Water bills are set to rise by £10 a month from April, according to the latest forecast from Water UK - adding further pressure to household budgets.
At the same time, service demand is expected to grow, making it crucial for water suppliers to prepare. As we explore below, the success of any servicing operation hinges on people and processes, but their role becomes even more vital when supporting vulnerable customers.
Throughout the cost-of-living crisis, we’ve worked closely with Energy and Water clients to manage these challenges. Previously, we helped a major supplier unlock a ~£5m cash uplift.
Below, we share key insights and practical guidance to help suppliers manage the latest phase of the crisis.
This blog was originally published in February 2024 and updated on 31 January 2025 to reflect the latest water bill forecasts.
Increased pressure from Ofwat and the ICS
Service failures will be costly in 2025 as pressure increases from Ofwat. We've previously seen the announcement of new powers to fine suppliers for poor customer service, which could be as high as 10% of turnover.
This followed the introduction of new vulnerability standards by the regulator, with an expectation that suppliers will have appropriate support in place for those that need it most. So far, their view is that “awareness of the support available for those struggling has continued to remain low.”
It’s crucial that suppliers are embedding proactivity into their customer-facing teams, equipping advisors with the skills and tools for signposting customers to appropriate support options, as early as possible.
A report from UKCSI also makes for stark reading, with water companies seeing the largest fall in customer satisfaction, dropping by 4.1 points compared to 1.9 for energy. Utilities also retains the lowest overall score of all 13 sectors.
How to manage increased service demand
Suppliers should focus on two key enablers:
- People
- Process
Investing in people
Continuous development of frontline teams
Results are driven by people. To improve operational performance, investing in learning and development should be a strategic priority, to leverage the skills and attributes of your people.
This could mean:
- Assessing service teams and defining the standard of excellence – implement training plans to bridge identified gaps
- Understanding whether, if used effectively, you have the right skills and attributes to service your demand (resource planning)
- Investing in managers and/or quality teams – they’re vital for coaching and developing your people
Conversation quality is key
From our experience, the art of developing effective customer conversations is often missing from advisor training.
Recently, we helped a retailer in our energy practice to transform their approach to collections, upskilling advisors to lean into difficult conversations and offer sustainable payment solutions. Overall, the programme led to a ~£1m increase in cash collections, and ~£200k Bad Debt benefit.
Approaching collections conversations in this way can leave customers feeling educated and supported, helping to strengthen satisfaction scores, rather than driving up call times, repeat demand, and complaints.
It’s important to:
- Review your quality framework - Is it dynamic and evolving to meet the changing demands of your customers?
- Review your service success measures – Are you focussing on quality metrics, such as customer feedback/NPS, first call resolution, and propensity to complain?
- Encourage regular call listening by operational leaders – Are you truly satisfied with call quality?
Build a customer-centric culture
CCW highlights the importance of customer-centric culture, showing how this can create meaningful experiences that strengthen customer satisfaction, loyalty, and advocacy.
Customer-centricity can’t be felt unless it’s upheld by your people and processes.
This can mean:
- Reviewing your cultural aspirations to ensure you have a clear vision
- Establishing the appropriate accountability to drive your culture
- Understanding how your people are feeling and what changes are needed, with a strong communication plan in place to encourage listening
Investing in process
Understand your customers and leverage insights
You should be familiar with the customer types that interact with your brand, including those who are potentially vulnerable. This understanding should be leveraged to deliver a consistent experience for each customer type, achieved by:
- Segmenting your portfolio to inform communication and treatment strategies
- Defining value for each customer type, with key processes mapped out to understand opportunities for waste removal
- Continuously monitoring process performance and sharing with your frontline
- Identifying the key insights you want to generate to best inform decision making
- Referencing insights in steering meetings and performance calls, with clear accountabilities for driving improvement
How can BFY help?
Water suppliers must act swiftly in preparation for increased service demand, with an above-inflation rise in bills forecast for April. At BFY, we’ve helped a number of utilities clients to identify and overcome service challenges, recently supporting a large B2B supplier with transforming its culture.
We also offer a market leading agent conversation programme, pre-approved in meeting the Institute of Customer Service (ICS) accreditation requirements. This tailored course develops the capabilities of your frontline teams, focusing on better connecting with customers, the power of words and actions, and embedding a customer-centric culture.
If you’d like to know more about how we can help, contact Jonathan Paton or Ashley McLeod.
Jonathan Paton
Senior Manager
Jon specialises in Customer Operations leadership, customer contact, and operational service delivery transformation/improvement.
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