Engaging Customers in Water Loss Management

Watch the On-Demand UtilityWide Talk:

Financing Investments through Capital Efficiency

Watch Now

Written by: VertexOne


Operating a public drinking water system is capital intensive. This means delivering the first gallon of water is infinitely more expensive than the second. The first gallon requires all the infrastructure, while the second requires only the operating cost to acquire raw water, treat it, and move it from the point of treatment to the point of delivery. Some amount of water loss, called unavoidable annual real losses (UARL), is inevitable in all water systems; the treated water lost in the delivery process which is prohibitively expensive to prevent. UARL is a mathematical calculation that assumes the distribution infrastructure is in good condition and accounts for the total length of the distribution system, the total number of service connections, the total length of connections from the street to the each meter, as well as average system pressure. It is exceptionally rare to find a utility operating at or close to the UARL. More often, UARL is two to three times the theoretical minimum, which is a figure usually referred to as the unaccounted for water percentage[1] (UFW). More commonly in the US, it's referred to as non revenue water.

Figure 1 - Global Unaccounted For Water Estimates


In comparison to other continents, North America’s UFW or non revenue water is relatively low, but any such assessment should be subject to careful scrutiny. As recently as the mid-90s it was acceptable to account for just 85% of the water produced.  However, as Figure 2 shows, the majority of states now require that water utilities have a robust method for accurately calculating real losses. To determine this utilities often commission a water audit which generally relies upon the IWA/AWWA water balance model shown in Figure 3[2]. This approach is proven and yields a high confidence estimate of the potential for real water loss reduction and how close to unavoidable annual real loss the utility could actually achieve.

Figure 2 - States with Water Loss Regulations or a Policy Framework


Figure 3 - IWA/AWWA Water Balance Model


Like the method to calculate real loss, methods to implement a reduction plan are well-understood civil engineering processes. Such approaches, while well understood and easy to quantify and plan, entirely omit the underlying causes; the aging and sub-optimal condition of the water treatment and distribution systems. Acting on a water audit alone does nothing to address the fact that deferred maintenance has become common throughout the water industry. A great deal has been written (including by WaterSmart) about the consequences of doing nothing and the cost of addressing the problem. The EPA[3] estimates that there are over 880,000 miles of drinking water infrastructure, much of it decades beyond its effective lifetime.

How did this situation become so acute? It’s the consequence of the notion that "out of sight is out of mind". Water utilities, the vast majority of which are agencies of local government, have historically sought to operate reliable, cost-conscious services, gauging customer satisfaction by an absence of customer feedback and engagement. Inevitably, when customers do not fully understand what it takes to deliver clean water reliably, little consideration is given to its cost. This lead to misperceptions about the true value of the water and the costs of infrastructure maintenance. WaterSmart addressed these broad issues in two recent blog posts: Imagine a Day Without Water and Generating a Thirst for Water Information. Once the decision to defer maintenance is taken, the vicious cycle of real loss management, shown in Figure 4, begins in earnest.

Figure 4 - Role of Customer Engagement in REAL Water Loss Management

It now common, due both to regulatory mandate and the increase in service interruptions[4], for utilities to develop a mediation capital investment plan. As noted above, most utilities have developed their plan in concordance with the IWA/AWWA water balance model and have implemented a real loss management program.  While these efforts are prudent, measurable, and necessary, they fail to fundamentally consider the customer.

There is, however, a proven method from the consumer goods industry that can help address this gap. First defined in 1885[5], a generally accepted communication “rule of thumb” about reach and frequency is that a message needs to be received 14 times before a recipient’s attitude regarding a message moves from ignore to active acceptance.

Today, the generally accepted frequency for a message to be delivered before it is understood, accepted, and supported is about seven times. To move customers from apathy to actively supporting investments to protect the quality of the water they rely on a utility must create tailored, cost-effective communications that explain:

  1. Why the investment is necessary
  2. What the investment will do for the customer
  3. How the project will specifically impact that customer, for example, interruptions in service that will impact that specific customer
  4. What the consequence of deferring the investment will be
  5. What the utility is doing to protect the health of the individual customer.

As shown in Figure 5, moving customers from disinterest to active support requires multiple engagements, each with a clear message that is tailored to the individual customer. Effectiveness of outreach is directly proportional to how the messaging is coordinated. An effective campaign builds on the education in stages one and two, communicates the exact impact to the individual residential or business customer in stage three, and ends with a reiteration of the customer benefit, empowering the customer to manage the financial consequence.

Figure 5 - Communicating Investments to Reduce Real Water Loss


WaterSmart has the experience to deliver just such levels of improved customer engagement.  We strongly advocate an approach to customer engagement that takes the goals of the utility into account along side the benefits that a given program or investment will offer to the end-use customer.  Only by taking a wholistic view on engagement will a water utility begin to build stronger relationships with its customers, thus paving the way for ongoing investment, greater system resilience, and a true partnership between utility and rate payer.



[1] The AWWA published the definitions for water loss control formulas and purposes here.

[2] Will Jernigan, P.E., State of the States: Emerging Water Loss Regulations in the US, 2014, Water Online.

[3] EPA publication on the control and mitigation of drinking water losses.

[4] A Google News Search on 10-24-15 yielded 8 pages of news items posted in the preceding seven days that included the words “boil advisory” and three pages for the words “boil alert”.

[5] Thomas Smith, Successful Advertising, 7th edn, 1885, summarized here.

VertexOne is the recognized leader in SaaS platforms for critical business processes of utilities across North America. Through a wide range of innovative services and solutions —including the VertexOne CompleteTM SaaS Solution for Utilities comprised of the Customer Information System (CIS), Mobile Workforce Management (MWM), Meter Data Management (MDM), Digital Customer Engagement and Customer Self Service, and now the addition of WaterSmart solutions and services—VertexOne helps utilities more efficiently deliver a compelling customer experience; reducing the cost to serve customers, increasing operational efficiency, improving customer satisfaction, and driving utility operations forward. VertexOne takes on the heavy lifting of keeping current with the rapid pace of technology changes through our VertexOne CompleteTM SaaS offering, so utilities don’t have to—leaving our customers more time to focus on core utility business while leaving the technology to us.

Customer Engagement

Subscribe to our Blog