From Asset Performance to
Customer Experience
Peter Prevos
PhD Candidate, School of Business
Manager Systems Monitoring, C...
12 September 2013 The Invisible Water Utility 2
From Asset Performance to
Customer Experience
12 September 2013 The Invisible Water Utility 3
Customer Perception
Water quality spectrum
12 September 2013 The Invisible Water Utility 4
Stakeholder Interviews
● Professional
Orientation
– Technical
– Financial
...
12 September 2013 The Invisible Water Utility 5
Stakeholder Interviews
● Customers
– Low involvement
– High expectations
–...
12 September 2013 The Invisible Water Utility 6
Relationship Between Engineers
and Other Employees
Employees with engineer...
12 September 2013 The Invisible Water Utility 7
Customers Don’t Care about Tap
Water
Cognitive Affective
Customer acknowle...
12 September 2013 The Invisible Water Utility 8
“We care about water, even if you
don’t”
Professionals have stronger emoti...
12 September 2013 The Invisible Water Utility 9
The Invisible Water Utility
● Low involvement
● Low profile branding
● Hig...
12 September 2013 The Invisible Water Utility 10
12 September 2013 The Invisible Water Utility 11
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From Asset Performance to Customer Experience: Customer Service in Tap Water

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Judging by the available publications and conference papers, the water industry is dominated by engineers, scientists and economists, with much less attention given to research into customer service. The application of marketing theories to provide value to customers of water utilities is an under-researched area given the monopoly status of service provides. The purpose of this presentation is to share some of the results of this research on the relationship between engineering and customer satisfaction.

A paradox appears to exist in the provision of reticulated water services. Providing service at a high level of technical proficiency is a necessary, but not a sufficient condition to ensure customer satisfaction. To further research this problem, several stakeholder organisations of reticulated water customers have been interviewed to investigate the factors determining customer centric service provision. These interviews revealed that a ‘professional orientation’ can exist, obstructing the creation of a positive customer experience. Focusing on the professional aspects of service delivery (engineering, finance, procedures and politics) carries the risk of losing sight of the human dimension, leading to dissatisfaction.
The core of the issue is that technology and science are predictable―engineering problems can be solved in neat equations―while human behaviour is more complex and cannot be captured in models and equations. Tensions between marketing and engineering have been extensively researched in the manufacturing industry, but not in service provision. More detailed research is being conducted, collecting data from water utilities to further investigate the relationship between customer service and engineering.

In this presentation the preliminary results from this researched will be outlined. Based on these findings, a model for experiential marketing of water services is proposed, which moves away from a focus on asset performance to a focus on customer experience.

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  • Part time PhD candidate at La Trobe and manage systems reporting function at Coliban WaterResearching relationship between organisational behaviour and customer perceptionMy research places me in no-man's-land: engineers don’t understand why I am interested in marketing; marketers don’t understand why I research a monopoly serviceMarketing = customer satisfaction engineeringLast year presented conceptual ideas about ‘The Invisible Water Utility’Today sharing some of the research findingsSpecifically about the relationship between asset performance (the engineer’s perspective) and customer’s perspectiveWater is an inherently technological service, dominated by engineers and scientistsMost publications in the industry are about science and engineering; not much research on customer serviceMy research also touches on the role of engineers in the provision of service
  • Building a model to measure service quality in domestic water servicesService quality can be viewed from two perspectivesIntrinsic: The service provider’s viewExtrinsic: The customer’s viewThere is a tension between these views (water quality paradox)Water utilities are mostly interested in providing safe water; this is predominately an engineering activityCustomers are interested in good water; this is predominately a marketing activity – managing the perception of customersGood water = customer satisfactionSafe water is a necessary condition to have good water, but not a sufficient condition.Providing safe water is not a guarantee for customer satisfactionSafe water relates to engineering: predictable and rationalGood water relates to psychology: unpredictable and non-rationalThe taste of chlorine residualResistance against fluorideTaste depends on the container the water is drank fromSafe water is intangible. Consumers have to trust the utility to provide safe water. They cannot seeGood water is tangible – it is based on what customers can see, smell, feel, hear and tasteThis model is the foundation of the research
  • Interviewing representatives of stakeholder organisationsAsked questions about employee behaviour and customer perceptionsPurpose was to test validity of theoretical model; not to assess performanceInterviews were not for benchmarking how bad or how well the water industry performs. It was used to fine-tune a model of best practice customer service.Interviews revealed that a type of behaviour that can frustrate customer service is “professional orientation”Technical: focus on solving technical problems instead of people problemsFinancial: Ignoring hardship issues: “Placing more value on prudent financial management than on the impact to customers”Procedural: Focus on procedure and process instead of individual service. Regulation is the minimum standard “tensions between the amount of prescriptive regulation and the ability to be innovative”Political: The question needs to be asked whether voter satisfaction is a good proxy for customer satisfaction. Not further researched.Developed questions to test the existence of these attitudes to see how they impact on customer perception
  • Second part of the interviews focused on their perception of the views of customersLow involvement: customers don’t really care about water utilities"passive receivers of service""want very basic things"Although consumers want basic things; expectations for level of service are very high"increasingly an expectation about the aesthetic water quality"Managing customers in hardship was recurring theme"culture of actually wanting to understand" customersImportance of displaying empathy towards customer needs and concerns.Interviews confirmed the validity of the theoretical model from a practical perspective.Next phase: surveying employees and customers of water utilitiesPresenting data from two utilitiesData collection still ongoing: presenting some preliminary results
  • Employee survey includes questions on the relationship between engineering and customer service staffQuestions relate to the level of potential conflict between the two professional groupsIt is difficult for engineers to communicate effectively with customer service staff.Engineers and customer service staff do not trust each other.Engineers and customer service staff have different values.Engineers and customer service staff do not understand each other.Black lines are the median valueBoxes are the majority of responsesWhiskers indicate the outliersCircles are the extremesEngineers perceive the potential for conflict as much lower than other staffWho is correct: everybody is. This is an attitude survey.Also asked questions about activities related to customer focusThe data shows that the lower the level of perceived conflict between engineers and other staff, the higher the level of customer focus
  • Customer involvement is about how much we care about productsWe generally care a lot for our clothes, for our cars, phones and so . Products that define our identity are generally high in involvementWater is considered a low involvement service because it does not define you as a person. Tap water has not brand.This is written in the literature, became apparent in the interviews – but there is no empirical validationThis data is based on a twitter based survey with mainly US water users Involvement is cognitive (rationally/ with the mind) and affective (emotional attachment)Black lines are the medianvalue; Boxes are the majority of responsesWhiskers indicate the outliers; Circles are the extremesWater: very high cognitive involvement. Medium affective involvementCurrently working with water utilities in Victoria and elsewhere to gather more information for final verification.
  • Respondents also included a sample of water professionals.They score significantly higher in the affective score.This provdes that the TXU ad from a few years ago also applies to the water industry
  • The Invisible Water Utility is a concept based on my literature review and currently being verified through researchAcknowledges that water is a low involvement productHigh customer expectationsService quality can be measured by the time customers require to enjoy our services, including time delays due to disruptions, complaints, obtaining information and so onThe invisible water utility minimises the amount of time consumers Each interaction with a customer is a moment of truth. This can be used to model utility performance what is the percentage of moments of truth that meet customer expectationsMedium size utility such as CW has one million MoT each dayBecoming invisible is also an exercise in modestyNo proactive branding – only passive advertising; let the customer find you when neededLastly: move focus from technology to customer experience; define services in what water does for people, not the water itself.
  • Paraphrasing: “In the past water utilities were managed by engineers, now they are managed by economist. In the future they should be managed by anthropologists”. People that understand human behaviour – which is the essence of marketing.
  • From Asset Performance to Customer Experience: Customer Service in Tap Water

    1. 1. From Asset Performance to Customer Experience Peter Prevos PhD Candidate, School of Business Manager Systems Monitoring, Coliban Water
    2. 2. 12 September 2013 The Invisible Water Utility 2 From Asset Performance to Customer Experience
    3. 3. 12 September 2013 The Invisible Water Utility 3 Customer Perception Water quality spectrum
    4. 4. 12 September 2013 The Invisible Water Utility 4 Stakeholder Interviews ● Professional Orientation – Technical – Financial – Procedural – Political Classic cartoon about product development failures.
    5. 5. 12 September 2013 The Invisible Water Utility 5 Stakeholder Interviews ● Customers – Low involvement – High expectations – Hardship as a moderator Hardship was the most discussed topic.
    6. 6. 12 September 2013 The Invisible Water Utility 6 Relationship Between Engineers and Other Employees Employees with engineering degree perceive potential conflict with customer service employees as lowest.
    7. 7. 12 September 2013 The Invisible Water Utility 7 Customers Don’t Care about Tap Water Cognitive Affective Customer acknowledge that tap water is important (cognitive), but don’t have an emotional connection with tap water (affective)
    8. 8. 12 September 2013 The Invisible Water Utility 8 “We care about water, even if you don’t” Professionals have stronger emotive connections with tap water.
    9. 9. 12 September 2013 The Invisible Water Utility 9 The Invisible Water Utility ● Low involvement ● Low profile branding ● High level of service ● Minimise contact ● ‘Moments of Truth’ ● Focus on experience, not technology Consumers are mainly interested in sensory qualities of water services
    10. 10. 12 September 2013 The Invisible Water Utility 10
    11. 11. 12 September 2013 The Invisible Water Utility 11

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