The water industry in Melbourne, Australia is owned by the State Government of Victoria and operates on a comparative competition model. Three retail water companies deliver water and sewerage services to the people of Melbourne, and although they do not compete for customers, they do compete on a comparative basis in the areas of customer service and asset management. This is done within a regulatory framework which provides independent oversight and measurement of their performance. This model has driven very significant performance improvements in all business areas, particularly in customer service delivery. A number of these improvements resulted from the implementation of innovative solutions to business issues, which have been identified as a result of customer research. The development of Yarra Valley Water (YVW) as a truly customer-focused organization resulted from attention to a number of elements that are fundamental to any business, as part of a management strategy focussing on customers. Attention to each of these elements is important to the successful overall performance of the company. This paper discusses the background to the reforms undertaken in the industry, and how YVW chose to respond to customer service delivery as part of the ongoing journey towards service excellence. On the way, the company has been recognized as a service leader by winning Australian National Customer Service Awards for each of the last three years. Includes figures.