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The Invisible Water Corporation



Peter Prevos
PhD Candidate, School of Business
Manager Land Development, Coliban Water
Value Proposition
    VicWater (2011)
     Strategic Vision for
     Water Management
        “The 'value proposition'...
         needs to be defined and
         communicated to
         customers”



                                                 Water corporations often communicate
                                                 the value proposition through
                                                 technological achievements.
14 September 2012        The Invisible Water Corporation                           2
Benchmarking of Water Services
    ESC proposed
     performance indicators
        Random selection of
         targets
        What is perfection?
    Research into water
     service quality
        Invisible Water Corporation
        SERVAQUA



14 September 2012          The Invisible Water Corporation   3
Service Quality
    Value
         Perceived benefits
         minus perceived cost
    Quality
         Meeting specifications
    Satisfaction
         Comparison with
         expectations                         Complaining about high water bill.
                                              Source: neptunetg.com



14 September 2012       The Invisible Water Corporation                            4
Consumer Benefits
    Needs
         Physiological
         Sociological
         Psychological
    Wants
         Raw water                        Gardening is an activity that covers all
                                          types of needs – from physiological
         Potable water                    (movement, food) to providing a sense of
                                          self actualisation.
         Recycled water


14 September 2012         The Invisible Water Corporation                            5
Consumer Cost
    Monetary
    Psychological
    Sociological
    Time


                               Women in Ethiopia carry water from a lake back
                               to their homes. The time spent hauling water
                               can be significant in areas where sources of
                               domestic water supply are limited. Source:
                               waterencyclopedia.com

14 September 2012    The Invisible Water Corporation                        6
Marginal Utility
    Perceived value is
     determined by
     marginal utility
         Least important value
         to a consumer
    Water
         Life sustaining
         Waste transportation                   The marginal utility for water is low
                                                because its lowest utility is flushing it
                                                down the toilet.



14 September 2012          The Invisible Water Corporation                                  7
Consumer Involvement
    Water and sanitation
     are considered low
     involvement services
         Increases as
         perceived level of
         certainty of supply
         decreases
         No empirical
         validation of this                     During the drought, many customers
         claim                                  spent large amounts of time and money
                                                to retain the ability to use water.



14 September 2012         The Invisible Water Corporation                          8
Water & Sanitation Services
    Core services
    Facilitating services
        Needed for service
         delivery (grey)
    Enhancing services
        Extra value (white)
    Focus on core
     services
                                           Lovelock’s Rose of Service applied to
                                           water corporations.

14 September 2012       The Invisible Water Corporation                            9
Customer Satisfaction
    Overall Satisfaction
        Overall valuation of
         the service portfolio
    Moment of Truth
        Interaction with
         service provider
        Expectations of
         outcome                               Every time a customer opens a tap,
                                               flushes a toilet or contacts the water
        Satisfaction, neutral                 corporation constitutes a moment of truth.
         or dissatisfaction

14 September 2012          The Invisible Water Corporation                           10
Overall Satisfaction
    The sum of
     transaction specific
     satisfaction
    Other influences
         Public image
         Trust in corporation            The drought and subsequent restrictions
                                         have a large impact on overall customer
    Existing models                     satisfaction.

         SERVQUAL
         SERVPERF

14 September 2012       The Invisible Water Corporation                            11
Transaction Specific Satisfaction
    Core Services
         Network reliability
         Water quality
    Facilitating services
         Minimise phone calls
         Easy to understand
                                         Burst in Kangaroo Flat. Water supply
         bills                           disruptions cost customers additional time.
                                         bendigoadvertiser.com.au
         Self serving website


14 September 2012        The Invisible Water Corporation                           12
The Invisible Water Corporation
    Minimise consumer
     time investment
    Service quality ideal
         No water disruptions
         No water restrictions
         No boiled water
         notice                             A boiled water notice is a service failure
                                            as it requires consumer more time to use
                                            water.
         No phone calls



14 September 2012         The Invisible Water Corporation                            13
Further Research
    SERVAQUA
         Model for water and
         sanitation service
         quality
              Time utility
              Consumer perspective
    Pilot study
        Validate model
        www.prevos.net/water


14 September 2012           The Invisible Water Corporation   14
Questions?

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The Invisible Water Corporation

  • 1. The Invisible Water Corporation Peter Prevos PhD Candidate, School of Business Manager Land Development, Coliban Water
  • 2. Value Proposition  VicWater (2011) Strategic Vision for Water Management  “The 'value proposition'... needs to be defined and communicated to customers” Water corporations often communicate the value proposition through technological achievements. 14 September 2012 The Invisible Water Corporation 2
  • 3. Benchmarking of Water Services  ESC proposed performance indicators  Random selection of targets  What is perfection?  Research into water service quality  Invisible Water Corporation  SERVAQUA 14 September 2012 The Invisible Water Corporation 3
  • 4. Service Quality  Value Perceived benefits minus perceived cost  Quality Meeting specifications  Satisfaction Comparison with expectations Complaining about high water bill. Source: neptunetg.com 14 September 2012 The Invisible Water Corporation 4
  • 5. Consumer Benefits  Needs Physiological Sociological Psychological  Wants Raw water Gardening is an activity that covers all types of needs – from physiological Potable water (movement, food) to providing a sense of self actualisation. Recycled water 14 September 2012 The Invisible Water Corporation 5
  • 6. Consumer Cost  Monetary  Psychological  Sociological  Time Women in Ethiopia carry water from a lake back to their homes. The time spent hauling water can be significant in areas where sources of domestic water supply are limited. Source: waterencyclopedia.com 14 September 2012 The Invisible Water Corporation 6
  • 7. Marginal Utility  Perceived value is determined by marginal utility Least important value to a consumer  Water Life sustaining Waste transportation The marginal utility for water is low because its lowest utility is flushing it down the toilet. 14 September 2012 The Invisible Water Corporation 7
  • 8. Consumer Involvement  Water and sanitation are considered low involvement services Increases as perceived level of certainty of supply decreases No empirical validation of this During the drought, many customers claim spent large amounts of time and money to retain the ability to use water. 14 September 2012 The Invisible Water Corporation 8
  • 9. Water & Sanitation Services  Core services  Facilitating services  Needed for service delivery (grey)  Enhancing services  Extra value (white)  Focus on core services Lovelock’s Rose of Service applied to water corporations. 14 September 2012 The Invisible Water Corporation 9
  • 10. Customer Satisfaction  Overall Satisfaction  Overall valuation of the service portfolio  Moment of Truth  Interaction with service provider  Expectations of outcome Every time a customer opens a tap, flushes a toilet or contacts the water  Satisfaction, neutral corporation constitutes a moment of truth. or dissatisfaction 14 September 2012 The Invisible Water Corporation 10
  • 11. Overall Satisfaction  The sum of transaction specific satisfaction  Other influences Public image Trust in corporation The drought and subsequent restrictions have a large impact on overall customer  Existing models satisfaction. SERVQUAL SERVPERF 14 September 2012 The Invisible Water Corporation 11
  • 12. Transaction Specific Satisfaction  Core Services Network reliability Water quality  Facilitating services Minimise phone calls Easy to understand Burst in Kangaroo Flat. Water supply bills disruptions cost customers additional time. bendigoadvertiser.com.au Self serving website 14 September 2012 The Invisible Water Corporation 12
  • 13. The Invisible Water Corporation  Minimise consumer time investment  Service quality ideal No water disruptions No water restrictions No boiled water notice A boiled water notice is a service failure as it requires consumer more time to use water. No phone calls 14 September 2012 The Invisible Water Corporation 13
  • 14. Further Research  SERVAQUA Model for water and sanitation service quality  Time utility  Consumer perspective  Pilot study  Validate model  www.prevos.net/water 14 September 2012 The Invisible Water Corporation 14

Notas del editor

  1. The ESC recently proposed a new range of performance indicators for water businesses.The UK regulator OFWAT has similar measures to A review of these proposed targets shows that there is no inherent logic as a foundation for the targets.Regulators periodically raise the bar, but what is a perfect water corporation from the consumer’s perspective?Invisible water corporation is a hypothesis on perfection in water services, used to benchmark water corporations in my research.Currently only in conceptual form – preparing a pilot study to validate the methodology.