Why should a monopoly be customer-centric?

Monopoly

If you operate a monopoly you can dictate what customers get, when they get it and what price they will pay. Legislated monopolies like water and power utilities, letter mail services and cable companies with geographic monopolies have held customers to ransom and traditionally have just paid lip service to customer service.

Why should that be any different today? Well there are some good reasons why these monopolies should start to think deeply about their customers’ needs and strive to provide more value to them – that is, to start becoming customer-centric.

First, disruptive technologies and indirect competitors are changing the way consumers behave and what they value. Both US Mail and Australia Post are experiencing substantial and growing losses in their mail services as people communicate digitally. The businesses of cable companies are feeling the inroads of satellite providers and digital entertainment services streamed directly to consumers’ smart phones and mobile devices. Water authorities are facing existing and new competitors that are adding value to the basic water supply. The bottled water market is huge around the world. New technologies to tap sea water for use in irrigation are in their infancy but will impact the traditional water authorities over time. Solar technology, power generation technologies for businesses and subsequently homes are having an impact as alternative sources of energy.

Second, monopolies are under pressure to become more efficient by regulators and government stakeholders to reduce duplication and waste and make better asset resource decisions dictated by the future needs of consumers and continuous pressures on the public purse.

Finally, unhappy customers resisting price rises and poor service are becoming vocal and this translates into lost votes for politicians.

The Water Services Association of Australia (WSAA) is the industry body that supports the Australian Urban Water Industry. Its members and associate members are monopolies that provide water and sewerage services to approximately 20 million Australians and many of Australia’s largest enterprises. Its members have defined the vision they want to achieve by 2030 as:

Customer driven, enriching life. 

Many of the individual water utilities are embarking on a customer-centric initiative to develop a customer culture within their organizations. There are strong customer-centric behaviors in parts of their organizations, but senior leaders realize that many of the traditional functions in their utilities are internally focused. The best starting point will be to benchmark all the functions in the utility to measure relative customer centricity strengths and weaknesses using a tool such as the Market Responsiveness Index. This will highlight “bright spots” in the organization and help create focus for specific initiatives to develop customer centricity.

If you are in a monopoly position, are you considering how to develop a more customer responsive organization – not just through improved customer service, but as a customer culture? You can find a roadmap to help chart your course in our award winning book: The Customer Culture Imperative

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