Water Utility Customer Satisfaction Plunges as Inflation Woes Increase

What the Latest J.D. Power Study Tells Us and What You Can Do About It

After more than two years of a pandemic and resulting inflation, it may not come as a surprise that a six-year streak of improving or maintaining customer satisfaction with residential water utilities has come to an end, according to the J.D. Power 2022 U.S. Water Utility Residential Customer Satisfaction Study.

As J.D. Power notes, “Rate relief efforts put in place during the pandemic came to an end just as the forces of inflation have driven a significant increase in the monthly bills of residential customers. As a result, customer satisfaction declined in every factor of the study.”

The most comprehensive “voice of the customer” study of its kind is in its seventh year measuring customer satisfaction among customers of 90 utilities serving at least 400,000 customers. Overall satisfaction is measured by examining 33 attributes in six categories: quality and reliability; price; conservation; billing and payment; communications; and customer service. The 2022 study is based on the responses of 33,054 residential water utility customers conducted in four waves from June 2021 through March 2022.

The 2022 study marks the first time that customer satisfaction declined since 2016. Prior to the pandemic, respondents in the 2019 study reported that, among other things, concern about water quality issues was steadily improving, which had a positive effect on customer satisfaction. In 2021, a combination of major regional service interruptions, significant uptick in water consumption, higher utility bills, and a lack of effective communication during the pandemic did not drive satisfaction down, although it remained flat, unchanged from 2020. What’s different this year?

Key Findings of the 2022 Study

• Customer satisfaction goes down the drain as the prices they pay for everything—not just water service—rise. The decline in overall customer satisfaction coincides with a $5.73 increase in the average monthly bill amount versus 2020. Importantly, that cost increase does not correspond with a significant increase in water usage seen in 2021 when a largely home-bound customer population was consuming more water than ever.
• Declines were observed in every factor, but most pronounced in the areas of communications and price. Notably, among those customers who receive a bill, only 35% said they recalled hearing about a rate increase by their water utility.
• Digital communications and customer service is more important than ever. Overall satisfaction scores are highest when customers recall receiving a proactive electronic communication from their water utility. Likewise, the number of customers using digital channels to access customer service increased 43% from 2019 and customer satisfaction is highest when interacting with customer service digitally.

What the Findings Tell Us

Research, surveys, and studies from credible sources like J.D. Power help identify emerging trends and shifts in the industry and your environment. Utilities and public agencies that understand their customers’ attitudes, behaviors and preferences are more equipped to respond, innovate, and pivot in ways that build trust, garner support for rate increases and infrastructure projects, and increase overall customer satisfaction.

The water industry faces ever-increasing needs for infrastructure investments, making communication imperative. Public outreach is critical for utilities when they need to inform consumers about rate changes, water supply issues, and gain stakeholder feedback. It’s worth repeating: Customer satisfaction declines were most pronounced in the areas of communications and price.

Communications is your silver bullet to building trust and garnering support, but are you communicating or merely informing? Well-known American journalist Sydney J. Harris (1917-1986) wisely said, “The two words ‘information’ and ‘communication’ are often used interchangeably, but they signify quite different things. Information is giving out; communication is getting through.”

If you’re about to start a rate study and increase rates in the next 6-18 months, there are several things you can do right now to successfully communicate, build or restore trust, and ensure a successful rate increase.

1. Materials Makeover: Your messaging, materials and website may need a touch up or makeover. Review your materials for accuracy, comprehension, consistency, and accessibility. Use color and infographics to reduce wordy, lengthy text and help customers understand complex concepts. Develop a messaging framework to guide key talking points and avoid industry jargon, acronyms and engineer-speak that most consumers don’t understand. Communicate rate increases in dollars and sense instead of percentages and demonstrate value.
2. Community Visibility: Increase opportunities to engage customers in the community where they already are. Sponsor exhibits and demonstrations at your local science and technology museum. Host a booth or table at local events, farmer’s markets, the county fair, health fairs, gardening shows, etc. Provide handouts that are more likely to be read by using color, infographics, and that can fold or fit in a pocket or handbag.
3. Open House: Open your facility to the public and show off your hard work. Open houses give customers and other stakeholders an opportunity to learn more about your operations in a relaxed setting. When you table at events, create an experience, be sociable, have fun, offer refreshments and handouts, and highlight maps and key projects on oversized display boards. Videos and presentations can be shown on a loop for casual viewing or with a moderator.
4. Facility Tours: To help the public understand how revenues are used and why rates are increasing, offer tours of your infrastructure, demonstrate technology and systems in operation, and highlight your expert staff. Due to safety concerns during the pandemic, many utilities successfully offer virtual tours using video, infographics, photos, and audience Q&A. Start an interest list now for a quick transition back to in-person walking and bus tours when COVID-19 restrictions are lifted.
5. Speaker’s Bureau: Develop a list of community, civic, and business organizations that host meetings. They are usually in need of special guest speakers to fill their programs. Armed with your dynamic presentation materials and an engaging, informed presenter, you’ll begin to build trust and rapport with community members who tend to be more engaged in local issues and focused on community building. They often become influencers on your behalf. Change is generational, so presentations to K-12 students is another opportunity to make an impact. If you make a good impression, it’s likely to be a topic at the family dinner table.

Timely, effective, and two-way communication with stakeholders is critical for developing and maintaining trust. Successfully collecting and analyzing customer insights will aid you in making data-informed decisions and increase opportunities to eliminate barriers and engage customers. But it can’t only happen when you raise rates or suffer a notice of violation.

Building and maintaining trust and credibility happens over time and we can never rest because as the Dutch proverb says, “Trust comes by foot and leaves on horseback.” In 2022 the horse is a Mustang GT V-8. Take heart in knowing those who’ve built the relationship will have an easier, quicker recovery than those who don’t.

About Raftelis’ Strategic Communications Practice

Raftelis’ strategic communications team members are all accredited in public relations and have spent decades in municipal and utility communication, both as consultants and as leaders of communications and public affairs programs for large and small local governments and utilities across the country.

We specialize in strategic communication counsel, public engagement, and community involvement, and can provide the guidance, structure, strategies, and tactics to help make your new revenue request, program, or infrastructure project successful by avoiding costly delays and reputational crises. Learn more about Raftelis’ Strategic Communications practice.

About the 2022 U.S. Water Utility Residential Customer Satisfaction Study:
The U.S. Water Utility Residential Customer Satisfaction Study measures satisfaction among residential customers of 90 water utilities that deliver water to at least 400,000 customers and is reported in four geographic regions and two size categories. For more information about the U.S. Water Utility Residential Customer Satisfaction Study, visit the J.D. Power website.