Part 3: Customer service

Watercare Services Limited: Review of service performance.

In this Part, we discuss aspects of Watercare’s customer service. We cover:

Customer service team

Watercare's customer service team is often the first point of contact for all of Watercare's customers. Watercare's customer service team has 61.5 full-time equivalent staff. There are two main teams in the customer service team:

  • the contact centre team; and
  • the issue management team.

Figure 5 shows the structure of Watercare's customer service team.

Customer contact centres are important for helping shape the relationship between organisations and their customers. This relationship is essential to providing good customer service.

Watercare's contact centre receives about 2000 telephone calls, emails, and letters every day, from an estimated customer base of 1.4 million people. During 2012/13, the contact centre answered an average of about 39,000 telephone calls each month.

Most of the calls made to Watercare from its customers during 2012/13 were about billing (see Figure 6).

Figure 5
Structure of Watercare's customer service team

Figure 5 Structure of Watercare's customer service team.

Source: Watercare.

Figure 6
Calls made to Watercare's contact centre by call queue name, 2012/13

Figure 6 Calls made to Watercare's contact centre by call queue name, 2012/13.

Source: Watercare.

Watercare has identified that the current challenges for its customer service are:

  • governance of customer service as an organisation-wide capability;
  • inefficient end-to-end customer processes;
  • inadequate technology support; and
  • inconsistent customer experiences.

Watercare is preparing and implementing a comprehensive three-year business change programme to review and improve its service processes and capability.

Communication with customers

Watercare has some good systems and information tools to help it provide customers with accurate advice and information. Watercare is aware that it needs to make changes to further improve its communication with customers.

We expected Watercare to have effective systems to help it communicate with customers to help them access Watercare's services. Successful customer service requires that customer service staff provide consistent and accurate information that meets customers' needs.

Watercare has redesigned its internal staff knowledge base to help improve service communications. Knowledge bases can give staff timely access to information to help them assist customers. Knowledge bases can also fill gaps in institutional knowledge when experienced staff leave.

In our view, Watercare's knowledge base is easily accessible, up to date, clear, and concise. It helps all Watercare staff to respond to customer queries. Watercare has a sound and transparent process for updating this knowledge base. It also has processes to find out how staff use the knowledge base, which should help it make improvements to the knowledge base.

When they communicate with customers, Watercare contact centre staff do not generally rely on standard scripts, although scripts are available on Watercare's knowledge base if needed. For example, Watercare needs to comply with standards for credit card payments so there are scripts for dealing with these. Although we consider the use of scripts to be good practice, not using scripts can mean that Watercare contact centre staff are more flexible in their interactions with customers and more responsive to customers' individual circumstances.

Watercare has identified that there is inconsistency in its communications with customers. To address this, Watercare is working on improving capability by refocusing and redesigning its customer communication processes as part of a business change programme.

In our view, Watercare has a good variety of relevant channels to inform staff of any changes to Watercare's services or other relevant changes. These channels include a bulletin board on the knowledge base, emails, and team meetings.

Watercare's asset and billing system (known as Hansen) is outdated and needs to be replaced. Watercare has plans to address this as part of its business change programme.

Watercare initially thought of Hansen as a short-term solution. However, Watercare staff told us that work to replace Hansen was delayed because of other work programme commitments. Watercare's new Customer, Billing and Asset Programme is now under way, with the objective of replacing Hansen as soon as possible. We saw that Hansen can be impractical and inflexible for contact centre staff to work with when dealing with customers.

Self-service options

Customer contact centres are increasingly likely to be the main point of incoming and outgoing communications in a typical water utility in the future. However, less of this communication will be voice-based. Watercare has expanded its self-service options to reflect this.

Watercare's current self-service options began in June 2012 with the aim of giving customers more choice in how they interact with Watercare. Watercare's self-service involves increasing ways for customers to pay online (credit card and direct debit) and increased access to account information. Watercare tested its self-service options before making them available to customers, and staff received training in preparation for this.

We consider that Watercare's self-service options are a good initiative. Self-service options should help make it easier for customers to engage with Watercare in the manner they choose.

There is scope for the uptake of Watercare's self-service options to improve. Watercare told us that about 10% of its customers have signed up to self-service since it began. About 10% of those customers have since deregistered.

Staff told us that, to increase the use of self-service options, Watercare has plans to publicise these options more widely and make them more attractive to customers.

Staff also told us that Watercare is aiming to improve its self-service customer communication options. For example, Watercare wants to be able to send text messages with billing information in the future. Watercare expects that it will achieve this when it replaces Hansen.

Handling of complaints

To ensure that they handle complaints well, organisations should:

  • make it easy to complain;
  • recruit and train necessary staff;
  • keep customers informed;
  • keep clear records;
  • deal with complaints quickly and fairly;
  • aim to resolve complaints satisfactorily; and
  • monitor the complaints-handling process.

Figure 7 shows the kinds of complaints that Watercare receives. Most of these complaints are about charges, billing or invoice information, and leaks.

Figure 7
Complaints received by Watercare, 2012/13

Figure 7 Complaints received by Watercare, 2012/13.

Source: Watercare.

In our view, Watercare makes it relatively easy for its customers to make a complaint. Watercare clearly indicates on its website where to find its complaints-handling procedure and how that procedure works. Watercare's complaints policy involves three steps:

  • The customer contacts Watercare and receives a response within 10 working days.
  • If that does not resolve the issue, mediation or arbitration can be used.
  • If further resolution is required, more formal proceedings can be initiated.

Watercare does not ensure that the entire process is free – its telephone number is not an 0800 number. This could mean that customers who do not have landlines could find it difficult to make a complaint. However, Watercare does have other ways for customers to contact it.

Watercare's customer contract also states that Watercare will "usually" share any costs involved in any mediation or arbitration. In our view, Watercare could helpfully clarify when this would apply, to make it as easy as possible for customers to complain.

We consider that Watercare has enough channels through which customers can make a formal complaint. The channels through which a customer can make a complaint are in person, in writing, by fax, by email, by telephone, or through Watercare's website.

Watercare is improving the way that it deals with issues and complaints and has set up an issues team (see paragraph 3.2). Watercare wants to deal with complaints more quickly and decisively and before they escalate. This new approach is part of a wider framework for managing customer issues and complaints within Watercare.

Watercare created this new approach because of frequent contact from the same customers. In 2012/13, 40% of complaints needed escalation. This meant that a complaint was handled a second time because the customer was not happy with the first answer and wanted to discuss their concern with a manager.

The main aims of the issues team are:

  • delivering quality;
  • providing efficiency; and
  • continuous improvement.

Watercare told us that this team does not deal with all complaints. Rather, complaints dealt with through the new approach are recurring and historical complaints.

Continuous improvement

Watercare engages in continuous improvement to improve the services it provides. However, Watercare is still in the early stages of implementing its complaints analysis process.

We expected Watercare to use the information it gains from handling complaints to improve its service performance. Information about complaints can highlight service failings that need to be remedied and reveal problems and trends that management can act on.

Watercare recognises that recording and analysing customer feedback is critical to assess how well the company is performing and to identify areas for improvement.

Watercare has recently begun to analyse complaints through its new issues team. This analysis is still in its early stages and is currently limited by Watercare's technological capabilities.

Despite this, we consider that Watercare generally engages in continuous-improvement practices. There are several examples of where Watercare has initiated reviews or changed its service delivery to better cater to its customers' needs and expectations:

  • Feedback from customers indicated that they did not understand some aspects of Watercare's contact centre's authorisation processes. In response, Watercare is reviewing and updating its authentication and validation processes to clarify them for both contact centre staff and customers.
  • Watercare's internal and external processes for customers on dialysis are also currently under review to ensure that they are appropriately updated.
  • Customer feedback indicated that Watercare should enhance its electronic billing format. Watercare was already carrying out work on an enhanced electronic billing system for visually impaired customers. Watercare also consulted with the Royal New Zealand Foundation of the Blind to better understand the needs and requirements of its visually impaired customers. This new billing template is now available to any Watercare customer who opts to receive their monthly invoice through the electronic billing method.
  • User feedback led to Watercare altering its position on wastewater charges for people who use rain tanks. Historically, customers could not attach water meters to their rain tank and Watercare charged them a fixed annual fee for wastewater usage. Customers can now attach a water meter to their rain tank. This means they pay for the amount of wastewater they discharge, based on the volume of water that flows through their water meter.

Staff development

To best cater to its customers' needs, Watercare needs skilled staff. Given this, we looked at how well Watercare manages its customer service capability. As part of its change programme, Watercare is aiming to improve the skills of its frontline staff.

Watercare has redesigned its internal staff knowledge base to better enable customer service staff to access information and to improve the customer experience. The knowledge base has also replaced all printed training manuals to ensure that all training material is as up to date as possible.


We consider that Watercare has a good focus on staff development. Watercare staff told us that there is an extensive staff development programme at the Watercare contact centre. Staff also told us that Watercare has been adjusting its induction process to ensure that it is fit for purpose, particularly in relation to changes, such as the move to monthly billing.

Watercare is taking further steps to improve the skills of frontline staff through training to ensure that their knowledge is up to date and consistent. Contact centre staff have recently received refresher training on faults, billing, and meter reading.

External reporting about performance

External reporting serves the interests of public accountability. It also provides a way of showing how an organisation is meeting its commitment to service. Internal reporting against performance measures and standards can help staff to focus on key performance areas.

Watercare's customer service commitments intend to give customers a clear understanding of the service that they can expect from Watercare. Given this, we expected Watercare to meet its customer service performance targets.

Overall, we consider that Watercare performed well against most of its customer service performance targets for 2012/13.

Watercare exceeded its internal performance target for its abandonment rate – that is, the percentage of callers who hang up before a contact centre staff member answers. Watercare has an abandonment rate of 2.7% for 2012/13. This is below its internal key performance indicator threshold of 3%.

Watercare also demonstrated a high level of performance against its targets for complaints and inquiries. Watercare has a performance target to resolve 95% of all inquiries and complaints within 10 days. In 2012/13, Watercare received 41,236 inquiries. Of these, 5.2% (2142) were complaints. Watercare exceeded its performance targets for both inquiries and complaints, with 99.3% of inquiries resolved within 10 days and 97.2% of complaints resolved within 10 days.

As well as service complaints, Watercare receives feedback and complaints about water quality. In 2012/13, Watercare received 1891 water quality complaints. This equated to 4.6 complaints for every 1000 customers, which is below Watercare's target of 5.0.

Figure 8
Water quality complaints against target, 2012/13

Figure 8 Water quality complaints against target, 2012/13.

Source: Watercare.

Watercare aims to keep unplanned water supply interruptions to a minimum. It has an annual target of fewer than 10 interruptions for every 1000 households. In 2012/13, there were 2141 interruptions to the north and south of the region. This was an average of 7.7 interruptions for every 1000 households in those areas. Data on the central area is not reported for 2012/13 because of changes to the maintenance contract at the start of the year.

Watercare aims to restore service within five hours in 95% of all unplanned shutdowns. During 2012/13, service was restored within five hours in 96.7% of unplanned shutdowns.

Watercare narrowly missed its grade-of-service performance target for 2012/13. "Grade of service" is an industry best-practice performance measure aimed at measuring how easy it is for callers to have their calls answered. During 2012/13, the grade of service target of 80% of calls answered within 20 seconds was not met. Watercare told us that this was because of an increased number of calls about the unified tariffs and the move to monthly billing, which was implemented on 1 July 2012. Watercare's overall performance was 79.7%.

Although we recognise that call-handling efficiency is important, we consider that call quality should be prioritised. Therefore, although Watercare did not meet its internal performance target for its average call-handling time for 2012/13, we do not consider that this is critical to overall service performance. Watercare's internal target for average call-handling time is 270 seconds. Watercare's actual average call-handling time in 2012/13 was 298.1 seconds. Watercare staff told us that they agree that quality – rather than timeliness – in call-handling should be prioritised.

Further information about Watercare's service performance can be found in Watercare's annual report.

Accuracy and clarity of performance reporting

It is important that Watercare is accountable for its performance. Watercare provides external reporting in its annual report and new Global Reporting Initiative report.

We consider that Watercare generally measures its service performance well. However, there is one significant instance where Watercare could improve its measuring system to best reflect what it has achieved. This example also connects with other aspects of Watercare's performance reporting that could be improved.

A key performance measure for Watercare is customer satisfaction with water and wastewater services. We consider that this measure does not accurately portray customer satisfaction for four main reasons:

  • Watercare measures the average overall score of all customers surveyed, rather than the number of satisfied customers.
  • Watercare does not report its "headline performance". Rather, Watercare reports its performance as the percentage of the target achieved.
  • Watercare surveys customers about faults calls only, which make up a small proportion of all calls that the contact centre receives.
  • Watercare highlights its overall score for its customer satisfaction focus area as the total score of the percentages achieved against each target in the customer satisfaction section.

Measuring customer satisfaction

For 2011/12, Watercare's measure of customer satisfaction was based on the percentage of satisfied customers. A customer was regarded as being satisfied when, in Watercare's customer satisfaction survey, they scored Watercare at least a 7 out of 9. This is reflected in Watercare's Annual Report 2012 (see Figure 9).

For 2012/13, Watercare measured customer satisfaction by the average overall score of all customers surveyed rather than the actual percentage of customers surveyed.5

For example, the overall average score of all customers surveyed for 2012/13 was 7.3 out of 9. This equates to a score of 81.4%, which means that Watercare's performance target of 80% was exceeded. This is set out in Watercare's Annual Report 2013 (see Figure 10).

However, if Watercare had reported its performance based on the number of customers who were satisfied, rather than the surveyed customers' average scores, the result would be lower. Our analysis shows that 78.3% of Watercare's surveyed customers scored 7 or more in 2012/13 and would be described by Watercare as satisfied with Watercare's performance.

In our view, Watercare's currently methodology could provide an inaccurate picture of customer satisfaction rates. We consider that Watercare should review its methodology to provides an accurate picture of customer satisfaction rates. Watercare told us that its research company believes there is nothing wrong with the methodology it uses.

Reporting performance as a percentage of the target achieved

It is important that Watercare clearly reflects its performance in its accountability documents so that a customer can easily understand how well Watercare is performing.

Watercare uses "performance rulers" in its annual report to report performance. These are likely to confuse a reader. For example:

  • If Watercare scores more than its performance target, it reports its performance as greater than 100%.
  • If Watercare meets its target, it reports its performance as 100% when its actual performance might not be 100%.
  • If Watercare scores less than its target, this is represented as a percentage of the target met.

Figure 9
Customer satisfaction rate against service target, 2011/12

Figure 9 Customer satisfaction rate against service target, 2011/12.

Source: Watercare

Figure 10
Customer satisfaction rate against service target, 2012/13

Figure 10 Customer satisfaction rate against service target, 2012/13.

Source: Watercare

We have illustrated some of these practices in the examples shown here.

The first example shows that Watercare had a target of resolving 95% of complaints within 10 days and resolved 97.2% of complaints within 10 days. That is a good result. However, Watercare shows that it exceeded a 100% performance standard (see Figure 11).

In our view, Watercare should report the 97.2% figure as its "headline" performance.

Another example relates to Watercare's grade-of-service measure. Watercare's target grade of service was 80% and actual performance was 79.7%. This means Watercare did not meet its target. However, Watercare recorded that it had achieved a performance standard of 99%, based on it achieving 99% of its target (see Figure 12).

In our view, this way of representing service performance against performance targets does not accurately reflect Watercare's performance. It does not clearly show whether Watercare has met its commitment to service. Although the detailed information presented is accurate, the headlines could be considered misleading.

We consider that Watercare should more clearly reflect what it has achieved against its performance targets. In particular, we consider that Watercare should highlight its actual performance levels.

Surveying customers only about faults calls

Watercare could usefully consider expanding the range of customers it surveys for its customer satisfaction performance measure, to more meaningfully measure customer satisfaction with its service.

In our view, Watercare does not sample a wide enough range of customers to meaningfully reflect customer satisfaction. Watercare measures customer satisfaction with water and wastewater services in relation to faults calls only. Faults calls made up only about 13% of the total number of calls that Watercare received in 2012/13.

We suggest that Watercare increase its engagement with its customers on their satisfaction with customer service and with Watercare in general.

Figure 11
An example of Watercare’s performance reporting from its Annual Report 2013

Figure 11 An example of Watercare’s performance reporting from its Annual Report 2013.

Source: Watercare

Figure 12
An example of Watercare’s performance reporting from its Annual Report 2013

Figure 12 An example of Watercare’s performance reporting from its Annual Report 2013.

Source: Watercare

Watercare's overall customer satisfaction score

Watercare presents its overall score for customer satisfaction as 99%. Watercare determines this figure by adding up the percentages of the targets it achieved for each of the four performance measures in its customer satisfaction focus area and averaging this number.

In practice, this means that Watercare has added three performance percentages of greater than 100% and one instance of percentage performance of 99%. Watercare has then divided that number by four to equal roughly 99%. We have already questioned the relevance of these performance percentages. We consider that an overall score for customer satisfaction that is worked out by using these percentages serves only to create further confusion and unreliability.

Internal processes for reporting about performance

In our view, Watercare has good processes for internal reporting against its performance measures. There are daily, weekly, and monthly customer service reports, which include contact centre performance measures and issues that Watercare circulates up to a senior management level. We consider these satisfactory. They cover risks and issues, and Watercare consistently reports these issues throughout the different reporting levels.

Watercare has confidence in the reliability of the information in the customer service reports. We found no issues of accuracy other than the measurement of customer satisfaction performance and subsequent reporting of this.

Comparing service levels with international standards

We expected Watercare to find opportunities to learn from comparable organisations or processes to seek continuous improvement. There are no formally accepted standards for designated customer service levels in this area. However, Watercare's customer service performance targets are largely consistent with those of other utility companies:

  • Watercare's target for the grade of service level compares well to international indications of grade of service level targets, which are that 80% of calls are answered within 20-30 seconds.
  • The target that Watercare has set for customer satisfaction also compares well with international standards. (We have already noted that Watercare could increase its sample size when measuring customer satisfaction).
  • Because of a significant variation across jurisdictions, and a trend of moving away from this measure, we could not reach a conclusion on average call handling service levels. Many organisations highlight quality, rather than quantity.
  • Watercare's call abandonment service level compares well against international standards, which range from about 5% to 8%.
  • Watercare's customer service levels for inquiries and complaints are in line with international benchmarks for a response within 10 days.
Recommendation 2

We recommend that Watercare Services Limited improve the accuracy of how it reports its service performance by:

  • reporting the number of customers who are satisfied with its performance levels, rather than reporting average customer scores;
  • reporting actual performance, where appropriate, rather than reporting the percentage of a target achieved;
  • increasing the size and nature of the sample for its customer satisfaction surveys; and
  • reviewing its water affordability measure to keep the measure relevant and meaningful.

5: Watercare also used this method for its 2010/11 reporting.

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