Wednesday, January 30, 2013

Strategic Communications - A tool towards better customer engagement and loss reduction

The high risks in the complex, unpredictable and highly political process of water sector reforms are unavoidable given the "essential goods" perception of water. However, what the utility operators need to understand is that investing time and money in "strategic communications" early in the engagement of water reforms and that it leads to a much smoother operations and success of the project. A World Bank report (2006) suggests that an understanding of public perceptions leads to better adoption of strategic communications help in improving the efficiency of the public utility.

The key challenges arising due to lack of strategic communications can be listed as:

  1. Social conflict due to lack of information or misinformation or a communications vacuum that creates uncertainty
  2. Power struggles leading to project delays 
  3. Consumer Opposition due to (justified or unjustified) fears about tariff, service levels and affordability
  4. Customer dissatisfaction when hyped expectations are not met, or are not right sized at appropriate time
The idea behind this post is to try and identify areas where communication tools can support reform 
process and mitigate risks. 

The three principles which can be applied to use communications as a strategic tool towards better utility management are discussed here:

  1. Principle #1: Know-Your-Customer: Instead of making assumptions about what the customers want or how they would react, it is advisable to undertake a Communication-Based-Assessment (CBA) to gauge the support for utility reforms within the stakeholders. (See pManifold's unique COPS Case Study). The CBA uses a mixture of conventional and unconventional data collection methodologies (including socio-economic parameters, Willingness-To-Pay, opinion polls, etc.) and establish baselines for stakeholders' perceptions, interests and priorities.
  2. Principle #2: Creating Awareness about the Need for Utility Reform: Once the CBA has captured the perspectives of customers and stakeholders, the Utility Management may determine what about the reforms need to be communicated, through which messenger to communicate the same and how to garner political support with other political groups and agencies. The Utility Operator should:
    • create awareness regarding the "state of the utility" in terms of challenges and opportunities for reforms and what it means to the customers
    • communicate the effects/challenges that lie ahead, if reforms are not implemented. At the same time, if not communicated correctly, the Utility might risk being looked upon as non-transparent
    • make the stakeholders understand their rights and responsibilities in the reforms process
    • Principle #3: Building Support and System for Change: Once the reforms are enacted, the communications does not stop there. The Utility should continuously use communications as a tool to build a culture of transparency and openness
    The Utility, to leverage the strength of strategic communications as a tool, should make use of the following best practices:
    1. The communications strategy should integrally be linked with the organizational strategy & goals and be in line with the utility operations
    2. The Operator should take sufficient effort to make the information available and accessible to all the stakeholders. Establishing web portal and maintaining it constantly is critical to promote transparency.
    3. Correctly identify the most trusted messengers or champions through early use of CBA
    4. The Utility Operator should right size the expectations of customers as well as other stakeholders in order to mitigate the non-financial risks. Only when the beneficiaries believe that the project has met the set expectations, the Utility Operator can claim that the project has realized its full value
    5. More often that not, in our typical environment, project delays occur. And when they do occur, the Utility Operator should be taking care to communicate the reasons behind the delay. This creates an environment of openness and credibility.
    6. Whatever positive results are achieved by the Operator, the results should be communicated to the customers and other beneficiaries
    7. Empowering the media is one of the best methods to spread word about the good work the Utility is carrying out. The media also serves as a tool to educate the consumers.
    8. Collaborate with local governmental and non-governmental agencies to drive the Information-Communications-Education (ICE) campaigns to build a positive image for itself
    9. Utility should invest in creating and maintaining an in-house professional communications capacity to avoid the inefficiencies in the governmental / state agencies' communications program

    *Source: Communication for Water Sector Reform: Obstacles and Opportunities, (2012), The World Bank

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