Europe’s wastewater treatment plant managers frustrated with standard of service

Companies that practice good customer service will benefit within the saturated market for municipal water and wastewater treatment equipment – a market where customer frustration with suppliers is high, says an international market research company.

Demand for replacement and refurbishment of municipal water and wastewater treatment equipment will help sales reach US$3.7 billion (€4.3 billion) by 2007, says market research company Frost and Sullivan. However, a new report by the organisation – the result of hundreds of interviews with plant managers across Europe – has revealed that there is a high level of discontent among customers, due to failures in customer services, uncompetitive pricing, and lengthy lead times.

Customers expect a certain level of quality of the products and a similar level of supply performance, says Frost and Sullivan Industry Analyst, Saana Karki. However, there is a general level of frustration among Europe’s water and wastewater treatment plant managers due to poor after-sales service, delivery times and cost, with some concerns also revolving around product quality, reliability and the skill of suppliers. “In addition to such traditional prerequisites, value-added services – after-sales support, prompt response times – are increasingly used [by customers] as a key measure of supplier differentiation,” she said.

Suppliers are currently focusing more on gaining the loyalty of their customers, rather than trying to attract new demand, says Frost and Sullivan. There is a widening gap between the more competitive suppliers and their less reputable counterparts. “Customers are increasingly able to differentiate suppliers on the basis of service, which at its best can act as a strong incentive for customer loyalty,” Karki said. “However, increasingly, those that fail to deliver serviceability are likely to be traded off to more competitive offers. For most customers, appropriate after-sales service is no longer an added benefit but a core part of an investment.”

“However, the performance of individual companies varies dramatically across each factor, showing that while some are developing a competitive advantage, other incumbent suppliers need to rapidly address critical issues in order to build customer loyalty,” says Karki.

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