Customer Satisfaction and the Willingness to Pay for Cleaner Water to Sustain Clean Water Supply in Bengkulu City, Indonesia

Abstract

Clean water is a basic human need. One of the drinking water supply systems is held by a regional drinking water company. Business profits of regional drinking water companies are crucial things that allow companies to continue to exist in business and expanding the service to supply clean water to the wider community. Ensuring availability and sustainable provision of clean water is important since it has been targeted in Goal 6 of Sustainable Development Goals. The existence and continuity of business activities are very inseparable from service quality and customer satisfaction. Therefore, customer satisfaction and willingness to pay for clean water supply are essential factors for the company s continuity and the sustainable management of clean water for the community. The study aimed to determine the level of customer satisfaction for the provision of clean water and to uncover the factors affecting the community s willingness to pay to improve clean water delivered. The method for getting customer satisfaction index used Structural Equation Modelling and indexing. Contingent valuation method and logistic regression were employed for analyzing willingness to pay and uncover the factors affecting it. The results showed that the overall customer satisfaction level was moderately satisfied with a Customer Satisfaction Index of 66 with priority improvements to increase customer satisfaction, especially on attributes of turbidity conditions of water, water quality assurance, and water price level. The result indicated that fifty-six percent of the respondents are willing to pay for cleaner water. The only factor influencing the willingness to pay for the cleaner water supplied is the average monthly water bill