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Letters to Regulatory Directors
RD 04/08 3 April 2008 Dear Regulatory Director Development of consumer experience measures This letter informs you of the new measures of consumer experience that we would like to pilot during 2008-09. Stakeholders told us, at a workshop last year that such measures would be useful. We have been working in consultation with a group of companies and CCWater to develop suitable tools. We intend to pilot and refine the new measures over the next two years so that the industry is in a position to provide robust and comparable data by April 2010. We have recently issued a separate paper(1) on our review of the Overall Performance Assessment (OPA) but envisage that these measures would become a key element of a revised OPA. Background In September 2007 we held an industry workshop to discuss how companies might be incentivised to:
Delegates agreed, in principle, that there was merit in developing new measures to explore and compare the quality of service companies were providing. Following the workshop a working group was formed, comprising a cross-section of water companies(2) and CCWater, to help us develop workable proposals for consumer experience measures which could be piloted during 2008-09. Our work presumed that:
With the working group we have therefore developed two new measures:
Quantitative measure of consumer experience The proposed quantitative measure of consumer experience is a composite model which captures those contacts most likely to have been generated because a company is failing to meet its consumers' expectations. The data elements are:
The proposed composite model attaches different weights to contacts and complaints of differing severities to arrive at a single score (analogous to DG3(5)). Appendix 1 contains further detail on how the different elements are likely to be weighted and how the data will be normalised to enable cross-company comparisons. If we are to attach greater weight to the number of cases accepted for investigation by CCWater, companies will want to be confident that consistent criteria are being applied across CCWater's regions. CCWater will consider this further as the measures are piloted. Data collection during 2008-09 We wish to pilot this measure during 2008-09. This will require all companies to begin collecting information on the number of unwanted telephone contacts and avoidable written complaints. (The data for the remaining two elements is already collected elsewhere(6).) Appendix 2 contains draft reporting requirements, developed in conjunction with the working group. Each company is asked to use its best endeavours to begin collecting data based on these reporting requirements for the period 1 April 2008 to 31 March 2009 as explained below. We appreciate that some companies will find it more difficult to capture data which complies with the new requirements and that time may be needed for system changes. It is possible that experience will expose issues which will require amendments to the definitions. We therefore propose a half-yearly review with companies and reporters in autumn 2008. This will allow us to share experience and best practice and to identify any problems with the reporting requirements or companies' ability to report against them. We will also wish to use this opportunity to understand how companies' systems track the root causes of contacts and, in particular, how companies identify and record repeat or chase contacts (ie those which indicate failure demand). We suggest that each company uses the period April to June 2008 to begin developing appropriate reporting systems before collecting and reporting test data during the next three months July to September. This test data will be collected by Ofwat and used to inform the autumn review. However companies should continue to develop their systems and collect data for remainder of the year. We suggest that each company involves its reporters as it develops reporting systems and prepares for the autumn review. We plan to include the new measures in the June return for 2008-09(7) but will not make company specific information public. During the development phase, companies should use our June return request for clarification process(8) in order to raise any queries on the guidance or definitions included within the draft reporting requirements. This will ensure that any further guidance is seen by every company. Production of robust data During the development phase we do not propose to publish company specific information although we will wish to refer to the work and emerging messages at an industry level. We will allow companies time to set up robust data collection systems. Companies may initially need to use ad hoc / manual systems to report unwanted telephone complaints and avoidable written complaints while exploring suitable changes to IT / automated systems (companies may wish to involve their reporters while exploring suitable system changes). We foresee that the reporting requirements may also require further development during 2009-10. We would therefore expect companies to provide reliable, accurate and complete data for publication and use in the revised OPA from 2010-11 onwards (9). Consumer experience survey Whilst many companies already carry out consumer satisfaction surveys, the scope, scale and approach of these varies considerably. The working group therefore agreed that a common, independent survey would be the most appropriate means of gathering robust comparable data. It is important that all companies are able to have confidence in the results and that the survey adds value for the industry. The existing DG9 telephone call handling satisfaction survey is thought to provide a useful model. We have therefore developed, with the working group, proposals to pilot a survey of those consumers having direct contacts(10) with each water company. It would cover the end-to-end process, from initial contact with the company to resolution of their issue. It would also allow for benchmarking against other sectors, for example by using a net promoter approach. For each company the survey will seek to establish consumers' views on the:
To aid interpretation and add value for companies, the sample is likely to include separate quotas for the following areas of companies' operations:
The pilot project will explore the practical issues involved in collating representative samples at each company and develop and test a suitable survey, which the working group has begun to develop. Costs and procurement We propose that the costs of this work should be shared across the industry in the same way as the DG9 survey. Subject to industry support, we expect to begin the procurement process shortly. The pilot will initially run during 2008-09 with further development during 2009-10. Subject to successful development during the period 2008-10, we expect to include the survey results in our suite of regulatory performance measures for the period 2010 to 2015. We would not expect to publish company specific data before 2010 but results will be available to participating companies. Like the quantitative measure, we anticipate that the survey results would be an important element in a revised OPA from 2010 onwards. We will write to companies shortly about the approach to procuring the pilot. Regulatory burden We will review the range of customer service measures to see if the introduction of these broad measures of consumer experience provide an opportunity to reduce data requirements in other areas. For example, subject to a satisfactory pilot and commissioning of an ongoing survey it may be possible to discontinue the separate DG9 survey or amalgamate it into the wider consumer experience survey. Next Steps We welcome your comments on this pilot of proposed new consumer experience measures. Please send them to sue.cox@ofwat.gsi.gov.uk. Sue Cox is attending the WaterUK Operations Forum on 30 April to talk about these proposals and our direction of travel on the OPA and will be able to respond to comments received before that session. We will write separately to all companies with further information on the proposed procurement process and indicative costs for the proposed consumer experience survey. As the new survey and quantitative measures are developed and established we will need to consider how they should be translated into scores for a revised OPA. We will engage with stakeholders as our work on the OPA develops. Yours sincerely Andrew Dunn Director of Consumer Protection (1) PR09/09, 'Ofwat's review of the OPA and regulation of service to consumers', March 2008. (2) Comprising representatives from Anglian Water, Wessex Water, Thames Water, Yorkshire Water, South West Water, United Utilities, Bristol Water, South East Water, Cambridge Water, South Staffordshire Water, Tendring Hundred Water and Scottish Water. (3)DG9: ease of telephone contact. (4) DG7: written complaints. (5) DG3: supply interruptions. (6) Data on the volume of written complaints escalated to second stage review is collected in table 5A of the June return. Data on the number of complaints accepted for investigation by CCWater is collected by Ofwat on an annual basis as part of the annual OPA calculation. (7) Including them in version 1.0 of the June return reporting requirements in December 2008 (for reporting at JR09). (8) Companies should refer to the 'consumer experience measures' table when submitting clarification queries to our Information Management Team (quality.assurance@ofwat.gsi.gov.uk). (9) We continue to expect companies to report data that is reliable, accurate and complete against the existing reporting requirements whilst these new consumer experience measures are being developed. (10) Initially, the survey is likely to only cover consumers' who have been in direct contact with their water company. It will not cover consumers' general perceptions of the water company or any indirect contacts, such as where a company is undertaking routine maintenance work in the consumer's area which does not lead to a direct contact.  |
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