The influence of customer perceptions of urban utility water services on bill payment behaviour : findings from Uganda
Intensive research activities in low-income countries during the International Drinking Water Supply and Sanitation Decade (1981-1990) led to the conclusion that cost recovery is a prerequisite for the sustainability of water services provision. The challenges for cost recovery are greater in urban areas of low-income countries where, it is projected, 88% of all the increase in global population will live by 2015. In spite of these challenges, available data show that the bill collection efficiency in selected urban water utilities in Africa in 1996/97 ranged from as low as 50%. This study used empirical data, obtained through a cross-sectional survey in eleven towns in Uganda, to establish the influence of customer perceptions on bill payment behaviour. Using qualitative methods, a questionnaire was developed, pretested, piloted and refined, before it was sent to a probability sample of 690 registered customers of an urban water utility. Regression analysis of the obtained results showed that customer perceptions of technical quality, functional quality, service value and corporate image are individually strongly related to customer satisfaction. Correspondingly, service value and customer satisfaction predict substantial variation in customer loyalty, which in turn is a predictor of bill payment behaviour. Furthermore, gender, level of education, and type of occupation of the head of household, together with tenure status and household income, moderate the satisfaction/loyalty relationship. Findings of this research also highlighted the relative importance to customers of urban water utilities of such software attributes as: (i) how interface staff relate to customers during service encounters; (ii) how easy it is to transact with the utility, and (iii) the image organisational personalities project to the public. These findings have one major implication for supply-driven managers of water utilities: Similar to other services, customer orientation will improve profitability ratios in the urban water sector of low-income countries.