Do water utilities need to have customer focus?

Customer focus is the prime purpose of all organisations, or so you would think. Many engineers in water companies believe that legislation and technical standards only govern the level of service quality experienced by customers. Engineers and scientists are the experts, and there is thus no need to ask the lay-customer what they want. One engineer expressed this view succinctly on LinkedIn:

You have to deliver good quality services, but I don’t get the concept that the customer is best placed to decide what those services are. They know they need pressure and they know if they don’t have water out of their tap, but beyond that, they have only a small understanding of the what is required to run a safe and efficient water supply system.

The many engineers and scientists in water utilities that hold this view are wrong. They make the assumption that if the technical quality of a service is sufficient, then customers will be happy. This assumption is not correct—the Grönroos model of service quality shows that technical quality is only one aspect of the total customer experience.1 To influence the total perceived quality, many non-technical parameters, such as public image and functional quality, need to be managed.

Customer focus: The Grönroos model of service quality

Grönroos (1990) model of service quality.

There is a significant paradigmatic difference between engineering and marketing. Engineering is based on predictable physical systems, while marketing builds on the inexact science of consumer behaviour and is predominately about managing perceptions. There are many examples where, even though technical quality is almost perfect, the understanding of consumers of the level of service is still small. This problem exists because the human dimension is not part of the equations that govern water systems.

water tasting

Tasting water.

One perfect example is the aesthetics of water. Although it makes no difference towards the actual safety of the water, consumer perception is that drinking water is colourless. Taste is another variable that is not easily controlled or measured through engineering. Research shows that the water itself does not only influence the taste of water but moderated by environmental variables, such as the material of the cup.2

Perception is everything in marketing. This is also important in monopolies because publicly owned business are controlled by politicians who want to keep the voters happy.3 It could also be argued that all customers in a publicly owned system are all shareholders, and their views should be taken into consideration—any other view could be considered arrogant.

water companies should be managed by marketers

In my recent interviews with customer stakeholders in reticulated water, the voice of the customer clearly indicates that they want to improve focus on their needs. A clear theme in the data is the occasional disconnect between engineering and service staff. One respondent told me (paraphrasing): “water companies used to be run by engineers, now they are managed by accountants. In the future, they should be controlled by marketers”. In other words, we should account for the non-rationality of consumer behaviour.

The concept of bringing engineers and marketers together was beautifully expressed by Philip Kotler and Sidney Levy who write that: “Marketing is customer satisfaction engineering”4.


  1. Grönroos, C. (1984). A service quality model and its marketing implications. European Journal of Marketing, 18(4), 36–44. doi:10.1108/EUM0000000004784 

  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. 

  3. Having said this, a good friend of mine once stated that “voter satisfaction is not a good proxy for customer satisfaction”. 

  4. Kotler, P., & Levy, S. J. (1969). Broadening the concept of marketing. Journal of Marketing, 33, 10–15. 

People don’t care much about tap water

Women in Ethiopia carrying water. No acess to tap water

Women in Ethiopia carry water from a lake back to their homes. Source: waterencyclopedia.com.

Access to clean tap water is considered a human right as without it life would be impossible. But although water falls free from the sky, getting the water you need is not for free. In countries without reticulated water, people sometimes spend hours each day obtaining their water. In more developed countries obtaining water has been outsourced and people pay water utility companies to deliver clean water right at their doorstep. Given the importance of water for sustaining life you might think that most people care very much about tap water.

Consumer Involvement

In marketing, consumer involvement is the construct used to measure how much consumers care about a product or service.1 It is measured by asking people to tick a box on a scale between two extremes.

Personal Involvement Inventory (Zaichowsky 1994).

Personal Involvement Inventory (Zaichowsky 1994).

In June last year I created an online survey to measure the Personal Involvement Inventory (PII) for tap water and invited people to complete it via Twitter.2

Consumer Involvement in Tap Water

In total 77 responses were received (40% female, 60% male). Respondents were also asked whether they have a garden and whether they are professionally involved in tap water. The lowest possible PII score is 10 and the highest 50. The average score of this survey was 40.6, which is quite high—more than previously reported for mouthwash, but less then the involvement people have with cars.3 Interestingly, there were no significant differences based on gender, having a garden or being a water professional—all groups valued water equally.

The Personal Involvement Inventory has two dimensions: it measures a cognitive (rational) and an affective (emotional) involvement. The average cognitive involvement with tap water was 23.6—almost the maximum score of 25. This is not surprising given the importance of water. Affective involvement with water was much lower at 17.2. The difference between the two is statistically significant: t(76)=13.42, p < 10-6. However, also in the sub-factors there is no significant difference between genders, gardening or profession.

Twitter is, however, not a representative sample and most tweets seem to originate from the younger generations. The research  can also not be considered a representative sample as the invitation to complete the survey was re-tweeted mainly by water related accounts. It can be assumed the people that follow these accounts have a higher level of involvement than regular tap water users. There is, however, no reason to assume that the relative difference between cognitive and affective involvement will be different in other population segments.

Conclusion

What we can tentatively conclude from these results is that our emotional relationship with water is much lower than our rational understanding of its importance.

These results can have implications for how tap water is marketed by water utilities. Involvement is an important indicator that is related to willingness to pay. The more we are involved with a product or service, the more we are willing to pay.4 Smart marketers thus use strategies to increase the level of involvement.

The reasons for the low level of involvement have to be sought in the marketing myopia of tap water service providers. Some have even argued that tap water managers are lazy marketers.To increase the level of involvement the message from water utilities needs to become more emotive, following the example of bottled water companies.


  1. Zaichkowsky, J. L. (1994). The personal involvement inventory: Reduction, revision, and application to advertising. Journal of Advertising, 23(4), 59. 

  2. Thanks to@DrinkTapDotOrg, @Help4SmallWater, @MagicTony and @cfishman for the help in getting respondents. 

  3. Zaichkowsky, J. L. (1985). Measuring the involvement construct. Journal of Consumer Research, 12(3), 341–352. 

  4. Cohen, M. (2000). Consumer involvement–driving up the cost. Consumer Policy Review, 10(4), 122–125 

Bottled Water Marketing — The Importance of Origin

Fiji water does not suffer from marketing myopia - bottled water marketingTwo pieces of interesting information regarding bottled water marketing have surfaced on the internet recently. Nestle has been sued for falsely advertising the origin of bottled water, and researchers published a finding that tap water is inherently safer than bottled water.

Nestlé is in trouble because its “spring water” source is municipal tap water. Nestlé’s advertising campaign claims the contents of Ice Mountain Water to be spring water, while it is distinctly referred to as “drinking water”, which is defined as “municipal water and well water…” in their documents.1 The water is further processed by Nestlé’s treatment plants and branded with images of pristine glacial lakes and mountains.

Bottled Water Marketing Strategy

This strategy is standard for bottled water companies. Given that tap water is identical to tap water, at 1000 times the price, bottled water companies need to increase the value proposition of their offering by emphasising how their product is different to tap water. A common strategy used by bottled water companies is to highlight origin and link the origin to increased benefits, such as health. Just look at Fiji Water, Evian and any other bottled water brand.

Many water utilities don’t do origin strategies very well, focusing on treatment processes instead of the natural origin of their service. Origin is of prime importance in water marketing, being it tap water or bottled water. Problems with the acceptance of recycled sewage as drinking water forcefully illustrate this point.


  1. The link to the document on the Tap It Talk website is longer active. 

The 7 Graces of Tap Water Marketing

Applying the 7 Graces to tap water marketing

Used with permission.

Marketing is often seen as the evil stepmother of business. Marketers are portrayed as malicious manipulators, driving consumerism and everything else considered wrong about contemporary culture. The debate about bottled water versus tap water being an interesting case in point.

Best-selling spirituality author Lynn Serafinn wrote a book about ethical marketing called: The 7 Graces of Marketing. Serafinn’s book provides a set of “values and principles for a new paradigm for business”. The book borrows from the principles of Value Based Management, which I have recently critically reviewed. Leaving the philosophical debate besides, I looked at how these seven principles could apply to the marketing of tap water.

Tap Water Marketing

Many professionals in the water industry consider tap water marketing unnecessary as most service providers are natural monopolies owned by governments. But marketing entails more than the recruitment and retention of customers. Marketing is about maximising value for customers and the principles defined in the 7 Graces can be used to provide a framework for the marketing of monopolistic services.

1. Connection

The first of the 7 Graces relates to knowing yourself to better communicate. In marketing speak, this is the so-called ‘value proposition’. This statement is not an empty catchphrase, but an essential aspect of customer relationships. A value proposition is the entire set of experiences that an organisation provides to customers. The value proposition is where the service provider and customer connect with each other.

2. Inspiration

The aim of advertising is to convince consumers to become your customers. In a monopolistic environment, there is no need for obtaining customers and advertising can be used to inform and inspire customers. Providing water is a service which people use to meet certain needs, being it drinking water for life, a swimming pool for social belonging or a garden to be able to express your creativity. Water companies can increase the value of service by providing information about how to use water in the best possible way and inspire people to maximise the value of the water they purchase.

3. Invitation

Most customers of water utilities are not interested in tap water as such; they just want the water without hassle. The ideal water corporation, i.e. the Invisible Water Utility, focuses on providing excellent service without being intrusive to its customers. But for those that seek further information we should provide all the information they need about our services.

4. Directness

Governments own most tap water companies. Their existence and actions are enshrined in law. This situation can lead to bureaucratic communication instead of real customer service. Directness implies placing the needs of the customer first instead of being locked into bureaucratic processes. Directness can be achieved by communicating with your customers in plain English and placing meeting their personal needs before using regulations to justify not helping them.

5. Transparency

Deception is a part of the human condition and often deliberately used in marketing. Marketing is just like performing magic tricks, using technique, psychology, misdirection and entertainment to sell goods and services. In a monopolistic environment, there is no need to deceive the customer; there is no need to resort to deception as customers do not need to be recruited nor can they defect.

6. Abundance

Water being a natural resource that can only be produced from its chemical components at enormous cost, environmental sustainability is of immense importance. Many water companies propagate a negative message of scarcity instead of abundance, which creates frustration in communities.1 This issue relates back to my comments on inspiration. Although there technically is a scarcity of water, we need to focus on a positive message on how to maximise the value of available water through education of customers and pricing signals.

7. Collaboration

One of the defining aspects of services is that they are provided in cooperation between customer and service provider. In the case of water, the service is provided through the taps and plumbing owned by the customers. Both service provider and customer need to work together to ensure a high level of service.

The Eight Grace and beyond?

Lynn Serfafinn’s 7 Graces provide a systematic framework to help marketers make ethical choices. But are these the only values? Any value based system will never be complete. Additional dichotomies, for example, injustice—justice (treating all customers equally) or apathyempathy (understanding customers), can be easily defined and justified. But it is up to the individual organisation which values it wants to focus on.

The 7 Graces is an inspiring book, written from a common sense perspective on how to provide value to customers without falling into the traps of the types of marketing used in consumer goods.


  1. Cooper, B., Burton, M., & Crase, L. (2011). Urban water restrictions: attitudes and avoidance. Water Resources Research, 47(12). doi:10.1029/2010WR010226 

Marketing Myopia in Tap Water Services

Source: www.blog.designsquish.com.

Source: www.blog.designsquish.com.

A few weeks ago I ran a workshop for a group of senior managers of a tap water supplier. The workshop consisted of a series of rhetorical questions designed to spawn discussion about the meaning of customer service in tap water.

When asking the question: “What service do you provide?” the answers were mainly based on the physical aspects: physically providing water to customers.

The water managers were wrong! A tap water company is, paradoxically, not about selling tap water.

Marketing Myopia

Managers of water utilities who believe that they merely sell water suffer from so-called ‘marketing myopia’, a term coined in 1960 by Theodore Levitt.1 This is a situation where an organisation focuses on selling products or services instead of focusing on satisfying customer needs.

There is a lot of confusion about the difference between needs and wants. In marketing the common sense definition—needs are obligatory and wants are discriminatory—does not apply.2 Needs are a state of felt deprivation which is either physical, social or psychological. Looking at water as a service, we need some water to physically survive and for hygiene. Al significant amount of the water we use for hygiene is, however, driven by sociological needs because of western values towards cleanliness. People also need water for their gardens because it gives them a sense of accomplishment. People need water for their swimming pool, because it provides them an outlet for social belonging. Nobody buys water just for the pleasure of owning it, water has a purpose.

One of the main rules in consumer behaviour is that we do not buy products for what they do, but for what they mean.3 So as marketers we do not judge the consumer’s needs or wants. Consumers need water for social and psychological reasons, as much as they need it for physiological reasons.

Avoiding marketing myopia

Good marketing is about satisfying the needs of the customers, which means you need to understand them. In the context of water it is important to understand what your customers do with the water. Looking at websites of water utilities shows a large focus on the technology to deliver the product. There seems to be a need to tell consumers how much effort is required to give them their daily tap water instead of showing the benefits of using the water.

Fiji water does not suffer from marketing myopia

Source: www.fijiwater.com

Bottled water companies have a different view on this issue. Their communication material never shows the production process, they show the origin of the water or the benefits it provides. This ad from Fiji water emphasises the purity of the water by using the word ‘untouched’. Bottled water companies connect their product not with technology, but with nature and beautiful healthy people.

We need a paradigm shift in the way tap water is marketed by utilities. Not because customers might defect to the competition, but to create goodwill. Many water companies try to do this by rationally explaining how hard it is to create drinking water. Well, I am sorry to say that your customers don’t care about water as much as you do.

A much more effective way is to tap into the emotions of your customers and link your product to the benefits it provides them, or the pristine origins of the water. A water utility is not about selling water, it is about promoting health, providing water to have fun, grow your own vegetables or relax in a bubble bath.

Notes


  1. Levitt, T. (1960). Marketing Myopia. Harvard Business Review, 38(May/June), 45–56. 

  2. Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50(4), 370–396. 

  3. Belk, R. W. (1988). Possessions and the extended self. Journal of Consumer Research, 15(2), 139–168. 

Demarketing Water Supply

Wrong customer behaviour?

According to an announcement by the International Water Association, four in ten senior executives from water utilities around the world believe that it is highly likely that water demand will outstrip supply shortly due to “wasteful consumer behaviour”. A  report by Oracle (Water for all?) found that water managers perceive high water use by customers as the biggest threat to the sustainability of supply.

Does this statement betray a lack of customer focus by water managers? The Oracle report has, like most publications on water management, a technological focus and does not seem to consider the marketing aspects of water management.

Marketing is not exclusively focused on increasing sales, in essence, marketing is the process of creating customer satisfaction, which goes beyond sales and promotion. In water management marketing is often a case of demarketing,1 In the words of Kotler and Levy:

Rather than blindly engineering increases in sales, the marketer’s task is to shape demand to conform with long-run objectives.

Excess demand is as much a marketing problem as excess supply. This situation does not only occur in the sale of natural resources like water, but there are also many instances where commercial companies use demarketing in order not to disappoint too many consumers. Companies like Apple even use shortages to create a positive image of their product. Businesses can, according to Kotler and Levy, use several strategies for demarketing:

  • Reduce advertising, sales promotions and selling
  • Increase the price and other conditions of sale.
  • Increase time needed to use the service and psychological cost.
  • Reduce the quality of the service.
  • Reduce the number of sale outlets.

The first and last options are not applicable to water utilities—as monopolists, there is no need to sell the service and water companies cannot reduce sale outlets. Increasing time- and the psychological cost has been used in Australia when under certain water restrictions gardens can only be watered using hand-held hoses. Reducing the quality of the service can be achieved by minimising the pressure of the water, thus reducing usage.

In demarketing, the same strategies that are used in positive marketing, i.e. maximising sales, can be used to curtail consumer demand. Demarketing should not only focus on promotion to change attitudes but the total marketing mix—Product, Price, Place and Promotion—needs to be taken into consideration.2


  1. Kotler P, Levy S. (1971) Demarketing, yes, demarketing. Harvard Business Review 49(6):74-80. 

  2. Cullwick, D. (1975). Positioning demarketing strategy. Journal of Marketing, 39(2), 51-51. 

The Price of Water in Ancient Literature: Views from the Bible, Plato and Adam Smith

The price of waterMuch has been written about the prices of water. Deliberations about the price of water are, however, nothing new and in several ancient sources we can find views on this topic:

The Bible (Isaiah 55:1) sees water as a human right. A point of view that many people seem to have in debates about water prices:

Come, all you who are thirsty, come to the waters; and you who have no money, come, buy and eat! Come, buy wine and milk without money and without cost.

This invitation to the thirsty shows the importance of water in semi-arid cultures. This quote positions water as a human right to be shared by all without having to pay for it. Some have argued that water is a God-given right and should not have a price. The counter argument is that the water might fall free from the sky, but the pumps and pipes needed to deliver it to customers is not.

Plato (Euthydemus 304B):

For only what is rare is valuable; and “water,” which, as Pindar says, is the “best of all things,” is also the cheapest.

This quote refer to the  Ancient Greek lyric poet from Thebes

Adam Smith, in his book Wealth of Nations (Book I: 4.13) described what has become known as the Diamond—Water Paradox.

Nothing is more useful than water: but it will purchase scarce any thing; scarce any thing can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.

Are Tap Water Managers Lazy Marketers?

Water is like air—a natural occurring substance without which life is not possible. But unlike air, tap water is a commercial commodity that is only available at a price from water utilities.

In developed countries, tap water is provided through reticulated systems. Pipes in your street deliver water directly to your house, and you pay a price, depending on the amount of water used. Even through tap water pricing is a controversial topic, it is very cheap. With prices of less than one cent per litre, filling a bottle of water costs practically nothing. But, not all water is the same. Purveyors of bottled water charge hundreds of times the price people pay for tap water, even though the core product is the same.

In an episode of Australian comedy show Gruen Transfer, advertising executive Russel Howcroft facetiously explained this price difference by stating that water utilities are lazy marketers. Is Russel correct?

Marketing Tap Water

Most managers at water utility companies believe that there is no need for marketing because reticulated water is a natural monopoly. But marketing is more than selling and advertising. In the words of Phillip Kotler, marketing is “customer satisfaction engineering”. Marketing is the process of creating value for the customer.1

Bottled water companies create brands that are built on images of pristine rivers and healthy happy people. Water utility companies mostly brand themselves with technology, proudly showing their latest treatment facilities, pumps and pipelines. Bottled water companies focus on emotional aspects of their brand, while water utilities follow a more rational technological approach.

Why are we willing to pay so much more for bottled water? Willingness to pay is, among other things, related to the level of involvement we have with the product.2  Potable water is considered a low involvement product. We don’t care about the water, as long as it is available. Potable water derived from the tap cannot be differentiated from other potable water as all H2O is the same. Bottled water companies know this, so they increase the level of involvement and differentiate from the competition through effective branding. Bottled water companies create a brand personality by attaching images of naturalness and purity to their product. They never show the bottling plant, the pipes and pumps they use to create their product. Bottled water companies attach emotion to their brand, which increases our level of involvement and our willingness to pay.

NYC water does not suffer from marketing myopia

NYC water does not suffer from marketing myopia.

I am not arguing that through smart marketing water utilities can charge as much as bottled water companies—that would make having a bath a very expensive experience. Tap water is used for many purposes, including flushing it down the toilet, which limits the amount we are willing to pay.3

Russell is, however, correct in saying that water utilities are lazy markers because they are pre-occupied with their internal technological perspective on the product. Why not focus more on the people who use the water? The above example from the New York City water company is an excellent case in point.


  1. Kotler, P., & Levy, S. J. (1969). Broadening the concept of marketing. Journal of Marketing, 33, 10–15. 

  2. Cohen, M. (2000). Consumer involvement is driving up the cost. Consumer Policy Review, 10(4), 122–125. 

  3. Levy, D. (1982). Diamonds, water, and Z goods: an account of the paradox of value. History of Political Economy, 14(3), 312–322. 

VicWater Conference (2012) Presentation

Below is the abstract and presentation about my viewed on customer service in tap water, held at the 2012 VicWater conference in Melbourne.

VicWater Conference

The provision of water and sanitation services is an essential part of life that is are taken for granted in the developed world and citizens expect a high level of service at reasonable cost.

The determination of reasonable cost and level of service are complicated issues and in Victoria, the discourse on this subject is dominated by the Essential Services Commission (ESC). In this paper, an alternative model for the measurement of service quality is proposed based on contemporary thinking in the field of services marketing.

The services for water and sanitation can be divided into core and supplementary services; the core services being the supply of water and the removal of wastewater. Facilitating services are billing, payment facilities, fault correction, information provision and so on. Enhancing services are activities that do not impact the core service, such as technical assistance to developers.

In the marketing of services, the term Moment of Truth is used to describe the instant of interaction between the customer and the service provider. In water and sanitation services, customers experience many thousands of moments of truth each year. Every time a tap is opened or a toilet is flushed a Moment of Truth. If water appears, the expectations are confirmed leading to customer satisfaction. If no water appears from the tap or is delivered at the wrong quality, the expectation is disconfirmed, leading to customer dissatisfaction.

In economic models to determine the price of water, the cost to the consumer is restricted to monetary cost. The cost to a consumer should, however, be extended to include externalities. The time required obtaining water services—including facilitating services. Given the high level of development, the time to collect water in Australia is negligible. This negligible time cost is, however, not the case for facilitating services, which includes the recovery from service failures.

The Invisible Water Corporation is a concept used to describe the highest possible level of service quality. In a perfect world, customers of a water corporation never contact the business. Bills are be paid automatically, billing is accurate and easy to understand and every time a tap is turned, or a toilet is flushed, expectations are met, and there is no need to contact the corporation, boil water or other time-consuming activities.

This conceptual idea can develop into a new model to measure service quality. The criteria currently used by the Essential Service Commission are indicators of a high level of service but do not measure the actual impact on customers. For example, the repair of a water burst itself should only be considered a service failure for those customers attempting to use water. Measuring the responsiveness at which phone calls are answers is in itself not a complete indicator of service quality. Every question forms a customer regarding billing is the time they need to invest to enjoy the service and should be avoided. More meaningful indicators can be developed to measure the reasons customers call their service providers, which can help to eliminate these causes, working towards total invisibility.

The Invisible Water Corporation is a concept under development as part of my PhD research into the relationship between organisational culture and service quality in the water and sanitation industry.

Sentiments towards Tap Water in 140 Characters

Tasting tap water. Source: The Guardian

Tasting tap water. Source: The Guardian.

Tap water is an essential service enjoyed by many people around the world. Companies providing tap water services often use customer surveys or similar tools to measure how well their efforts are perceived by consumers.

Surveys are problematic because they create an artificial environment where the respondent often answers to meet the perceived expectations of the survey or customers exaggerate to get their point across.1 One way to overcome this is using sentiment analysis of ego-documents written by consumers.2 Ego-documents, i.e. forms of personal writing, are a more direct way to find out what consumers think, but they are not easy to obtain and analyse.

With the advent of social media, access to ego documents has become much simpler and many tools exist to collect and interpret this data. Using ego-documents brings you closer to the consumer than can be possible with surveys or focus groups. One medium gaining popularity with market researchers is Twitter.3

The open structure of Twitter makes it a suitable platform for sentiment analysis for which several data mining algorithms have been developed. One free tool available is TweetFeel, which analyses tweet search feeds based on keywords. Using this free tool shows that the sentiment towards tap water is slightly leaning towards the negative. Many tweets relate to the discussion on tap water versus bottled water and taste seems to have the biggest impact on sentiments. TweetFeel analysed that

Using this free tool shows that the sentiment towards tap water is slightly leaning towards the negative. Many tweets relate to the discussion on tap water versus bottled water and taste seems to have the biggest impact on sentiments. TweetFeel analysed that 63% of tweets on tap water were negative.4 Reviewing the tweets shows that the main concern customers have with tap water are either the presence of chemicals and its aesthetic appeal.

If you like to delve into the maelstrom that is Twitter, read through this live feed of the twenty most recent Twitter tweets with the words “Tap” and “water” in them. Refresh this page to see new tweets appearing.

Notes


  1. Burns, A. C., & Bush, R. F. (2010). Marketing research. Upper Saddle River, N.J.; London: Prentice Hall. 

  2. Harrison, G. (2012) Sentiment analysis could revolutionize market research. Database Trends and Applications, 26(1), 35-35. 

  3. Kontopoulos, E., Berberidis, C., Dergiades, T., & Bassiliades, N. (2013). Ontology-based sentiment analysis of Twitter posts. Expert Systems with Applications, 40(10), 4065–4074. doi:10.1016/j.eswa.2013.01.001

  4. Measured on 2 August 2012.