Water industry regulator Ofwat has commissioned two independent reports on the role of “revealed customer behaviour” in providing evidence to support companies’ business plans.
Ofwat says “revealed customer behaviour” means trying to understand what is important to customers by analysing their actual behaviour. The definition covers both conventional economic revealed preference methods, which rely on behaviour revealed in markets, and more general customer behaviours, such as complaints, that can be observed in relation to water, wastewater and environmental services.
According to Ofwat, this type of analysis means that companies and regulators can use a range of sources of information to help them better understand customer preferences.
The regulator said it had commissioned the independent papers because it wants the water companies to take greater responsibility for their relationship with their customers. In order for the companies to engage effectively with their customers and fully understand customers’ priorities, it was essential that they made use of the appropriate tools and information.
One of Ofwat’s specific concerns at the last price review for AMP5 about companies’ business plans was their over-reliance on the results of stated preference surveys (which rely on choices made in hypothetical scenarios). The regulator wanted to explore the opportunities for making use of information drawn from actual observed customer behaviour to support the companies’ future investment proposals.
Leading on from the reports, Ofwat said it would expect the water companies to make a greater effort to use customers’ actual behaviour in addition to stated preference surveys at the next price review. Companies would also be expected to consider using economic approaches to the analysis of revealed customer behaviour within cost benefit analysis.
The regulator said there are a number of opportunities for companies and other stakeholders to make use of the information revealed by actual customer behaviour when assessing their customers’ priorities.
In summer 2011 Ofwat will set out the approach it intends to adopt for customer engagement at the next price review for the period 2015 to 2020.
Download:
The use of revealed customer behaviour in future price limits
The use of revealed customer behaviour in future price limits – alternative industry structures
Albion Water, the first NAV (New Appointment & Variation) to have been established in1999 and now under the ownership of SDS Water Group, has appointed Andy Holland as its new Director of Business Development.
UK water companies are invited to join an upcoming webinar which will explore how the sector can take indirect potable reuse (IPR) from concept to full-scale operational reality.
James Sumsion, CEO of predictive water intelligence specialists Kohtari, says the water sector needs to take a giant leap forward, so that it can anticipate and act upon water quality issues - rather than merely react.
Ray Moulds, Sales Director at Flood Control International, takes a look at how automated sliding floodgates are supporting secondary containment at water and sewerage company sites.
Hear how Scottish Water has completed its £235 million Ayrshire Glasgow Resilience Project - customers across Greater Glasgow, Ayrshire and East Renfrewshire will now benefit from a more secure and resilient water supply.
Hear how United Utilities is accelerating its investment to reduce spills from storm overflows across the Northwest.
Find out more about the remarkable career opportunities on offer at WSP - scroll down to watch the inspirational video.