AMP7: putting the customer centre stage
2020 marks the beginnings of a new chapter for clients and contractors in the water industry with the start of AMP7, the next regulatory period. By Matt Cannon, chief executive, Clancy Group.
AMP7 aims to place efficiency, customer experience and innovation at its heart to better meet the changing needs of customers and to build a more resilient network.
Excellent customer experience will become a key success criterion for water companies and contractors under AMP7. Ofwat’s customer measure of experience (C-MeX) will be based on the result of two customer satisfaction surveys (a survey of customers who have contacted their water company and a survey of customers selected at random). C-MeX, which replaces the Service Incentive Mechanism (SIM), has the power to shape end-user perceptions of water companies, with each subsequently being ranked annually based on their C-MeX score.
This comes at a time when next-day delivery, ‘click and collect’ and 24-hour customer support in the retail sector have shaped our expectations as consumers of customer experience.
It has become a given that services should be provided with a more compelling customer experience, and this ‘Amazon effect’ has undeniably now spread across all areas of society and business.
Against this backdrop C-MeX will test the delivery of water companies and their supply chain, including contractors. There are opportunities available to those who deliver the highest C-MeX scores, for instance, there will be fiscal rewards awarded for strong performance. Whereas, water companies will face penalties should they find themselves at the foot of the league table. The top three performers will receive a payout of 1.2 per cent of residential retail revenues annually. While the poorest performing will be hit with a 2.4 per cent underperformance payment.
What does this mean for clients and our industry?
First, it calls for a greater understanding of customer outcomes from all parts of the supply chain. There is a requirement for water clients to set out a clear vision of the expected outcomes and ensure that everyone in the wider supply chain recognises how they support programme success.
Enlightened supply chain management will be essential as will collaborative working.
Second, we all need to consider how we can improve our delivery for customers. There are clear customer service obligations for companies like Clancy and we take those obligations seriously.
The reality is that our direct delivery teams are visible when on site and are brand ambassadors. For example, if traffic management is set up badly or our teams are not considerate of site neighbours, that could be a customer’s most memorable experience, and it could directly influence a company’s C-MeX score.
Training on enhancing delivery for customers is pivotal to C-MeX’s success. Contractors act as the on-site face of a project. Schemes such as Clancy’s accredited Institute of Customer Service ‘Ambassador’ programme provide operatives with the skills they need to balance project delivery with brand representation. Existing programmes will require revamping to meet the demands of AMP7, but collaboration between contractors and clients can create tailored schemes that deliver positive outcomes for all involved.
Third, we need to banish that tired expression ‘right first time’ – this should be a given rather just than an ambition. Do you ever hear retailers using this phrase?
Under AMP7, innovation and technological advances will also be central to enhancing customer experience. Digital tools will be a game changer for leakage detection, an area where Ofwat is expecting to see a demanding 15 per cent reduction between 2020 and 2025. Experience tells us that it can cost water companies in a typical region of England or Wales up to £10 million annually in workforce resource alone to investigate leakage, while causing dissatisfaction among customers who may face disruption to their water supply.
Tools such as those under development by Clancy alongside technology partner Dootrix using Microsoft’s Azure platform, will help to cut financial costs through more effective machine learning. This will eventually allow us to respond to and identify leaks quicker and fix them more efficiently. As the end-user of leakage detection systems, contractors are in many ways the linchpin for the technology partnerships the water industry needs to embrace. AMP7’s far ranging requirements will be testing for clients and contractors. However, the start of this next period represents an excellent opportunity to embed innovation and develop collaborative partnerships which place customer experience at the fore.
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