Service Quality in Essential Services: Smart Utilities 2013

This presentation outlines a model to measure the level of service in essential services, based on contemporary ideas in the field of services marketing. Presented at the Smart Utilities Australia/New Zealand 2013 conference on 26 November 2013.

In economic models for the pricing of essential services, cost to the consumer is restricted to monetary cost. The cost to a consumer should, however, be extended to include the time required to consume services.

Given the high level of development of utilities in Australia, the time spent obtaining essential services is negligible, except when service delivery is disrupted. This is, however, not the case for facilitating services, such as the recovery from service failures, billing and provision of information and so on. These services require time to consumer, which can lead to frustrations.

My research indicates that consumers have a low level of involvement with tap water services and therefore have a low willingness to pay, both in money and time. This has implications on how to measure service quality and how to engage with customers.

The Invisible Water Utility is a concept used to describe the highest possible level of service quality, i.e. minimising the amount of time consumer spent on consumer essential services. Bills are paid automatically, billing is accurate and easy to understand and every time a tap is turned or a switch is flicked, expectations are met and there is no need to contact the utility, or to undertake other time consuming activities.

This presentation is based on research conducted with customers and customer stakeholder groups in Victoria. Also sentiment analysis using Twitter has been used to support the conclusions.

The methodology is innovative in the sense that it acknowledges the low level of involvement consumers have with essential services. This goes against the current drive to increase engagement with customers, which is based on theories for high involvement services.

This presentation provides an update of my on-going PhD research project into the relationship between organisational culture and service quality in essential services.

Service Quality in Essential Services

  • Essential services have a low level of involvement
  • Low involvement relates to a low willingness to pay (time and money)
  • A perfect essential service is invisible to the consumer

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