Customer Engagement for Utilities - AMP8

As we are moving towards 2025-30 view of the utilities world driven by both AMP8 and change in government driving many rethinks. My observation reflects a significant shift in how water utilities need to define and engage with their Customers. As regulations evolve, the concept of "customer" in the water utility sector is expanding beyond traditional bill payers to include a broader group of stakeholders, each with distinct needs and expectations.

Here’s how someone could approach defining customers and developing an operating model to support them:

?1. Broadening the Definition of Customers

?Traditional Customers:

- Bill Payers: Households and businesses that directly pay for water services.

?Expanded Customer Base:

- Non-Bill Payers: Individuals or entities that benefit from the water services but do not directly pay for them (e.g., tenants, communities).

- Regulators: Bodies like Ofwat, which oversee compliance with regulations, ensuring service quality, environmental stewardship, and fair pricing.

- Environmental Groups: Organizations focused on the impact of water utilities on natural resources, ecosystems, and climate.

- Activists and Advocacy Groups: Entities that represent public interests, often pushing for transparency, accountability, and sustainable practices.

- Local Communities: Residents and local organizations affected by water infrastructure projects or service levels, whether they pay bills directly or not.

?2. Defining an Operating Model to Support the Expanded Customer Base

Customer Segmentation:

- Stakeholder Mapping: Identify all relevant stakeholders and group them based on their interests, influence, and interaction with the water utility.

- Needs Assessment: Understand the specific needs, concerns, and expectations of each customer group, such as reliability of service for bill payers, environmental impact for advocacy groups, or regulatory compliance for regulators.

Engagement Strategies:

- Tailored Communication: Develop communication channels and messaging specific to each customer group. For instance, regulators might need detailed compliance reports, while communities might appreciate more accessible updates on service disruptions or environmental initiatives.

- Stakeholder Consultation: Regularly engage with all customer segments through surveys, focus groups, public consultations, and partnerships, ensuring their voices are heard in decision-making processes.

Service Delivery:

- Customer Service: Extend customer service beyond bill payers to address the concerns of non-bill payers, communities, and environmental groups, possibly through dedicated teams or roles focused on stakeholder relations.

- Sustainability Initiatives: Integrate environmental considerations into every aspect of operations, demonstrating commitment to sustainability, which resonates with environmental groups and regulators.

?

Performance Metrics:

- Broader KPIs: Expand performance indicators to include metrics relevant to all customer groups, such as environmental impact, community satisfaction, and regulatory compliance.

- Transparency and Reporting: Regularly publish reports that address the interests of all customers, providing transparency on how the utility is performing in areas like environmental stewardship, customer service, and community engagement.

?Innovation and Continuous Improvement:

- Feedback Loops: Create systems for continuous feedback and improvement, allowing all customer groups to influence the utility’s operations and strategy.

- Adaptability: Stay agile and ready to adapt to further changes in regulations or customer expectations, ensuring that the operating model remains relevant.

??Summary

?In redefining customers for UK water utilities, consider the full spectrum of stakeholders affected by or interested in utilities operations. The operating model should be inclusive, adaptable, and responsive, ensuring that all customer groups feel valued and their needs are met. This approach will not only align with regulatory expectations but also enhance the utility's reputation and sustainability.

Next article would explore how to select the right system based on new customer ecosystem realities...

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