Towards a Service Quality Model for Water Utilities

Water utilities are natural monopolies and therefore operate in a highly regulated environment. One of the cornerstones of all regulatory frameworks is performance measurement. Most existing systems are, however, merely lists of performance measures. These measures are categorised, but there is no underlying theory on how these relate to each other. These existing systems also focus mainly on performance from the utility’s perspective, with limited focus on the customer’s view of performance.

I am currently working on two different aspects of service quality in water utilities. For my employer I have developed a Water System Performance Index to better communicate performance to boards and senior management. For my dissertation I am looking at how customers view service quality of utilities. These two projects started separately from each other, until it dawned to me that they form part of the same broader view of service quality in utilities.

Towards a Service Quality Model for Water Utilities

The quality of a service can be viewed from two sides from the utility’s and the customer’s perspective. In marketing terms, this is called intrinsic an extrinsic quality.

These two perspectives apply to the two types of services offered by water utilities: core services and supplementary services. Core service relates to the physical provision of water and supplementary services are all other activities that enable or enhance the core service, such as information provision and billing. The distinction between intrinsic and extrinsic quality for core services also relates to the distinction between safe and good water I wrote about earlier.

Water Utility Service Quality Model

The model gives us four areas to measure quality: intrinsic and extrinsic technical quality and intrinsic and extrinsic functional quality.

Intrinsic Quality

Intrinsic quality in core services can be measured using the traditional methods in the monitoring of water systems. This gives us a view of how the water system intrinsically operates. Water quality parameters, pressure data and supply continuity are the most common parameters. The intrinsic quality of supplementary services is measured using a range of customer service metrics, such as the percentage of call answered within a certain time period.

Extrinsic Quality

In this service quality model, the perspective of the customer has equal weight to the perspective of the utility manager. The perspective of the customer usually comes to us via two channels, occasional surveys or complaints.

The Service Quality Model

This service quality model combines the views of the utility professional with the perspectives of the customers. Although they often seem incommensurable and even paradoxical, service quality in utilities cannot be adequately described by focusing on only one of these perspectives.

This is only a sketch of the system under development. I am currently collecting data to test some of the assumptions on which this model is based and aim to publish the completed version next year.

Water Quality Index: Communicating System Performance

Water quality indexReporting water quality performance to senior management or customers can be problematic as it requires a myriad of numbers and difficult to pronounce parameters—impossible words such as clostridium perfringens, polydiallyldimethylam-monium or bromochloroacetonitrile are not part of the vocabulary of most people.1 Directors and customers of utilities are generally not water quality specialists and that need to be provided with easy to digest information for them to be able to assess how drinking water supply systems perform. To achieve this goal, a water quality index is currently in development.

The index is aimed at reducing complex data matrices to a single number, combining information from various sources. The index provides an overview of water quality performance, without mentioning technical details. The overall index consists of five parameters: treatment effectiveness, network protection, regulatory compliance and customer perception.

Given the broad nature of these parameters—from subjective assessments by customers to objective laboratory data—a certain level of subjectivity is unavoidable. The different aspects of the index will not contribute equally to the overall performance of water supply: How should we view customer complaints in relation to laboratory data?

Methodology

A crowd-sourcing tactic was employed in the form of a survey to seek the collective opinion of water quality experts.2

Respondents were asked about their involvement in water quality (such as level of education and amount of experience in the field). The main survey consisted of two question banks regarding the relative importance of each of the proposed index factors and network sub-factors. Data was analysed using the using statistical package R.3 Responses can be considered reliable as the average standard error is less than 5%. The complete survey results and detailed analysis can be viewed on Rpubs. The raw scores on the main questions are presented in the diagrams below. The levels on the Y-axis are the relative importance (0–100) given to each of the parameters by respondents.

Water Quality Index survey results (n=36). Click on diagram for high resolution image.Analysis

The individual results regarding the relative importance of the individual factors and sub-factors are self explanatory. The final index scores will be weighted in accordance with these survey results. Additionally some meta-analysis has been undertaken to obtain insight into the complexities of assessing water quality performance. Factor analysis with varimax rotation revealed that a one-factor solution is capable of explaining 49% of the variance. This is an indication that questions were answered consistently among respondents and that item scores can be interpreted as originating from one latent variable, i.e. water quality performance.

Ten respondents also provided additional comments regarding the water quality index. Some respondents mentioned that the questions were “simplistic”, “ambiguous“ and “inaccurate”. This problem is, however, inherent to the data reduction and simplicity objectives of the water quality index. The index’s ambiguity and inaccuracy are a reflection of the fact that information is sourced from paradigmatically different sources such as customer feedback and laboratory results.

Due to the reduction in data complexity, the index, its factors and sub-factors cannot be used for quantitative analysis. The index is in essence a qualitative expression of water quality performance only suitable for communication and not for analysis.

One respondent also commented on the relationship between physical and biological water quality parameters and customer’s perception of these:

Focus on water safety sometimes gets clouded by issues associated with customer aesthetic opinion.

This is an expression of the water quality paradox. Even if the quality of water is in accordance with regulations, customers might still not be satisfied. Providing safe water is a necessary condition, but not a sufficient condition to achieve customer satisfaction.

Conclusion

The survey has been successful and will aid in completing a water quality index that reflects the relative importance of the different aspects of water quality.

The comments made by water quality experts are a common expression of the difference in thought worlds between scientists and customer service professionals and aid in further developing a theoretical model for organisational culture in water utilities.

Notes


  1. These terms appear in the Australian Drinking Water Guidelines (2011)—Updated December 2013. 

  2. A total of 36 responses were received from Australia, New Zealand, the USA and Europe. The survey was closed on 31 January 2014. Questions can be viewed as a pdf file

  3. R Core Team. (2013). R: A Language and Environment for Statistical Computing. Vienna, Austria. Retrieved from www.R-project.org

Perception is Reality: Water Quality is more than chemical analysis

perception of water quality is not only a scientific question - it has a strong psychological dimensionManaging water quality is dominated by chemistry. Customers’ perception of water quality is, however, mostly a psychological dimension.

Water utilities spend a considerable amount of energy in ensuring that drinking water is safe to drink. Armies of scientists and engineers undertake sophisticated analysis to ensure that customers can safely enjoy their water.

In my research, I am collecting data from customers of water utilities in Australia and hopefully also from other countries. The question is related to customers’ perception of the quality of the supply, including aesthetics and taste. The questionnaire also contains an item associated with the difficulty people have paying their regular water bills as an indicator of the level of financial hardship experienced by customers.

The research is not yet complete, but the data is showing an interesting trend. All quality variables strongly negatively correlate with the level of financial hardship experienced by customers. In other words, the higher the level of hardship, the lower the customer will evaluate the quality of the supply of the water. It might be argued that this is caused by people with lower incomes mainly living in areas with a lower level of quality. The correlation does, however, also hold for quality perceptions that are not location-specific, such as promptness of service requests.

Financial hardship was found to be a significant predictor of grades. It appears that the level of financial hardship experienced by customers is related to their perception of the physical parameters of the water. Further research is required to confirm this relationship.

Relationship between financial hardship and perceived technical service quality (F(1, 107) = 8.948, p<.005).

The relationship between financial hardship and perceived technical service quality (F(1, 107) = 8.948, p<.005).

Taste experience has been researched in depth in perception psychology. One of my favourite pieces of work is a study that shows that the taste of water is influenced by the material of the cup it is consumed from.1 This research emphasises a thought I expressed in a previous idea: safe water is a necessary condition, but not a sufficient condition for good water.

Delivering water that meets every known technical specification and health regulation will not guarantee customer satisfaction. Supplying tap water can be viewed from a perspective of experiential marketing. This philosophy of marketing heavily relies on perception psychology to inform how a service is provided.

Follow this blog or my Twitter feed if you like to find out more about the results of my research as it unfolds.


  1. Krishna, A., & Morrin, M. (2008). Does touch affect the taste? The perceptual transfer of product container haptic cues. Journal of Consumer Research, 34(6), 807–818. 

Safe Water versus Good Water

Safe water in South Africa (Source: WRC).

Safe water in South Africa (Source: WRC).

Providing safe water is the most important task of engineers in a water utility. Operators of drinking water systems comply with local regulations to meet this objective. Meeting these requirements can, however, lead to a reduction in the perception of quality by the consumer. For example, adding chlorine is essential to ensure public health in that it destroys micro-organisms, but in some communities chlorine is perceived as an unwanted chemical.1 Providing safe water is a necessary condition. but not a sufficient condition to achieve customer satisfaction.

Service quality is the overall assessment of quality by the customer. In reticulated water, it can be defined from two perspectives: that of the customer and that of the service provider. The customer extrinsically assesses the experienced quality attributes concerning what is capable of being perceived. From the service provider’s perspective, quality resides intrinsically within the service itself. The service provider is interested in providing safe water by meeting the relevant regulations—the customer is interested in good water through a positive consumption experience.2

Service quality in tap water: the difference between safe water and good water.

Service quality in tap water: the difference between safe water and good water.

The intrinsic perspective of the water engineer is predictable and rational. Water safety can be expressed in e-Coli counts, electrical conductivity and other scientific parameters. However, the extrinsic perspective of the consumer’s individual perception is non-rational. This non-rationality does not imply that consumers are irrational. A non-rational perspective is one that includes emotional assessments that cannot be described in numbers. How users of water systems view their service (good water) only partially overlaps with how engineers and scientists see the service (safe water). Customers are interested in good water and take safe water for granted. This aspect of water quality is for marketers to assess.

In marketing jargon, good water is determined by experience qualities while safe water is determined by the credence qualities of water. Experience qualities are attributes such as taste, that can only be discerned after purchase or during consumption, and credence qualities are attributes which consumers find impossible to evaluate because they do not have the knowledge or skill to do so and because many aspects of safe water are not immediately perceivable.3 This idea implies that as customers cannot experience the safety aspects of water directly, trust is one of the most important parameters in the provision of water services.

To provide a complete picture of service quality in water, it is important not to focus only on the intrinsic scientific aspects of service provision. A complete measurement system will include the non-rational dimensions of human perception. Scientists and engineers responsible for water safety need to work together with marketers to provide a complete understanding of water quality.

The concept of intrinsic and extrinsic service quality in reticulated water has been described in detail in my recent paper on the topic, which was presented at the 2013 World Marketing Congress in Melbourne.


  1. Kot, M., Castleden, H., & Gagnon, G. A. (2011). Unintended consequences of regulating drinking water in rural Canadian communities: Examples from Atlantic Canada. Health & Place, 17(5), 1030–1037. doi:10.1016/j.healthplace.2011.06.012

  2. The concept of the distinction between safe and good water is from Dr Dharma Dharmabalan. 

  3. Rushton, A. M., & Carson, D. J. (1985). The marketing of services: Managing the intangibles. European Journal of Marketing, 19(3), 19–40. doi:10.1108/EUM0000000004748

The Yuck Factor: The Psychology of Drinking Recycled Water

Swimming in sewage

The Yuck Factor: Swimming in Sewage (Source: The Age).

Using sewage to create drinking water, or recycled water is a controversial topic in many parts of the world, especially in places where drought has forced utilities to develop alternative sources of tap water. In 2006 the Australian city of Toowoomba faced an extreme water supply problem and held a referendum asking its citizens whether recycled water should be added to the potable supply. This referendum led to emotional outbursts, and the proposal was eventually rejected. Some commentators on this event referred to the so-called ‘yuck factor’, which is an emotional reaction of repugnance towards certain foods and medicines. This article explores a psychological mechanism that causes this response and provides some suggestions on how to effectively promote the idea of using sewage to create drinking water.

The importance of origin

From a marketing point of view, using treated sewage to create drinking water is a proposition that ‘s hard to sell to customers. The origin of water is the most important aspect of the marketing of water, a concept masterfully used by bottled water companies. The importance of the (perceived) source of water was illustrated in a study which investigated whether there is a difference in willingness to pay depending on the name of a water service. The research found that customers had a higher willingness to pay for “recycled water” than for “treated waste water”.1 Although the study indicates that there are differences in valuation based on perceived origin of the water, no explanation was provided for this phenomenon.

The psychology of disgust

There is no rational reason to oppose using sewage to create tap water. Regardless of technology, the natural water cycle ensures that all sewage will eventually become fresh water and most likely will find its way to somebody’s tap. Human psychology is, however, more complicated than this simple rational line of thought.

Our deep-seated negative overall attitude towards faeces leads us to maintain a negative attitude towards anything that is related to it, including recycled water. Rationally speaking this is a fallacy and known as the Wisdom of Repugnance, or the yuck factor.  People arguing against recycled water use a non-rational ‘appeal to disgust’. They believe that an intuitive negative response to something should be interpreted as evidence for the intrinsically dangerous character of that thing. Although this is not considered a rational argument, it is nevertheless valid because we cannot simply ignore our innate psychological drives.

The psychological mechanism at work is the well-known principle of classical conditioning, also known as the Pavlov Reflex. Our cultural surroundings largely condition our tastes. Psychologists have researched these issues in detail. Faeces are a universal disgust substance that is deeply seated within our psychological make-up. This disgust is, however, not innate—we develop this feeling of disgust through conditioning2

Yuck Factor online laboratory

To better understand this mechanism, follow the instructions in the online lab test displayed below. Click on the Begin button on the right. No data will be collected in this test.

What we see in this experiment is that context in which the bowl is placed influences the attractiveness of the soup. None of the changes to the soup did, however, rationally modify the soup in any way. This experiment is based on the same principle behind the idea to use a special spoon to serve food to your pet—there is no rational reason to do so, but the perception of disgust is strong enough to motivate people to buy special spoons for their pets.

This experiment can be repeated using different water scenarios: straight from a spring, from a treatment plant, sourced from sewerage, downstream of a sewerage treatment plant and so on. This type of research should be conducted as it would assist utilities to sell better the proposition of using purified sewerage as drinking water.

Marketing recycled water

Although repugnance is a deep-seated psychological mechanism, the precise nature of the disgust mechanism is culturally determined. Just because a psychological mechanism is at work does not mean that it is hard-wired in our brain. Classically conditioned responses can be extinguished and reprogrammed. This change can, however, not be achieved by appealing to reason, as some industry experts proclaim.3

Recycled water attitudeMarketing recycled water is a delicate art. The repugnance against faeces is too deeply seated to be extinguished by reason alone. The most effective advertising to change attitudes does not appeal to reason—don’t try to convince your customers by telling them how great your treatment plants are. The best analogies to this problem are anti-smoking or safe driving campaigns. The most effective campaigns are those that appeal to non-rational aspects of smoking or speeding.

Given the intense disgust related to sewerage, telling people that they should drink and shower in recycled water will immediately activate the Pavlovian disgust reflex. The most effective way to sell the idea of using sewerage to create potable is to increase the level of trust customers have in the organisation, using origin strategies. Don’t emphasise the sewerage aspect of the water or the high-tech treatment facilities—emphasise the natural water cycle by using emotive images of pristine water flows. Focusing on the non-rational aspects of water consumption will increase customers’ involvement with utilities and ultimately have a positive influence on their perceptions of quality and trust in the organisation.4

What do you think? How can we make using recycled water as potable water acceptable?

Notes


  1. Menegaki, A. N., Mellon, R. C., Vrentzou, A., Koumakis, G., & Tsagarakis, K. P. (2009). What’s in a name: Framing treated wastewater as recycled water increases willingness to use and willingness to pay. Journal of Economic Psychology, 30(3), 285–292. doi:10.1016/j.joep.2008.08.007

  2. Rozin, P., Haidt, J., & McCauley, C.R. (2008). Disgust in M. Lewis, J.M. Haviland-Jones & L.F. Barrett (eds.), Handbook of emotions, 3rd ed. (pp. 755–776). New York: Guilford Press. 

  3. Russell, S., & Lux, C. (2009). Getting over yuck: moving from psychological to cultural and sociotechnical analyses of responses to water recycling. Water Policy, 11(1), 21. doi:10.2166/wp.2009.007

  4. Cohen (2000). Consumer involvement–driving up the cost. Consumer Policy Review, 10(4), 122–125; Espejel, Fandos & Flavián (2009). The influence of consumer involvement on quality signals perception: An empirical investigation in the food sector. British Food Journal, 111(11), 1212–1236. 

The Water Quality Paradox

Providing a high level of water qualityEvery day, thousands of engineers around the world work hard every day to provide potable water quality to their customers thereby keeping cities liveable and preventing disease. They do this work invisible to most people as customers have very simple, but very high expectations of service.

Although in well-managed systems, the chances that somebody does not receive an excellent service through their tap are extremely low, consumer perception of these services is often not as good as engineers would hope for. The reason for this is because there is a paradox in the provision of water services. Operators of drinking water systems are required to comply with local regulatory requirements. Meeting these requirements can, however, lead to a reduction in service quality. For example, adding chlorine is essential to ensure public health in that it destroys micro-organisms. In some communities, however, chlorine is perceived as an unwanted chemical, leading to a reduction in service quality.1

One of the main ways people form their perceptions of tap water is through taste. A simple search on “tap water” in Twitter shows that taste is the main concern. The taste of water is, however, influenced not only by the chemical and biological quality of the water itself but also by other circumstances, such as the cup people drink it from.2 It was found that the firmness of a cup in which water is served might affect consumers’ judgments of the water itself.

This finding implies that we can not influence the total experience of the service enjoyed by customers as there are always aspects outside the control of the service provider. What at first seems like a paradox is, however, not paradoxical. Water services are like internet services, as they are provided at the customer’s premises and they use their equipment to consume the service. The paradox in water quality is caused by the fact that we cannot control all variables that make-up the customer experience. To the customer, however, this is not important, and any service failure will reflect negatively on the service provider.

This problem is one of the issues I am currently researching for my PhD thesis and will soon start collecting data to dig deeper into this issue.


  1. Kot, M., Castleden, H., & Gagnon, G. A. (2011). Unintended consequences of regulating drinking water in rural Canadian communities: Examples from Atlantic Canada. Health & Place, 17(5), 1030–1037. doi:10.1016/j.healthplace.2011.06.012. 

  2. Krishna, A., & Morrin, M. (2008). Does touch affect the taste? The perceptual transfer of product container haptic cues. Journal of Consumer Research, 34(6), 807–818.