is the customer experience we want to create?

What capabilities do we need to deliver that experience?

Contents

4

Section Pg #

Summary 4

Background and context 6

Our approach 13

Customers – Understanding who our customers are. 15

Experience – Understanding the experience our customers expect. 28

Offering – Understanding and developing the products and services our customers want. 42

Channel – Understanding the channels our customers want. 64

Capabilities – Developing the capabilities required for implementation and delivery. 69

Appendix 78

Examples of innovative business models cross sector 79

Customer personas 83

Glossary 85

Summary

6

Developing our approach to delivering a refreshingly easy customer experience

Our approach entails understanding who our customers are and the experience they expect, and matching our

offering and channels to their needs.

In order to develop our approach to AMP7, we have:

Understood our past performance

We have analysed our past performance to understand the areas we need to focus on in AMP7. This also entails

understanding the root cause behind our poor performance in the metrics we set out in PR14, such as SIM and written

complaints.

Understood who our customers are and their needs

We have segmented our bill-paying customers into 6 different ‘personas’ with their own needs and expectations, and

have also conducted research to understand the profiles and needs of developers and retailers.

We have also sought insight from surveys, interviews and cross-sector best practice to understand how our customer

needs are changing, and how we can best tailor our service to meet their needs.

Developed propositions which understand the needs and requirements of our customer segmentation through

the channels they expect

We have developed 5 propositions which will allow us to deliver a refreshingly easy customer experience. We have done

this by developing a long list of initiatives based on customer insight and cross-sector review, and conducting cost-

benefit analysis as well as several rounds of customer testing and co-creation

Developed the necessary capabilities to deliver that experience

We have undergone internal review to understand the capabilities required to deliver on our 5 propositions.

Other customer groups PCsHousehold Customer Service PCs

Background and contextWe have analysed our historic performance to understand the areas we need to focus on to

deliver a refreshingly easy customer experience

Our performance in our customer service metrics has been poor, albeit improving, during AMP6. Analysis of this performance has allowed us to identify the areas we need to focus on during AMP7.

8

Service Incentive

Mechanism (SIM)ComplaintsUKCSI Wholesaler scores

Service measures

for developers

Here we have addressed key industry service metrics to assess our performance in the market. We have

assessed our performance commitments in more detail in Chapter 17 – Accounting for Past Delivery.

Customer experience goes beyond retail - we need to

embed a culture that is customer led and driven by

customer insight

We have focused on customer service for our customers

exclusively in retail services

Focused on our immediate bill payersRecognise we need to expand our focus to everyone we

interact with through our operations

AMP6 Approach Lessons Learnt

SIM and UKCSI

9

• In 2017, We are the second lowest performing water company in relation to SIM and UKCSI scores with a score of 78 and 73

respectively relative to sector averages of 84 and 77.

• The best performing company in the water sector had a SIM score of 88 and UKCSI score of 82. The top SIM score in the

sector reduced from 90 to 88 points and the top UKCSI score remained flat at 82.

This suggests that Southern Water is making progress towards catching peers in both metrics.

• Outside of the bottom three performers in both metrics, there appears to be no correlation between SIM and UKCSI

performance.

70

72

74

76

78

80

82

84

86

88

90

70

72

74

76

78

80

82

84

86

88

90

NES PRT WSX ANH BRL DVW SBW NWT SEW SSC SVT WSH YKY SWT SES AFW SRN TMS

UK

CS

I S

core

SIM

score

Water sector companies SIM and UKCSI scores, 2016-17

2017 UKCSI 2017 SIM 2017 Average SIM 2017 UKCSI Water Average

Source(s): Ofwat, 2017.

Service Incentive Mechanism (SIM) and UK Customer Service Index (UKCSI)

scores have both improved in 2017 but we still compare adversely

55

60

65

70

75

80

85

UKCSI Score Overall Over The Phone Online (Website/App) In Writing (Letter/Email) Complaint Handling

Score

(out

of 100)

UKCSI Customer Satisfaction metrics*, 2016/17

UK all-sector average Utilities Water Southern Water

UKCSI

10

• We score lower in all Customer Satisfaction metrics except complaint handling. Furthermore, SWS scores lower

in every criteria that contributes to the Customer Satisfaction components in which they underperform.

• The water sector underperforms against UKCSI all-sector average. This is of importance as Ofwat (dis)incentives

for CX will be administered based on benchmarking against the UKCSI all-sector index.

• Importantly, the water sector outperformance of SWS highlights the lower customer satisfaction scores are SWS

specific, not wholly industry related.

Source(s): The Institute of Customer Service, 2017; “UKCSI Utilities Sector Resource Pack”

Our UKCSI score is 6 points below the UK all-sector average and 3 points below

the water sector

ComplaintsOur written complaint volumes are the highest in the sector and are mainly

attributable to billing complaints

11

CCWater received written complaints per 10,000 connections

in 2015/16 and 2016/17

-

10

20

30

40

50

60

70

80

90

SW

S

WS

H

SW

T

TM

S

AN

H

NW

T

SV

T

YK

Y

NE

S

WS

X

CB

G

HP

L

AF

W

ES

W

BR

L

SB

W

SE

S

SS

C

SE

W

PR

T

DV

W

WASC | WOC

Written c

om

pla

ints

per

10k

connections

2015-2016 2016-2017

2015-2016 Avg. 2016-2017 Avg.

Source(s): CC Water, Internal Data

Since 2015/16 we have more than halved the number of written complaints customers have had to make about our service. This reduction has been driven mainly by a significant fall in billing related complaints as we have increased flexibility and personalisation of the billing experience.

Using CCWater’s received written complaints per 10,000 connections as an industry benchmark, our reduction in written complaints was the largest across the water sector. However, while we have worked hard to provide a better experience for customers and reduce the need to complain we appreciate that our 2016/17 performance is still the worst in the industry. We are committed to continue on our improvement trajectory as we further develop the initiatives that have delivered greater customer experience around billing since the start of the AMP.

Our actual and forecast written complaints responded in

AMP6

-

2

4

6

8

10

12

14

16

15/16 16/17 17/18 18/19

Historic Forecast

Write

n c

om

pla

ints

(0)0

s)

Operations Billing

Wholesale service to retailersWe have achieved the second highest score in the industry for wholesale service, but there

is room for improvement

12

6

6.2

6.4

6.6

6.8

7

7.2

7.4

Unite

d U

tilit

ies

So

uth

ern

Wa

ter

We

ssex W

ate

r Y

ork

sh

ire

Yo

rkshir

e W

ate

r

An

glia

n W

ate

r

Nort

hu

mbri

an W

ate

r

So

uth

West

Wa

ter

Se

ve

rn T

ren

t

Th

am

es W

ate

r

Wholesaler score

Average

Overall wholesaler scores, 2017/18

Source(s): Research from Water Retail: Wholesaler’s service to retailers: Water and sewerage companies

We have delivered above industry standards in

providing services to retailers, achieving the second

highest score in the industry

• Our user-friendly portal, introduced in 2017, has

been highly praised for its ease-of-use.

• Together with our other channels of

communication, this has driven our strong

performance in this metric

We proactively engage with our retailers to

understand their needs and requirements, and

where they would like us to improve / change the

service we provide. The issues which been

highlighted in our retailer insight have been:

• Speed of response: We have struggled with a

backlog of work, and managing the workload

coming in from retailers

• Our credit arrangements: We are currently

exploring an alternative solution to our existing

arrangements, which will maintain the current risk

share mechanisms, but equally provide an

affordable alternative for retailers, particularly new

entrants.

Developer service measures

13

70%

75%

80%

85%

90%

95%

100%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

15/16 16/17 17/18Water Sewage UQ Water UQ Sewage

Performance against water and sewerage service measures

Source(s): Water UK

Traditionally, we have not considered developers as direct customers. However, since the start of AMP6, we have

identified developers as a key customer group. Developers have their own specific demands and drivers and historically,

effective and efficient service provision was not prioritised.

To improve the developer experience, we have:

• Insourced c.60% of our developer services, which has localised services and made them more available

• Established an online portal

• In 2015 we worked with other water providers to develop service measures to evaluate front-end performance against

industry standards.

However, we still have a lot to improve upon:

• Our end-to-end service provision is disjointed

• There is a lack of focus on account management which results in a negative perception of our developer services.

We have improved our developer satisfaction in AMP6 by changing our approach

to developers but there is still a long way to go

Approach

15

1. Customer

Who are our customers?

2. Experience

What type of experience do our customers expect?

3. Offering

What products and services do

customers want?

4. Channel

Which channels do customers want?

5. Capabilities

What capabilities are required for implementation and delivery?

What branding should serve customers needs and expectations?

Key questions that a customer

focused strategy should be able to

articulate…

• Who are our customers?

• What are their needs and how can

we address these needs?

• What is the customer experience

we want to create?

• What capabilities do we need to

deliver that experience?

• How should we organise ourselves

to deliver?

We have considered 5 key elements when developing our customer-led strategy

for AMP7 to deliver a refreshingly easy customer experience

Understanding who our customers are.

16

Our customer and stakeholder groups

17

We have expanded our understanding of customers to encompass a diverse range of

stakeholders, and listened to their needs to deliver a great customer service.

Bill payers are our

household

customers. We

manage their

customer experience

right across the

value chain from our

wholesale services

through to billing and

collections.

Their highest priority

is safe, high quality

water.

They also want us to

help them use water

wisely and ensure

bills are affordable

for all.

We work with

partners across the

South East to

support individuals

and communities,

including charitable

and specialist expert

organisations

When things go

wrong, these

stakeholders feel

problems should be

addressed quickly

and customers kept

informed

Visitors to our region

interact with us

through the services

that we provide such

as our bathing

waters

Our beaches and

bathing waters are

an attraction to our

region and one of

the things that

visitors to the area

value the most.

Our customers of the

future are younger

generations that may

be bill payers in the

future.

They interact with us in

everyday life through

our services and have

insights into how they

might expect to interact

with us based on their

experiences to date

They have a similar

view to bill payers but

they place more

emphasis on the

environment and

global issues

We provide

wholesale water and

wastewater services

to businesses in our

operational area.

We work with a

range of non-

household retailers

in the competitive

market who provide

customer services to

end consumers.

Businesses have

similar priorities to

Bill Payers but place

a greater emphasis

on constant supply

of water and reduced

flooding

We work with

developers to

support them in the

development of new

buildings that require

connections to the

water and sewerage

system.

Developers have a

focus on forward

planning and fast

and efficient delivery

They also want clear

and consistent

charges, clear

communications and

updates on

application progress.

Customers Other key stakeholders

Bill payers

Customer Group Reference TableThis table shows the correspondence between the customer group names referenced in the original

segmentation research and in this technical annex (under “Old Name”) and the group names referenced

in chapter 9 Great Customer Service (under “New Name”).

19

Reference Code Old Name New Name

P1 Eco-passionate Environmentally Engaged

P2 Disengaged Happily Disengaged

P3 Savvy Savers Actively Engaged

P4 Service Seekers Disengaged Savers

P5 Family First Reassurance Seekers

Who are our bill paying customers?

20

a. Analyse customer data and

conduct interviews

Eco-passionate

Savvy savers

Disengaged

Disengaged

savers

Family first

b. Define segments c. Develop personas

We set out to understand who our household customers are, what they need, and created a set of

personas to illustrate common traits between customers that we could use to guide our customer

insight in the future and determine our proposals for improving our customer experience.

Mosaic

data

1:1

interviews

with

customers

See customer segmentation research

document for detailed analysis and

research conducted to develop

customer personas

We have conducted extensive customer research to understand the profiles of our household

customers to better tailor our service to their needs

To understand the correspondence

between the customer segments

referenced here and the segments

referenced in Chapter 9 the Great

Customer Service

Our 5 personas

21

A group of customers who are very environmentally active. They do not hesitate to champion and work towards

environmentally friendly practices within their communities. They tend to show a willingness to pay more for environmentally

friendly products and would make other compromises to help the environment. They have a good level of knowledge of

environmental issues and water saving process and would hold Southern Water and other large organisations accountable for

the natural environment

A group of customers who are comfortable paying their bill and are not particularly motivated by environmental factors. They

focus more on their personal lives and convenience. They are driven by their personal needs and would only care about

projects that benefit them or their physical surroundings

A group of customers who are comfortable with paying their water bill. Some of them are renting their homes, while others are

homeowners. They are financially motivated and try to save money on larger bills like electricity and gas. However, they see

no benefit in changing their behaviour to reduce the water bill as it is often low enough. They would only act if it leads to a

significant reduction to their water bill. They are not concerned with saving water nor the environment. Their main concern is

that water comes out of their tap. They are open to receiving information and supporting projects that would enable them to

have a significant financial benefit

Eco-passionate

(P1

‘Emma’)

Disengaged

savers

(P4 ‘Debbie’)

Disengaged

(P2 ‘Dan’)

A group of customers who are mainly motivated by financial factors. These customers tend to be actively using water saving

products and processes with an eye on financial advantages. They do not necessarily know about what is available and or

what Southern Water can offer but would be interested if economically convenient for them. People who do not have water

meters would not typically try to save water as it would not affect their bill. But they can still be ‘active’ if they show signs of

constantly trying to reduce their bill by other means

Savvy Savers

(P3 ‘Simon’)

Family First

(P5 ‘Fahim’)

Each persona group was validated by qualitative and quantitative data

A group of customers (mainly families) who are environmentally and financially inclined, but do not act on their concerns in

their daily lives. They may use some water saving products and processes out of habit. They are interested in the future of

water provision for their families and would be motivated by projects that benefit their local community

Source(s): Southern Water Persona Insight Report, December 2017

5 customer ‘personas’ emerged from our initial qualitative and quantitative research: Eco-

passionate, disengaged, savvy savers, disengaged savers and family first customers


Eco-PassionateEco-passionate customers are environmentally driven and engaged


Disengaged Disengaged customers are mainly concerned about their personal wellbeing


Savvy SaversSavvy saver customers are financially driven and engaged


Disengaged SaversDisengaged savers are financially motivated by inactive


Family FirstFamily First customers are concerned about the local community and wellbeing of

their family

Developers and Business Customers

Self-lay providers

(SLPs)When customers

contract a developer

or Self-lay

organisation to carry

out the development

of new water main or

sewer

Small Size

developersIndividual customers

who, for example, build

extensions to their

houses

Medium Size

Developers

Large Size

DevelopersNational, provision to

barracks, etc.

New Appointments

and Variations (NAVs)Where a limited company is

appointed by Ofwat to

provide water and/or

sewerage services for a

specific geographic area

Our Developers

28

We have identified five types of developers and their needs, and forecast that the

number of developers will continue to increase in AMP7

Developers have a focus on forward planning and fast and efficient delivery. They also want clear and

consistent charges, clear communications and updates on application progress. Development has

seen a huge increase in the past four years. Since 2014/15, application volumes for development

have more than doubled, to approximately 950 per month.

Our business customers and non-household retailers

29

Our non-household retailers are comprised of business customers and their

individual retailers and we have conducted research to understand their priorities

Retailers

There are 24 retailers in the market,

18 of which are operating in our

region

Business Customers

We have conducted customer

research to understand the

priorities of our non-household

customers. They have

suggested improvements in

our service in the following

areas:

• Verification of supply –

mainly caused by

inaccurate meter readings

• Speed of response

• Inflexible credit

arrangements

• Accuracy of data

• Tariff documents and

structure

We work with a range of non-household retailers in the competitive market who provide customer services to end

consumers. We provide water supply directly to the business customer, which liaises directly with the retailer for

their day-to-day water and wastewater service.

Understanding the experience our customers expect.

30

What experience do our customers expect?

31

a. Developed customer insights

through research

b. Cross sector review of good

practice examples across sectors

c. Identify experience

expectations by customer type

In order to determine the experience that is expected of our company, we have conducted customer research as well as desk

research to gain insight. We have looked outside of our sector at financial services, electricity and gas, networks, telcos and public

sector organisations to better understand what innovative customer experience solutions are being adopted. Bringing together

customer insight, cross sector innovation and a deep understanding of our own performance, we have developed a number of

customer experience expectations mapped to each of our customer personas.

We have conducted extensive research to understand customer experience

expectations and cross-sector best-practice

Developing customer insight through research

Customer Expectations

33

Transparency: seeing the basis of cost

structures, contracts with no hidden

clauses etc.

Simplicity: clear tariffs, so that

customers can understand what they are

getting with a clear single point of contact

Fairness: offering the best deal, best

price and that comes back to not paying

for the infrastructure.

Flexibility: offering a range of channels

and options for client engagement and

interaction

Innovation: responding to customers

and preparing for the future requires an

emphasis on innovation

Responsiveness: the speed of

complaint and query handling will be

critical to successfully complying to PR19

• Research suggests that customer experience is now twice as valuable to an organisation as brand

• 92% of companies now expect to compete on the basis of their customer experience and 72% say

that improving CX is their top priority.

• Customers expect better experiences across markets, including the water retail market. They are not

just interested in receiving useful products and services, but equally in the manner in which they are

delivered.

Source(s): Medallia Research, 2016; “Testing the Waters”, Consumer Council for Water, 2016

What customers want and expect from their water company is changing

Bill-paying customer insightWe have identified the key customer needs and expectations which have been driving

unwanted contact and complaints from bill-paying customers in our organisation

34

* Only classified if directly related to billing clarity. For billing / payment processing we categorised as ‘Other’ or ‘Empowered & Informed’ depending on the nature of the query

Source(s): bmg complaint survey analysis, March 2018

86% of SWS contacts are due to not

meeting customer needs • BMG surveyed 7711 of our customers who

contacted us over August and September 2017.

Of those 7711 customers, 3959 provided

suggestions for improvement and 367 were

classified as complaints.

• We mapped the key customer needs to the 216

suggestions for improvement to identify the key

unmet customer needs or expectations that drove

them to contact SWS.

1. We have performed a cross sector review to

identify what companies are offering their

customers and how they are interacting to

understand good practice for delivery

2. We have made links between customer

experiences and offerings, as well as their

relevance to the water sector and specifically

SWS.

29%

24%19%

14%

8%5%

1%

Empowerment and Informed Speed

Keeping promises Other / Staff

Billing Clarity Personalisation

Complaint Transparency

Customer soundbites – bill payers

35

“I want to be kept up to

date on the progress of

my request”

Customers see helping them to

use water effectively as a bigger

priority [than customer

experience]. They expect SW to

be working in partnership with

them and those that produce

water efficiency products to

ensure that their water usage is

not wasteful

Customers would like

water companies to

make better use of

technology to put them

in touch with usage

“I want the person

I contact to know

my history”

“I want my first point of

contact to take

ownership of my issue

and the response to be

right first time”“I want to contact you through

my channel of choice at the

time of day I require”

Customers expect an

ongoing comprehensive

programme which uses a

range of media to

communicate with

customers about how

they can use water more

wisely

Relatively poor performance in terms of customer service: a

fairly high percentage of customers [81%] state that they would

expect to see an improvement in this area. This is highest

among those aged 55 and above [84%]

“I want Southern Water to be proactive

in identifying my needs and supporting

me”

Customers expect SW to

resolve their problems by

providing good customer

service, however this isn't

their main concern for

investment

Customer service and

communication is seen as

important, but more of a hygiene

factor than a high priority

Sources: Customers’ long-term priorities summary, Southern Water, SW Service Priorities Survey, You Gov, September 2017, A case for company-specific

adjustments at PR19: an exploration of what is unique about Southern Water, EY, August 2017, Project Eau Debrief, Southern Water, October 2016

Complete customer research documents can be found in TA5.4

We have conducted further qualitative research to understand our bill-paying

customer’s needs and expectations

Business customers

36 Source(s): “Testing the Waters”, Consumer Council for Water, 2016

We have identified the top reasons for business customers to contact their water supplier

and perceptions of contact

Developer customer insight

37

We have conducted research into our developers to understand their main priorities: Speed

of response, improved information and guidance, and better communication

Speed of response

Provide better/more information/advice/ answers/guidance

Good communication (internally or externally)

23%

13%

13%

12%

10%

10%

10%

3%

2%

1%

8%

10%

Direct contact details/point of contact

Answer calls/less time on hold

More information/guidance

Better communication (general)

Faster response time

Better website/web services

Better communication methods…

Visit site

Improve staff knowledge

Good customer care (helpful/polite)

Other

Nothing

In order to improve and transform the developer experience, we carried out extensive research on the customer service

experience of developers. The survey shows that speed, accuracy and good communication are the key priorities for our

developer customers. They also told us that our end-to-end service provision can be disjointed, and there was a lack of focus on

account management. These are all areas we plan to focus on in AMP7.

Survey Qs: What would have most impact on how

easy you find the Developer Services team to deal

with?

Source(s):Southern water Developer Services: Customer satisfaction survey, June 2018, bmg resesarch

Top 3 priorities for Developer Services:

45%

28%

36%

Reviewing cross-sector best-practice

Connected Customer

39

01 The Culture of Immediacy Drives Mobile-First Expectations

Smartphones have become ubiquitous for the modern-day customer, especially for millennials, who came of age in a

mobile-first world. This constantly connected lifestyle has created a culture of immediacy in which customers’ definition of

timely interactions means instant. Sixty-four percent of consumers expect companies to respond and interact with

them in real time.

02 Customers Still Value Human Connections in a Tech-Driven World

Despite their affinity for faster and smarter technologies, connected customers still want to be treated as human beings

with unique preferences — not addresses on an email list. In exchange for their loyalty, customers expect to be heard,

understood, and appreciated by companies, like they are when they visit a local shopkeeper. Two-thirds of consumers

say they’re likely to switch brands if they’re treated like a number instead of an individual.

03 New Data-Sharing Attitudes Spark Era of Marketing Personalization

Customers want more intelligent communications from brands. The batch-and-blast method doesn’t work on these

customers. They’ve grown to expect tailored recommendations and offers, and they’re willing to provide trusted brands

with the data that enables such personalized interactions. Sixty-three percent of millennial consumers agree they’re

willing to share data with companies that send personalized offers, discounts and service.

04 Fast, Personal Service Is Directly Linked to Customer Loyalty and Satisfaction

The connected customer wants a smarter customer service experience — one that is both fast and personal. Gone are the

days when customers would settle for extended phone conversations or multiple-day resolutions. Seventy-one percent of

consumers say that customer service provided on any day at any time has an influence on loyalty, and almost as

many (69%) say the same about personalized customer care.

Source(s): (1) Ofgem, 2017. (2) Department of Energy & Climate Change, 2014.

We have developed a view on cross-sector best practice. The ‘Connected

Customer’ is a driving force behind changing x-sector customer expectations (1/2)

Connected Customer

40

05 Information-Savvy Customers Now Control the Marketplace

Recent advances in technology have created an age in which customers are empowered to communicate, research,

browse, and purchase wherever they are and whenever they want. Today’s customers expect companies to quickly

innovate in accordance with their changing preferences — otherwise they’ll simply switch brands. Seventy percent of

consumers agree technology has made it easier than ever to take their business elsewhere.

06 Smarter Use of Customer Information Expands Opportunities for Sales

Connected customers’ desire to not be treated like a number also means they don’t want to be treated like a cog in the

sales machine. Sales organizations must rethink the traditional product-driven sales pitch and focus on leveraging smart

tech and data to become trusted advisors to customers. More than three-quarters of consumers say it’s absolutely

critical or very important to work with a salesperson who is focused on achieving customer needs instead of

making a quick sale.

Source(s): (1) Ofgem, 2017. (2) Department of Energy & Climate Change, 2014.

We have developed a view on cross-sector best practice. The ‘Connected

Customer’ is a driving force behind changing x-sector customer expectations (2/2)

Identifying customer expectations by customer

type

Customer Clustering

42

Source(s): Customer segmentation insight

Our customer ‘personas’ have different motivations, levels of awareness and

engagement

Key Differentiators

43

Eco-passionate

Information on environmental

products/ services and community

engagement

Disengaged

Needs efficiency and convenience

Savvy Savers

Needs water efficiency advice to

reduce bills

Disengaged Savers

Needs information relevant to

them but ultimately a quick and

easy service

Family First

Needs information on local

community initiatives and water

efficiency advice

Customer type Experience expectations

1

2

3

4

5

Developers

Business Customers and

Non-household retailers

6

7

• Needs focus on information on environmental products and services

• Interested in community engagement and schemes

• Interested in water saving tips and advice

• Contact preference: Email, letter/leaflet, phone call, text/app

• Ease in being able to pay bills

• Focus on convenience and speed of resolution

• Contact preference: Email, phone call

• Interested in products and services that will help them to save money e.g. water efficiency advice and

products

• Contact preference: Email, phone call, text/app

• Comfortable with paying bills but will act if significant financial benefit

• Speed and convenience of service

• Contact preference: Email, letter/leaflet, phone call

• Water saving products and services

• Needs focus on information on environmental products and services and community engagement as

they are interested in sustainability for the future

• Contact preference: Email, phone call

• Speedy service

• Strong communications

• To be kept well informed proactively

• To work collaboratively with them on future growth

• Minimise impact of interruptions to supply

• Speedy resolution

• High quality data

• Clear communications and charges

Source: Customer segmentation insight

These clusters expose clear differences in experience expectation which can help

us enhance our customer experience service for all of our customers

Understanding and developing the products and services our customers want.

44

Our process

45

a. Developed long list of

initiatives to deliver experience

based on insight and cross sector

review

b. Evaluated cost/benefit of

initiatives

c. Developed propositions by

grouping initiatives

Based on our review of customer experience across sectors and benchmarking analysis, we developed a long

list of initiatives to improve our customer experience across all customer types. We evaluated the long list to

determine the most cost beneficial initiatives that to implement and those that were aligned to customer needs.

See initiative database for long list of

potential initiatives

Initiatives were evaluated based on

their indicative one off and ongoing

cost of implementation and

indicative customer benefit to take

the long list of initiatives to a

prioritised list.

We developed a long list of initiatives which were grouped into propositions

through customer and cost-benefit evaluation

Conducting horizon-scanning to understand

customer offerings across sectors

Horizon Scan (1/6) - Empowered & InformedCustomers like to be kept in constant contact to feel informed and provided the tools to feel

empowered with the service they are being delivered

47

The water sector utilities fall behind other sectors in keeping

customers empowered and informed with the service they are

being delivered.

Meters are in their infancy and lack the functionality seen in the

wider utilities sector to deliver the examples above.

BMG qualitative feedback highlights many

unwanted contacts are due to customers being

ill-informed, not communicated to or not being

provided the means to take control. This is

reflected by scoring the second lowest in the

utilities sector across ‘open and transparent’,

‘being kept informed’ and ‘ability to interest in

the way you prefer’ (UKCSI, 2017)

1. Employees visiting customers could have

their location tracked by SWS (or a ‘next to

process’) who automatically notify the

customer before their visit providing a more

accurate window of arrival.

A “smart controller” that empowers customers to take control

of their energy plans. It creates a home comfort experience

showing real-time estimates of usage, projected costs and monitor

air quality. Real-time data allows customers to make decisions that

impact their next bill, improve the comfort of their home and allows

EDF energy proactively engage customers.

Uber allow customers to track their taxi allowing real-time

information of their service. This accurately shows how long it

will take to arrive. Also, along with many local taxi companies, they

provide a text when the taxi is on its way, when it is arriving and a

thank you text when the journey is complete.

A central portal that provides status updates and omni-

channel support options such as integrated branch scheduler

and click to talk when customers go through any journey /

transaction. See complaint management system for similar

examples.

Horizon Scan (2/6) - Complaint transparencyProviding customers with transparency and communication throughout the complaints

handling process

48

(1) https://www.scottishpower.co.uk/about-us/performance/complaintsperformance/

Scottish Power implemented a complaint tracker where

customers can log-in and track their complaint. They were the

worst performing for complaints and since this implementation they

have increased the number of complaints resolved from 130k to

160k. This has increased CX, complaint resolution time and

repeated contacts1.

Apple push notifications down a customer's channel of

choice when the status of a complaint is changed, offer omni-

channel support and a complaints tracker like Scottish Power. This

is also the case for any type of service they offer – a notification to

alert the customer of a status change in order, delivery or payment

processing.

Customer complaints are the same across sectors so the

examples should be directly applicable to the water sector.

There is currently no functionality for customers to actively engage

with their complaint outside of telephone or email which both

require employee effort to respond.

SWS do not have a complaint management

system with access for all employees. Capita

and SWS agents have different systems and

access rights internally and there is no

functionality for customers to access anything

themselves or receive update / progress

notifications.

1. Bespoke complaint management systems

are widely available and SAP have a

complaint management system within their

CRM module. This would help SWS

achieve one single view of the customer to

ensure a seamless experience across

service delivery teams.

2. Pushing notifications of status changes to

complaints (or any customer query) or a

notification when it is being worked on will

help keep customers informed and prevent

them contacting multiple times.

Horizon Scan (3/6) - Billing ClarityProviding clear, consistent and understandable communication around billing through the

channel/s of choice for the customer

49

(1) https://www.scottishpower.co.uk/about-us/performance/complaintsperformance/

Southern Water do not have any automated

notification services around billing to their

customers yet. A pilot of 5,000 customers is

being conducted to send a text message before

the bill is due and when the bill has been paid

and a simplified bill project is underway.

1. A pre and post SMS or other channel

notification could be made to customers.

This could help engage customers who

haven’t contacted SWS, thus help with C-

MeX, potentially reduce bad debt, increase

brand awareness and reduce bill shock.

2. If the pilot study goes well, we could offer a

service to metered customers to notify them

by a channel of their choice their usage

during the billing period as a step before

real-time usage.

3. We could use the online portal to provide

simple interactive data on water

consumption and bills.

Notifications around the billing date can be replicated in the water

sector as the billing cycle is the same as the wider utilities sector.

Technology is available in the wider utilities sector to provide

usage (consumption and financial) throughout the month to

monitor the bill, reduce bill shock, reduce unwanted contact and

increase CX – the water sector should look to apply this.

Provide a paper bill with the confusing jargon explained in

relatable terms and graphs. They also show a graphic usage

comparison to previous months. Eg., 1 cubic meter is 1 batch and

3 washing machine loads and 6 showers and 32 toilet flushes and

49 cups of tea and 3 dishwasher loads.

AMEX notify customers via the channel/s of their choice

before and after payments. The notification before is a period

defined by the customer and after is a thank you and confirmation

of successful payment. They offer periodic (period is user defined)

updates of the outstanding balance, to track spend, prevent bill

shock and giving the customer time to raise any queries.

Mobile app provides interactive graphics of real-time usage in

financial and consumption metrics. This user friendly app

allows customers to track spend throughout the month to prevent

bill shock, monitor usage and enables Ovo to proactively engage

with customers. They also break down the electric / gas confusing

jargon into understandable terms.

50

These promises are not directly relatable to the water sector due to

the nature of the product. However, the water sector could provide

guarantees that customer service promises will be kept and hold

themselves accountable by providing the customer with a discount

or a coupon if the promise is not upheld.

Eve mattresses offer free returns and full refund if their

promise isn’t kept. They promise customers guaranteed

satisfaction and offer customers a 100 night try it at home service.

If the customer isn’t satisfied with their product they offer free

returns and a full refund.

STA travel guarantee to provide the cheapest economy class

scheduled flights, tours and accommodation. If they are unable

to beat a genuine quote, they’ll give the customer £1,000 credit

towards their trip.

If a guaranteed delivery isn’t made, customers get their

money back. Royal Mail offer a guaranteed delivery (as opposed

to a delivery range given) and you get your money back if this

promise isn’t kept. You can also track the progress of your delivery

on their website using a unique code.We currently make promises that are often not

met: replying to the customer, processing a

refund, providing information etc.

1. We could provide an incentive scheme to

employees to ensure promises made are

kept. This could also empower employees

to take responsibility and drive first contact

resolutions.

2. We could also provide ourselves with a

disincentive for not delivering on promises,

holding ourselves accountable for promises

made to customers. For example, this could

be a guaranteed month refund if the

promise were not kept.

Horizon Scan (4/6) - Promises deliveredEnsuring promises made to customers are delivered and followed through upon within time

and scope

Horizon Scan (5/6) - SpeedProviding customers with a quick response, through the channel of choice and around the

clock striving to deliver a quick resolution

51

The water sector have some of the shortest customer service

operating hours across industries. The utilities sector is the third

slowest across industries in resolving complaints and fall just

under the sector wide average for ease of getting through over the

phone (UKCSI).

“Contact us whenever you like, day or night. Your query will

always be answered by a real person here in the UK.” This

slogan has made First Direct be rated 2nd in the 2017 UKCSI and

1st in Which? 2017 rankings. They have very clearly state the

phone numbers for customers to call on their website, do not use

IVR and empower staff to resolve issues quickly and first time.

Empowers staff with $2,000 of discretion to be used to solve

any customer complaint. A luxury hotel chain give staff $2,000 to

deal with complaints in a manner the employee feels is

appropriate. This increase resolution rate, prevents customers

posting complaints online right away and increases satisfaction.

Have a separate twitter handle specifically for customers

queries / complaints. @Nike has made 11k tweets and

@NikeSupport has made 161k tweets. By having a separate

twitter handle designated to replying to customers it prevents

general communication being lost in customer dialogue allowing a

quicker and clearer response.

SWS are in the process of extending their call

centre hours and all operatives are already in

the UK. We are one of the top performers in

speed of resolving complaints within the utilities

sector (UKCSI).

1. Outsourced service contract T&Cs to

motivate and empower staff to deliver quick

and satisfying solutions for customers (this

is in progress)

2. Southern Water only have one Twitter

handle used for all communications – a new

customer complaint/ query designated

handle and resource to monitor this could

be created

Horizon Scan (6/6) - PersonalisationDelivering a personalised and customisable service tailored to the customers preferences

now and in the future

52

Provide a ‘build your own’ product and service. Union Bank

provide customers with up to 15 features to build a product and

service that is right for them, including debit or ATM cards,

expedited card delivery, various alerts and account warnings,

preferred contact channels / times and a customisable UI in their

app and website account.

Amazon text you happy birthday with ‘special birthday

discounts’ and ‘only for you’ offers.

They also use cookies and AI on big data to deliver a

personalised advertising experience and accurate ‘recommended

just for you’ offers and content.

Use customer location to offer exclusive deals and discounts

at nearby merchants wherever they are in the world. AMEX

leverages geolocation on smart phones to give card holders this

personalised service and use this as a security feature to ensure

card theft can be quickly dealt with.

Currently there is less personalisation in the water sector than

other sectors due to lack of competition and relatively low maturity

in Customer Experience offerings.

1. Birthday wishes or similar events to engage

non-contacting customers and help with the

new C-MeX measurement.

2. Using customer occasions as an ‘excuse’ to

contact them can help steer customer

behaviour towards our strategic initiatives.

I.e. promoting our online portal.

3. If customer geolocation data became

available we could target our

communications around service

interruptions or other events.

4. Product features could be an innovative

way to personalise a package for when / if

Economy 7 tariffs are introduced, as seen in

the gas and electricity sectors and promote

non-regulated revenue streams.

5. Cookies to recommend partner products /

services to increase non-regulated revenue.

Innovation in retail markets

53

Scalable customer service

operation...

Outsourced approach to

customer service…

Multi-utility offer in domestic

water retail...

Developing the connected

home…

Bringing a eco-approach to the

water market…

Sharing savings with

customers…

Putting customers in charge of

their data...

Blurring industry boundaries...

Bringing artificial intelligence

to insurance...

Innovation in water retail Innovation in energy retail Innovation in other retail markets

Source: Company websites, Utility week

Additional detail on examples is set out in the Appendix

There are an increasing number of emergent business models evident across retail markets

Developing a prioritised list of experience

initiatives

Developing the long list and evaluation criteria

55

Horizon scan for best-

practice initiatives

Cost-Benefit analysis,

evaluation of existing

SWS systems and

processes and current

pain-points

Refined initiative list

We developed a refined initiative list by conducting horizon-scanning and cost-benefit

analysis

Low Cost Medium Cost High Cost

High

Benefit

Medium

Benefit

Low

Benefit

Each initiative was evaluated for cost of implementation versus

customer benefit. Any initiative that had medium or high customer

benefits and low or medium costs was taken forwards.

Other initiatives which fell outside this area, but which generated

customer interest or represented industry best practice were also

considered

2

4

6

51

3

Prioritised

Initiatives

Developing and testing our propositions

Testing and refining our propositions

57

Refined initiatives grouped into four

propositions:

Testing our propositions with

customers

Further refined

initiative list for

our four

propositions

We engaged with our customers and stakeholders to prioritise and refine our propositions,

which led to the development of a new proposition

Engaging with our customers to prioritise and

refine our propositions

Customers overall responded positively to our retail

propositions.

• SWS objective to go ‘above and beyond’ basics resonated

well

Overall, we found customers want to:

• Have issues dealt quickly and effectively

• Be given a greater choice about how SWS

communicates with them

• Be made aware of how to minimise costs

Moreover:

• They welcome greater proactivity from SWS to resolve

issues and make bills more transparent

• They also welcome community-based initiatives that

help disadvantaged people, invest in the local community

and reduce impact on the environment

• Initial branding of propositions had a mixed response

Co-created a

fifth proposition:

‘Valuing Water’

Source(s): Retail Proposition Exploration Concept Lab, Qual Detailed Findings, Relish, May 2018

Our retail propositions

58

By incorporating our customers’ requirements we were able to develop 5 retail propositions,

which supported our vision for retail: to deliver a refreshingly easy customer experience

We will develop a regional approach to

vulnerability to better understand our

customers and their needs. Sharing of

information and insight will allow us to

expand our assistance schemes,

create more tailored support

packages, and develop more

accessible channels and services.

We do more to deliver the right

experience, first time, every time. We

will solve a customer’s problem or

query the first time they contact us,

and will listen to our customers to

deliver solutions.

We know that our customers want

to be able to choose how they

interact with us.

One fifth of our transactions are

already digital, and we want to

develop a seamless, omni-channel

experience that uses customer

friendly technology to truly put

customers in control of their

services and usage.

We want our customers to feel

valued, which is why we’re tailoring

our services to their specific needs.

Solutions includes a wider range of

billing options, with customers

choosing how they want to be

contacted and then interact with us.

Information, offers, incentives and

discounts will be personalised for

customers to access new benefits.

We want to give something back to the

local community, and redefine what a

water company is and does.

We plan to do this through developing

an membership organisation to

incentivise customers, and through

community outreach projects.

Solutions

59

Solutions will involve tailoring of billing, collections and tariffs supports customer

requirements around personalisation and affordability

Customer Feedback:

Customer-facing initiatives:

Business-facing initiatives:

• Provide online servicing as a digital capability, for operations

such as transactional activity

• Introducing non-authenticated online servicing

• Optimising online payment processes

• Implementing more frequent and flexible billing, and

developing 1 bill for direct debit customers

• Develop a tailored collections programme and tariffs

• Conduct mitigation activities to protect identified properties

from flooding risks

Household customers: Offering more services via our

improved website, provide multi-channel offering and easy

access.

Improved bill design, making them personalised

Offer more payment options, including pre-payment

New, clear tariffs and discounts, including our innovative

customer discount scheme, payment holidays, and an increased

range of financial assistance support

Support customers with ongoing water issues (quality, flooding)

Retailers: Meter installation, exchange and reading services for

retailers.

Work with retailers to improve data quality to improve bill

accuracy

• Wanted more transparent user

data, rolling comparisons and

track usage capability

• Wanted clarification on new

tariffs and discount models

• Supported financial assistance

schemes

• Discount for taking own meter

readings was welcomed, but

requires knowledge of where

meter is

60

Customer Feedback:



Make it CountWe will ensure that when our customers have any issue, complaint or enquiry, it will be

dealt with quickly, efficiently and completely

Being Responsive: responding within 24h, specialising our

staff, sending notification updates, managing all enquiries

through UK call and support centres, using dedicated

account managers

Being proactive: Contacting customers proactively

regarding high bills, disruptions, and ways to save money.

Working closely with developers to understand their future

business plans

Share information with water retailers on emergency

planning

Use email, SMS and other channels to communicate works

Provide more information on services, how to reduce bills,

and additional help, to customers and developers

• Providing case management for complaints

• Using speech analytics to identify dissatisfaction to

facilitate proactive service recovery

• Obtaining UKCSI accreditation

• Consolidating all our service partners into a single

service partner contract

• Improving Service Level Agreements for works

• Proactivity and notification

updates were strongly

supported; customers asked

for tangible guarantees and

expectation setting on this

front

• Wanted UK call and support

centres

• Emphasized that specialisation

of staff had to go hand in hand

with a speedy response

• Did not support idea of ad

campaign

61

Customer Feedback:


• We could have over 400,00

customers in vulnerable

situations

• Customers want affordable

and stable billing

• Customers want us to offer

an inclusive service

• Short-term and long-term

vulnerable customers have

different needs

We will work to improve our identification and

accessibility through easy disclosure of requirements,

awareness raising mechanisms, identifying vulnerability

triggers and embedding data

Improve our Support and services by developing a wide-

ranging offer of financial assistance measures,

expansion of our Priority Services Register, and

developing initiatives to tackle transient vulnerability

We will work with external expert organisations to

deliver leading signposting support to our customers

We adopt organisational processes to embed support for

customers in situations of vulnerability throughout our

organisation and to equip our staff to identify and support

our customers effectively

We will constantly evaluate our approach against

industry-best practice

Reach and SupportWe will ‘Reach and Support’ our customers to deliver an inclusive and accessible service

for all our customers

62

Customer Feedback:



SpringBy becoming more digitally enabled we will deliver easier, simpler and inclusive customer

service

Household customers: Online account information, access

to up-to-date consumption data with optional target setting

and alerts. Free water saving devices at home

Bespoke advice on water usage reduction through home

visits, offering incentives for customers to save water

Reducing FOGs in restaurants to reduce blocked sewers

and flooding, helping housing associations and landlord

associations to avoid sewer misuse

Developers: Incentivising developers to fit water efficient

devices and appliances.

Providing an online Developer portal that tracks the progress

of an application with a unique ref n.

Retailers: Delivering 100% integration of our portal for water

retailers

• Improve website functionality

• Piloting smart meter programme to enable access to daily

consumption data, driven by installing devices

• Providing water efficiency products

• High interest on receiving up to

date, real time consumption

data

• Customers would like high

accessibility to data, including

a choice of channel

• Target setting had mixed

reception – some customers

liked it and others saw it as a

source of added stress

63

Customer Feedback:



• Increasing community presence for wider customer

base

• Increasing education in hotspot areas

• Setting up sponsorship / involvement in a community

centre

We will create a membership organisation, which

incentivises customers with regular rewards for always

paying on time or water consumption reduction, and

incentivises local communities to reduce their water

usage by investing in local community projects

Develop more community outreach programmes,

such as apprenticeship programmes and a new Skills

Academy, new skill development and jobs in the

community, engaging schools in local projects, and

working with local authorities, sponsors and third

parties.

Supporting farmers and land users to prevent pollution

of waterways.

• Qualitative research suggested

that community outreach

activities where very

motivating, as they went above

and beyond what was

expected for a water company

• Local, educational,

apprenticeship programmes

were well received

Valuing WaterValuing Water will create a partnership with customers and give back to the local

community

Measuring success

64

We will measure the success of the delivery of our propositions through key

performance indicators in AMP7

AMP7 measurement of performance

• 90% customer satisfaction with vulnerability support

• 90% effectiveness of financial assistance schemes

• Number of interventions made by financial assistance schemes

• Increasing the number of customers on PSR by c250%

• 15 complaints per 10,000 properties

• 85% First contact resolution

• CMEX

• 70% of digital interactions

• 1.2% Bad debt as percentage of revenue

• 85% First contact resolution

• Number of customers provided with WaterBit device

Customer support for propositions

65

We quantitatively tested our propositions and obtained a strong support for our propositions

The appeal of our final propositions: All propositions demonstrated a strong performance,

with good appeal, differentiation and personal

relevance for Southern Water customers.

Especially for a category with such low engagement,

there is significant appetite for more understanding

of water usage and how this can impact household

billing. Furthermore, all ideas have potential to

positively impact perceptions of Southern Water.

Overall findings

Ranking performance

Valuing Water performed well, with the dual focus of

engaging customers through rewarding them and

helping the community / environment, driving

appeal. Furthermore, a membership scheme helps

drive engagement, educate customers about their

water and help them feel valued in return.

Solutions also performed well, with the potential for

saving money as well as being rewarded, and easily

understanding what Southern Water are trying to

do, driving a lot of appeal for this idea.

2% 2%

24% 25%23% 21%

41%43%

46% 45%

33% 28% 31% 31%

73% 71% 76% 76%

Very appealing Quite appealing

Very unappealingQuite unappealing

Indifferent

output

s

Quantitative

proposition

testing

An online survey of 800 Southern Water customers testing the four optimised

propositions of Make It Count, Spring, Solutions and Valuables.

We looked to understand appeal, comprehension, drivers of liking, barriers, uniqueness,

relevance, impact on opinion and perceptions of Southern Water.

Source(s): Retail Proposition Exploration Concept Lab, Relish, June 2018

Understanding the channels our customers want.

66

Customer Engagement

67

What level of impact will digital

have on the following functions

in the next 24 months?(responses of 8,9 or 10 on a scale of 1 [no impact at

all] to 10 [huge impact])

Customers are becoming increasingly digital in the way they engage:

Digital technology is changing the way customers engage and are changing

customer experiences with adoption of new digital experiences at

unprecedented rates. The number of smartphone users is forecast to reach

5.9bn by 2021. This shift is pushing customer experiences towards digital

channels and operational improvements towards greater use of data and

analytics.

Channels are becoming increasingly integrated: More than half of US B2B

buyers prefer to research business purchases online rather than engage with

a salesperson citing convenience over other channels. Digital used to be

viewed as an additional revenue stream but is fast becoming the primary route

to market for businesses.

Competitor business models are adopting digital offerings: Digital

disruptors challenge your business to win market share by offering customers

new ways of engaging with them and new products and services derived from

insight gained from customer data.

Products and services use digital platforms for delivery: Through the use

of data analytics, businesses can make more informed decisions and retailers

can target customers with bespoke solutions to satisfy business requirements.

Digital impacts all aspects of the organisation: Two thirds of employees

believe that functional departments are too fixed in their ways, while 68% of

business unit leaders believe functional teams create barriers to effective co-

ordination

We are seeing an increasing shift towards digital in the way customers

engage with organisations at the same time as customers want more

personalised services and more bespoke solutions working in

partnership with them to solve their problems.

Source: Forrester: The Digital Business Imperative, February 2017

The way customers engage is changing

• A channel strategy, that defines which channels are

used for which customer segments and contact

types, needs to be executed.

• Effort focused on campaigns to sign customers up

to online accounts should increase.

• A customer centric approach should be taken to

refine core online journeys and increase online

functionality based on the channel strategy.

• Channel distribution shows customer contact

proportioned across contact channels. Overall cost

per contact is reduced as contact ‘shifts’ from

traditional channels such as telephone to lower cost

channels such as web chat and online.

• SWS’ channel maturity lags behind other

industries. Use of letter is high (10% vs Utilities

average of 6%) and IVR self-service (1% vs 16%)

and social media low (0.04% vs 4%). SWS have

higher adoption of webchat than Utilities average but

value is not being driven from this channel, AHT is

c.16-17mins per chat compared to c.10mins.

• Although, a lack of cross-industry data is not

available for use of the online channel, we can infer,

based on the above, that the use of the online

channel could be significantly increased too.

• Previous analysis*, based on customer segmentation, suggested that online

adoption could reach 60% of the customer base (c. 1.14m) by the end of

the AMP. Latest figures show 154k online account sign-ups.

• This equated to a £1.1 to £1.3m annualised benefit** from shifting 493k

contacts a year to online.

Channel Distribution - benchmarking We have made good progress to push adoption of digital and self-serve channels, but channel maturity still lags behind other industries

Observations - Channel distribution

Solutions - Channel Distribution

Contact by channel (as % of total contact) by industry average

Benefits analysis - Channel Distribution

*Southern Water Services Customer Experience Review, Jan ‘17

**Southern Water Services - Vision, Proposition and Channel Shift, Nov ‘16

Source(s): see slide 95

Channels and choice

We give customers choice on how to contact us:

Phone

Live chat

Your Account

Email

Letter

Social media (actively monitored and managed)

Special services such as Minicom and large print bills

We already provide customers with channels to suit their preference and query, enabling us to move towards the average cost to serve in AMP6.

We have segmented our customer base and we understand their channel preferences. We also understand our customers through insight, and are increasingly tailoring our services to their needs, particularly through our customer experience propositions.

We let our customers know about new services and tariffs along with help and advice through on and offline channels depending on their preference.

We also investigate new services to give even more choice – such as bundling with other utility companies.

We are bolstering our capabilities to be able to offer greater choice for customers through a range of channels – this is delivered through the initiatives

We currently provide customers with choice on how to contact us, and have worked in AMP6 to improve our offering

Enhancing Customer Experience

70

Eco-passionate

Information on environmental products/ services and community

engagement

Disengaged

Needs efficiency and convenience

Savvy Savers

Needs water efficiency advice to reduce bills

Disengaged Savers

Needs information relevant to them but ultimately a quick and easy

service

Family First

Needs information on local community initiatives and water efficiency

advice

Customer type Channel preferences

1

2

3

4

5

Developers

Business Customers and Non-household retailers

6

7

Source: Customer segmentation insight report

Key

Preferred communication

channel

Other acceptable

communication channels

Phone call

E-mail

Text / App

Letter / leaflet

Our customer persona research exposes clear differentiators in channel preferences which can enhance our customer experience

Developing the capabilities required for implementation and delivery.

71

Approach to developing capabilities

72

a. Consider the range of

capabilities required to deliver the

focus on customer experience

propositions

b. Build delivery plan

Our delivery plan is separate to this

strategy document and is being

developed in conjunction with the

PR19 plan.

• Great Customer Service Board

Policy

• Customer Inclusion Board

Policies

• Process and policy

• Brand

• People and culture

• Customer participation

• Insight and reporting

• Systems

We have considered the capabilities we need in order to effectively deliver a refreshingly easy

customer experience through our customer experience propositions and to embed a culture of

customer led decision making throughout the business. Here we have flagged the categories of

capabilities we are reviewing and are incorporating our plans to improve in our delivery plans

We have built a delivery plan by considering the range of capabilities required to deliver a refreshingly easy customer experience

Capabilities

73

Process & Policy

Insight & Reporting

People & CultureBrand

Systems

Customer participation

Delivering Customer

Experience

People & Culture

A customer-centric culture,

engagement and leadership throughout

the company across all functions

(relentlessly pushing the customer

agenda at every opportunity).

Process & Policy

Relentless monitoring of

customer interaction

throughout their end-to-end

journey, identifying “pain

points” and revising internal

processes and polices to

ensure customer

expectations are met.

Insight & Reporting

A deep customer insight capability from

within based on data, customer

research and wider stakeholder

engagement to inform business

planning, drive marketing and pre-empt

potential problems.

Customer

participation

High level of customer

involvement in the

company’s decision making

and business planning

process. This ensures that

company’s plans are

increasingly customer-led.

Brand

The vision of the company is encrusted

within its profile allowing customers to

build trust through increased familiarity

and co-creating future customer

delivery.

Systems

Effective and efficient systems that

lower the effort needed from customer

& employees that resolve issues and

provide a good customer service at first

point of contact (lowering the risk of

repeat calls and escalation).

We have identified 6 capabilities required to deliver a great customer experience: Brand, customer participation, people & culture, process & policy, systems and insight& reporting

People & Culture

74

Customer Led culture is pervasive at all levels of the organisation; all colleagues have a passion for

delivering customer service, understand their individual role in achieving Customer-led Success, and are

empowered to take ownership for customer issues and manage these through to resolution across the

business

CX Focus Area Focus area objective

1 Customer Led RecruitmentTo attract, select and retain employees with a balanced skillset including customer-

focus, within the appropriate roles

2Customer Led Competency

Framework

To consistently embed customer competencies required to deliver CX commitments

across the business to drive and support recognition of the right behaviours

3Customer Led Talent &

Development

To enable each employee to deliver on their commitments to customers through

customer-focused training

4Customer Led Performance

Management & Recognition

To drive achievement of customer commitments through personal responsibility for

delivering on customer performance metrics

5 ContractorsTo ingrain the same customer-focused behaviours in our customer-facing contractors,

in line with the company’s values of Customer-led Success.

6 Continuous improvementTo manage capacity and streamline processes to reduce the time taken to respond to

customers and improve service levels.

We will further enhance our customer-led culture by focusing on 6 key areas

Policy & Process

75

Policies are developed in line with customer need and expectations supported by customer led

processes. Contractual agreements with partners incorporate specific customer facing SLAs and

incorporate financial incentives based on delivery of agreed customer outcomes


1Customer Led Contractual

Agreements

To embed Customer-led Success within all contractual agreements to ensure delivery

of customer commitments by all organisations / third parties

2 Customer Led SLAsTo ensure that Service Level Agreements meet the expectations of customers and

support the delivery of customer commitments

3 Customer Led PoliciesTo ensure that internal policies meet the expectations of customers and support the

delivery of customer commitments

4 Customer Led ProcessesTo ensure that processes meet the expectations of our customers and support the

delivery of customer commitments

We will embed Customer-led approaches to ensure delivery of customer commitments

Systems

76

IT Strategy is designed to deliver customer outcomes and drive investment in responsive, agile platforms

that support rapid innovation, offer customers a seamless suite of channels, leveraging data to deliver a

curated, personalised experience and empower colleagues to deliver a differentiated service


1 Single Customer View (CRM)A single record of customers across segments providing the right customer

information to the right employees at the right time to deliver excellent CS

2 Smart Data

Leveraging Smart Data (analytics, AI and machine learning) to drive customer insight

with systems in place to enable reporting and visualisation of key customer metrics

across the business

3 Channel capabilityThe capability to allow customers to communicate and interact at a time that is

convenient for them via their channel of choice

4 Customer Support systemsThe capability to enable employees to deliver a seamless customer experience

across all customer segment and internal function touchpoints

5Artificial Intelligence &

Robotics

Automation of the delivery of customer service to improve customer experience –

reducing call volume, increase speed of response and resolution.

6 Security & resilienceSecurity protocols are in place to enable companies to move faster to exploit new

technologies and new opportunities whilst understanding and managing the risks.

Our IT strategy will support the delivery of our customer outcomes by providing responsive, agile platforms

Insight & Reporting

77

A customer insight function exists and uses advanced analytics to generate insight for the business.


1 Data qualityEnsuring decisions affecting customers are evidence-based using high quality data,

in order to provide the right customer outcome

2 Customer KPI reporting

Providing decision-makers with the customer insights they need to make the right

tactical and strategic decisions; and drive consistency in measuring and reporting on

the success of customer commitments across the business

3 Driving customer insights

Optimising all available data to better understand the needs and preferences of

customers, utilising a range of analysis techniques and reporting tools that will easily

and quickly generate insight and drive both tactical and strategic actions. Aiding the

provision of customised service delivery and increasing the experience of customers.

Our Customer Insight function will use advanced analytic to deliver customer metrics which will allow us to drive insights and track success

Customer participation

78

The outcomes provided to customers must reflect their needs and priorities. A key part of this is ensuring

our business plans (including service and investment priorities) are developed in conjunction with

customers (this is also a key priority for Ofwat)


1 Attitudes & preferencesTo determine which areas of service customers see as priorities for improvement and

to understand customers’ views on important topics of interest

2 Key options & trade offs

To gather more specific, quantitative, data on the value customers place on the

various improvement options, and to test customers’ views on big decisions or trade-

offs. This allows analysis of the cost/ benefit of various service improvement options

3 Service package & choicesTo validate the package as a whole (including service/investment proposals), in light

of affordability constraints and wider plan

4 Governance & oversightTo ensure that customers are at the centre of the business planning agenda and

achieve buy-in right across the organisation

5 Ongoing engagementTo ensure that customer engagement is a continuous process and that it is

embedded into business-as-usual

We will embed customer participation and engagement into the development of every section of our business plan

Brand

79

The organisation measures and uses customer insights to optimise future strategies and drive

hypotheses on successes of campaigns. It uses tight integration between customer involvement and

profile raising to drive initiatives that matter to customers


1 Campaigns and educationTo provide customers with information that’s valuable to them and educate future

generations about the environment

2 Customer communicationsTo communicate with customers using their contact method of choice and in simple

language they understand.

3 Digital customer interactionsAnticipation of the future needs and expectations of customers, and provision of a

consistent service regardless of contact method.

We will raise our profile through campaigns, communication and digital interaction to optimise our strategy

Examples of innovative service delivery in water retail

82

Pelican Business Services was

established in 2016 from the Bristol

Wessex Billing Services Limited JV,

originally set up in 2001. The rebrand was

to expand the business into new sectors

and with new clients to serve as a point of

contact for all non-operational customer

enquiries.

Pelicans are known for collecting things

and storing them in a place that’s safe and

secure. The company reflects these same

attributes and prides itself on being

nurturing and sociable – team members

not individuals.

‘We deliver award-winning customer

service by empowering our people to

recognise the needs of our customers’ –

Pelican Business Services

Scalable customer service operation... Outsourced approach to customer service…

Source(s): Company websites, internal insight

Yorkshire Water and Loop Customer

Management are both part of the Kelda

Group of companies.

Loop Customer Management specialises

in delivering customer service support to

Yorkshire Water including billing, debt

recovery and incident management.

Loop is not customer facing. All domestic

retail services are delivered under the

Yorkshire Water brand.

Loop has been accredited with a ‘One to

Watch’ star rating from Best Companies

and additionally hold the government

standard for Customer Service

Excellence.

Multi-utility offer in domestic water retail...

Wessex Water purchased Flipper, a utility

price comparison and switching service

company, which offers an ‘innovative and

hassle-free’ service for residential energy

customers to save money on their energy

bill.

Wessex Water acquired Flipper as part of

its focus on delivering innovation and to

ensure customers are provided with

excellent and affordable services.

Wessex has agreed to invest significantly

in the business to enable rapid growth of

customer numbers in energy and unlocks

the capability to deliver a multi-utility

offering within the domestic retail market.

Examples of innovative service delivery in energy retail

83

Hive is Centrica’s Connected Home

proposition which seeks to create greater

customer stickiness for British Gas energy

supply.

Hive is the UK’s leading smart home

provider aiming to make customer daily

lives easier to manage via Hive Actions

and the internet of things.

Centrica has also recently acquired

FlowGem Limited, an early stage UK-

based business developing unique and

innovative technology to remotely detect

water leaks.

Centrica plans to invest £500m in the

Connected Home by 2020.

Developing the connected home… Bringing a eco-approach to the water market…


Ecotricity provides electricity and gas

services generated from renewable

sources. Ecotricity prides itself on ethical

pricing and providing the best customer

service, according to Citizens Advice.

Ecotricity has increasingly been looking

for new ways to serve its customers with

both new innovative products and services

including selling bespoke services via

applications.

Recently Ecotricity has demonstrated

interest in the UK water market - “We do

have some ideas around how we could

make that work. We think we could bring a

sort of eco-approach to the water market. I

would say it is possible.” - Dale Vince,

CEO Ecotricity

‘The nation’s most trusted utility supplier,

the one you’d recommend to your mum’

Utility Warehouse is a single supplier for

multiple utilities – Energy, Home Phone,

Broadband and Mobile services, bundled

together.

Further, Utility Warehouse has partnered

up with UK retailers like Sainsbury’s,

M&S, Boots and eBay to offer savings

through the CashBack card and through

online sites.

Utility Warehouse are not the cheapest

provider but they have taken steps to

reduce costs through saving on marketing

and advertising spend and passing it back

to customers through lower bills.

Sharing savings with customers…

Examples of innovative service delivery in other retail

markets

84

Responding to regulatory change (PSD2)

that is mandating access to customer data

across banking, Monzo is building a new

bank built on modern technological

infrastructure, making innovation and

partnerships simpler and faster than would

be possible in traditional banks. Their

proposition already allows customers to

analyse their spending habits by type

(consolidating, for instance, their utility

bills), and they intend to provide insights

to customers going forwards, so that they

can make better financial decisions (such

as, switching to a cheaper energy

provider).

“Built for your smartphone, this is banking

like never before. One that updates your

balance instantly, sends intelligent

notifications, and is actually easy to use.” -

- Monzo

Putting customers in charge of their data... Blurring industry boundaries...


Uber is innovating on top of its existing

technology platform and transportation

infrastructure to digitally partner with

catering companies. Their UberEATS

proposition allows customers to order food

from their mobile device and have it

delivered to their location, using the

interface they are familiar with from the

taxi service. In doing so, the company is

starting to blur industry boundaries by

utilising existing infrastructures in new and

compelling ways.

“Get the food you want, from the London

restaurants you love, delivered at Uber

speed.” -- UberEATS

Bringing artificial intelligence to insurance...

Lemonade Insurance Company is a

property and casualty insurance company

that is transforming the business model for

insurance. It has created an insurance

experience that is fast, affordable and

hassle free by handling most claims

instantly.

Lemonade takes a fixed fee out of monthly

payments and use the rest to pay out

claims. They treat premiums as if they

were the customers money and return

unclaimed remainders in their annual

‘Giveback’, to causes policyholders care

about.

They are a low cost operation built on a

technology platform that uses artificial

intelligence bots to on-board customers

and manage claims.

Glossary.

Glossary of Terms (1 / 2)

Term Definition

Abandonment

RateThe abandonment rate is the percentage of customers who have ended a contact before an agent answered it.

AHTAverage Handling Time (AHT) is a measurement of the total amount of time spent on a complete interaction. It

includes everything from the first ‘Hello’ to the agent finishing after call wrap and getting ready for their next call.

AverageRefers to the average value across selected group of comparable sectors (Banking & Capital Markets,Telcos and

Technology, Insurance, Public Sector & Utilities).

B&CM Banking, capital markets and investment companies

Customer

Service metrics

Refers to metrics such as abandonment rate, FCR and hold time, which, in improving, improves the customer

experience but not the contact centre’s efficiency.

Digital The routing of transactions or interactions through IT based services.

FCRFirst Contact Resolution (FCR) is the proportion of contacts that are resolved in the first instance, without a

customer having to respond further or follow-up.

Handle Time Handle time is the time taken processing a contact by an agent.

Glossary of Terms (2 / 2)

Term Definition

P.S. Public sector

Productivity Also referred to as occupancy, this is usually the non-idle time of an agent on a typical day.

Repeat contactThe opposite of First Contact Resolution, Repeat contact is the proportion of contacts that are not resolved in the

first instance, with a customer having to respond further or follow-up to resolve their query

Self-service The ability of a company to process transactions using autonomous systems, such as settling a bill online.

T&T Telcos and technology

Talk time Average Talk Time (ATT) is the amount of time an agent spends talking to customers.

Utilities / Wider

UtilitiesGas, water, electricity companies

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