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The concept that customer is always right is a controversial topic in service industries, including water utilities. There seems to be a paradox between how water professionals perceive the quality of a water service and the way customers see it. Providing safe drinking water is not the same as providing good water. For example, chlorine or fluoride are added to the water ensure to protect public health. In some communities, however, chlorine and fluoride are perceived as unwanted chemicals, leading to a reduction in the perception that customers have of the quality of service1.
Customers of two Australian and three American water utilities were surveyed to investigate possible moderators of service quality in water services. The preliminary conclusion of this pilot study is that service quality perception is not only influenced by the quality of the service, but also by external factors such as financial hardship and service involvement. This research has potential implications to how service quality is reported and interpreted and how utilities relate to customers.
- A sample of customers from two Australian water utilities reported their perceptions of tap water
- Customers with a higher level of financial hardship rated the level of service lower
- Customers with a higher level of involvement rated the level of service higher
- External factors influence service quality perception of water utility customers
This paper reports on a pilot of a research project investigating the relationship between organisational behaviour and customer perception. A sample of customers from two water utilities in Australia completed a survey about their perceptions of tap water. Customers were asked their views on the following concepts:
- Involvement with tap water
- Frequency of contacting their water utility
- Level of experienced financial hardship
- Service quality perception
- Technical quality of the services provided by their water utility
- Functional quality of the services provided by their water utility
Involvement with tap water was measured using the Personal Inventory Index. This ten-point scale is regularly used in marketing research to measure the level of involvement consumers have with products and services. Consumer involvement is a person’s perceived relevance of something based on their needs, values, and interests.2
The frequency of contacting the utility and the level of perceived hardship were determined with single items on a 1–7 Likert scale.
The level of technical service was assessed using five questions about the physical services, i.e. availability, pressure, taste, safety, visual appeal. The level of functional service was evaluated using a scale consisting of 13 items, such as billing accuracy, friendliness of staff, availability of information and so on.
Service Quality Perception in Tap Water Services
A total of 649 customers from six utilities in Australia and the United States completed the survey, with the standard error of responses at 0.9%. The distribution of replies is indicated along the diagonal of figure 1, correlations between variables are shown above the diagonal and scatter plots below the diagonal.
Figure 1: Correlations between customer constructs.
Analysis revealed statistically significant correlations between some of the constructs. Service quality perception is influenced by financial hardship and positively influenced by involvement.
Most salient was a high negative correlation between the level of financial hardship and perceptions of functional quality (r(649)=-0.16, p<0.001) and technical quality (r(649)=-0.19, p<0.001).
The level of involvement revealed a positive correlation with functional quality (r(649)=0.26, p<0.01) and with technical quality (r(649)=0.35, p<0.01).
The data thus shows that the more difficulty customers have with paying their bills, the lower their perceptions of the level of service provided by water utilities. The data also shows that customers with a high level of involvement in tap water rate the level of service provision higher than those with a low level of involvement.
The level of technical quality also shows a strong correlation with the degree of functional quality (r(649)=0.35, p<0.01). The reason for this healthy relationship is unknown and is most likely caused by confounding variables.
The idea that service quality is moderated by factors outside of the direct control of the service provider is a well known phenomenon in marketing theory. Research in food marketing shows that the taste of water can be influenced by the firmness of the cup it was consumed from.3 This pilot study indicates that these types of effects may also exist in the provision of urban water services.
Although the physical quality of water services can be manipulated by improving operational effectiveness, the perception that customers hold on the level of service is moderated by many other factors. The level of hardship can be controlled through pricing controls and rebates, but the socio-economic circumstances of customers can only be managed through empathy with their individual circumstances. Involvement with tap water can be influenced through customer engagement and communication. Involvement is important to water utilities as it has been found in other services to also be linked to a consumer’s willingness to pay for services.
This research into service quality perception is currently being extended to include further data from other water utilities to confirm the results of this pilot study.
The axiom that the customer is always right needs to be nuanced. The customer might not be right about the physical facts of a water service, however, they are always right about their own service quality perception. This demonstrates that in order to provide a high level of service to customers, a focus on excellent engineering will not necessarily lead to increased customer satisfaction. A deep understanding of customers is required to influence the moderating that moderate their perceptions.