All companies need to listen to their customers
For the past two and a half years, I have been the independent Chair of the Customer Challenge Group of South East Water, one of the 18 suppliers of water and sewerage services in England and Wales. Each of the companies has had such a group. Since these companies are local monopolies, they are are regulated by Ofwat which every five years approves business plans of these companies and determines the prices that they can charge for the next five years.
Essentially the role of each CCG has been to satisfy itself that the company had conducted an effective programme of customer engagement and had properly reflected the findings of that engagement in a business plan that was likely to be supported by the company’s customers. It was for then Ofwat to mount the cost challenge to companies’ business plan proposals, assessing how much they need to invest, how much they would have to pay to raise the capital for such investment, and how much they should charge their customers.
It has been a fascinating, but complicated and time-consuming, process and all CCG members have had to work much harder than they imagined when they were appointed in mid 2012. But the end result will be better services and lower prices (in real terms) in 2015-2020 than has been the case in 2010-2015.
As a CCG, we have met about once every two months and, as a CCG Chair, i have spent approximately one day a week on this exercise. We have made three formal submissions to Ofwat: the first on the company’s proposed business plan (ours ran to 108 pages), the second on the regulator’s risk-based review of that business plan (ours was 16 pages) and the third on the regulator’s Draft Determination for the company (this was 15 pages). I sent off the third and last of out submissions this morning, so I am now able to draw breath. I don’t imagine that you’ll want to read these documents but, if you do, you’ll find them here.
For the purposes of this blog, the important point is not what the CCG said so much as that we were there to say it. Of course, there is no substitute for customer engagement and research by a supplier of goods or services, but such research needs to be carefully designed and the findings carefully interpreted. Also, especially in a regulated industry, there are complicated sector-wide arrangements that individual customers cannot be expected to know but a standing customer voice can and must understand. The effective embedding of the CCG inside the company has enabled and encouraged a dialogue on behalf of customers of a detail and frequency that would not have been possible in the past.
This is why, over the last decade or so, I have worked as a consumer advocate and served on bodies like Ofcom’s Communications Consumer Panel, the DCMS Customer Expert Group, Postwatch and Consumer Focus. It is why I have enjoyed being the Chair of the Customer Challenge Group at South East Water. It is why I serve on the External Advisory Board of the mobile operator EE. I am not quite ready to retire …