I recently reviewed a Water Online interview with George Hawkins, General Manager of DC Water. The discussion had a lot to do with how DC Water has become a market leader in many things but none more important than brand value and innovation.
When Hawkins first arrived at DC Water he was told that the capital budget would rise by $100M per year over the following four years. Much of that cost would go towards, no surprise here, aging infrastructure and employee–related operating costs.
Faced with such a monumental challenge, DC Water quickly began working out a Full Cost Accounting System to cover the necessary infrastructure upgrades and operational costs which resulted in rates for customers rising 18% year one and 5-10% every year since.
Rate increases are never popular and in listening to Hawkins, I was struck by how important his focus on creating a strong brand value for DC Water was in gaining degrees of community acceptance for them. Especially when part of the increase in rates centered on offsetting the cost for low income families to make sure that everyone in the community has access to water services. Qualified low income customers get a low rate for service and the shortfall is subsidized by the remaining customers. That can be a hard sell.
In its ongoing challenge to avoid consumer revolt, the utility has been able to continuously nudge the D.C. community towards rate acceptance through open communication and including customers in understanding the social benefit. That benefit being both water services for everyone AND maintaining reliable systems to provide water and treat wastewater. In other words, customers feel like DC Water is working WITH or FOR them, and not selling a low-cost commodity TO them.
And it’s not just about rate increases. As the utility innovates, Hawkins is looking to commercialize those innovations by selling back consulting services and processes to other utilities in a novel approach to offset some of the initial costs that landed on his customers.
He realizes that the main problem in introducing new innovation at a municipality comes down to two things -- money and training. If a new way of doing something is available but untested it’s a big risk to adopt that new technology because it may fail. And if it fails, there isn’t money left over in the budget to revert back to the previous solution again. Training of engineers and operators on how to use the new technology is also a cumbersome expense that is too often excluded from the pricing of a new system.
What DC Water offers other utilities is validation that the innovative approach works and the knowledge that they don't have to pay for alone. This commercialization mindset has become a unique part of DC Water’s brand value. As Hawkins educates his consumers about where their rates are being utilized, he’s also letting them know how involved the utility is in actively keeping their costs down.
So what does all this mean for you as a manufacturer? The answer lies in your brand. If your customer truly believes you are there to help them versus sell them something, you are no longer in the pile of “things to consider” and are now on location and having a conversation. Hawkins says that they are “interested in change so that people can do their job better.” Prove you can help them do that and you’re much better off than throwing a product datasheet on a desk and hoping for the best. Help initially, continue to educate and then enjoy a relationship with your customer that the competition just doesn’t have.
When your company positions itself as working with and walking alongside its customers, much like DC Water, its brand value will lift profits to a level that supports your most ambitious growth plan. Matter first, then watch your results reflect your inherent importance to the market.
Image credit: "Wendy the Water Drop," Mike Maguire © 2017, used under an Attribution 2.0 Generic license: https://creativecommons.org/licenses/by/2.0/