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The water sector is under increasing pressure to find new ways to deliver their services. Innovation has been highlighted as the critical connection.

Turning on the tap of innovation

Turning on the tap and having water flow is pretty much a given to most people in the developed world. For something so important, little thought goes in to how the water arrived at the outlet, even though our societies future depends on it. Behind the scenes, however, the challenges to deliver this future are mounting.

Small streams make big rivers

Facing challenges such as population growth and climate change, issues of leaks from ageing systems and affordability, companies in the water sector are under increasing pressure to find new ways to deliver their services. Innovation has been highlighted as the critical connection and foundation for development of each of the 4 key expectations in Ofwat’s PR19 report: great customer service, resilience, affordability and innovation. However, Ofwat’s director of strategy and policy Carl Pheasey suggests too little is being done to innovate and efforts must intensify if future demands are to be met.

Similar to the retail banking sector in 2016, the water industry has awoken to the importance of the customer and understanding how their engagement is essential over the long-term. While customers may have accepted the status quo until now, as other industries develop their services, customer expectations about water are on the rise. To meet the demands of PR19, water companies need customers to play a more active role in water management and to be more aware of how their behaviour affects the world around them.

Opening the floodgates to customer engagement

I wrote about customer apathy in retail banking in 2015, where I recognised customers felt powerless in the system. PSD2, MiData and Open banking each helped to make the industry more transparent and thus enabled customers to play a more active role and understand their options. Whilst it was deemed an apocalypse by some at the start, as the dust settles it is increasingly clear that benefits exist for both customers and banks. Water companies are facing a similar dilemma and can take some key learnings from the bankers.

  • Being transparent is rewarding – when customers have all the information, they need they feel more in control to make better decisions. In banking it was helping customers to manage their money better, in water it is educating customers about their own usage patterns in order to help them develop better behaviours. In turn this will surely help companies meet their PR19 expectations.
  • Sharing helps you grow faster – collaborative working isn’t about losing control, it is about sharing information openly so that the best brains can work on building a better outcome which benefits all in the end. In an industry where risk avoidance is the norm, working with new suppliers can help to foster the agility needed to innovate quickly. Traditional bankers did it when they teamed up with challengers, TfL do it by sharing their traffic data with anyone that wants it.
  • Customers will value you and share their data, but they need to trust you. By building a relationship with mutual benefit, customers will learn to trust you. Using customer data to create better experiences for customers will more likely engage households and consumers in to the process as well as the outcomes.
  • Be in their world – bankers found they cannot rely on one avenue to communicate with their customers. High street branches are important, but so too is online, telephone, apps and social. Each must, within reason, offer the access to information the customer demands. Similarity water companies need to be in the right space at the right time to help customers make the decisions they need to make. Be that information about their own usage on annual bills, disruption warnings on social media, wasteful behaviours in the press or any other information a customer may need- whether they know it or not.

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