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A customer-first strategy is still vital for utilities

Putting customers first may be an old idea, but it’s becoming an increasing focus for many utilities and regulators that are joining the growing trend towards allowing customer satisfaction into the core of their business model.

Aither Principal Tim Ryan, who is to present on customer satisfaction at the upcoming Australian Water Association ACT Water Matters Conference, said utilities and regulators are getting a better idea of whether customers are truly satisfied, and it’s paying off.

“Regulators and utilities themselves are increasingly looking to understand what customers value, taking a more holistic approach to servicing, as opposed to other performance metrics,” Ryan said.

“Both utilities and regulators, more recently, have started this journey towards customers because there are benefits involved in customer-focused decision making.

However, Ryan mentioned that due to the perception that customers can be misinformed on issues facing the industry, there can sometimes be disengagement. On the flip side, with the price of water increasing, customers are asking more questions about servicing.

“The challenge is that to ensure meaningful input, they would need to educate customers, which takes time and effort,” he said.

“Historically, it had never been a significant focus because water was always so cheap. The industry primarily focused on improving supply and service standards. But with more augmentation needed, it starts to hit through to prices for customers.

“The industry now needs to understand what customers want, because they are starting to complain about prices, which indicates they don’t consider it to be value for money.”

Although educating customers in order to get informed input takes time and energy, the benefits garnered are undeniable.

“Interactions between the utilities and the regulators have altered to make utilities focus more on customers, as opposed to regulators, and through realising that customers are the key to the relationship,” Ryan said.

“One of the key things is transparency, in terms of providing more information to the customer base. In some cases, there have been changes in decision-making to cheaper options because customers don’t want the increase in service standards.

“But you can get benefits of efficiency through that by understanding what customers value and starting to deliver on it. It also means you’ll have a better relationship with customers.”

While customer satisfaction is a trend driving many industries at present, Ryan said when it comes to monopoly services, it is even more important to know what customers want for the money they have to pay.

“Customers are important to monopoly services. They don't have a choice, they have to purchase from the service provider, so it’s important to have their input. We need to know what their needs are, or else they will become dissatisfied,” he said.

“You present them with the trade offs to be able to have an informed discussion about what they are receiving for the money they are paying. It’s about educating the customers on the options available.”

While this has been an increasing focus for the utilities and regulators, Ryan notes that this is not necessarily the case across the industry.

“Conversely, while the utilities and regulators are increasingly focused on what customers value and how best to incorporate those values, questions then turn to how governments are incorporating these customer values into policy decision-making,” he said.

“These policy decisions can have a significant impact on the direction of the industry, and subsequently customer prices. It is therefore important to ensure that these policy decisions are aligned with the values customers expect from the water industry.”

Register for the ACT Water Matters Conference to hear more from Tim Ryan on customer satisfaction and policy considerations. 

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