Room for Improvement in Water Utility Industry

July 1, 2018
The water utility industry has a major opportunity to engage more effectively with its customers by using communication strategies that enable self-service and establish more intimate customer relationships.

By Andrew Heath

The water utility industry has a major opportunity to engage more effectively with its customers by using communication strategies that enable self-service and establish more intimate customer relationships.

This will, however, require the industry to reevaluate its commitment to the customer experience and undertake initiatives to catch up with best practices that have been embraced by a growing number of industries — as well as by many leading players in the electric and gas utility sectors.

This core conclusion from the J.D. Power 2018 Water Utility Residential Customer Satisfaction Study is a window to the state of the customer experience in this critical sector of the economy. While the study finds that billing and payment services have improved, it is still clear that water utilities are struggling to keep up with consumers’ growing expectations for customer service.

This is a shortcoming that can carry serious consequences. Most significantly, a failure to pay attention to customer experience management exposes water utilities to the risk of losing support from consumers when the time comes to raise capital to fund infrastructure improvements.

Missed Expectations

Improvements that are being made by other segments of the economy — such as retail and entertainment — have elevated customer expectations for digital customer experiences.

To attract and retain customers, these industries are making major investments in efforts to better understand and serve the needs of their customers by establishing new and more consistent lines of communications that are tailored to consumer preferences.

In this context, water utilities are unfortunately among the lowest performers across all those industries. More importantly, the study notes a decline over the last 12 months in customers’ perceptions of service quality when customers reach out on the phone or online to ask specific questions.

Proactive Communication Key to Water Utility Customer Satisfaction

The water utility industry has an opportunity do a better job of letting customers know what is going on and what is being planned to improve services. This is because water utilities have a willing and interested consumer base that is largely passionate about water issues: including water quality and conservation.

When customers are aware of their utility’s conservation programs, conservation satisfaction scores leap to 711 vs. 561 among those who have no awareness. Likewise, awareness of the utility’s efforts to improve the environment is associated with a conservation satisfaction score of 785 vs. 634 as compared with those who are unaware of such efforts.

Communication in times of crisis is another area in which the water utility industry could stand to improve. J.D. Power completed this year’s water utility study at the end of 2017, shortly after devastating hurricanes hit Texas and Florida. We were able to see how the response to these dramatic events varied across the different utility industries.

What we found is that leading players in other utility industries have clearly learned lessons from previous storms. Many electric utilities, for instance, put a lot of effort into telling their customers as much as they could about when power would be restored and what was being done to remediate storm damage.


The water industry faces ever-increasing needs for infrastructure investments, making customer support imperative. Water utility companies need to stay up to date regarding their customers’ needs and expectations. Utilities that understand customer attitudes, behavior and preferences are better able to target performance improvement initiatives that can increase overall customer satisfaction and garner support for infrastructure improvements.

Understanding the voice of the customer — both in terms of what specific factors drive negative sentiment and which are most closely associated with positive performance — will be central to water utilities’ ability to achieve the customer support necessary to support the improvements they need. WW

About the Author: Andrew Heath is senior director of J.D. Power’s Utility Practice. To learn about the professional services that Heath is leading to develop better customer engagement strategies in the water utility industry, visit

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