Water Industry News

An Open Letter to the Water Retail Industry

On the 25th March the National Audit Office published the Department for Environment, Food & Rural Affairs’ report on “Water supply and demand management”, which reflects on the challenges facing the water industry in England, how Defra is addressing them through its oversight of water regulators and the water companies.

Perhaps unsurprisingly, to those organisations and businesses, which are closest to the market and actively engaged in its operation and also in trying to address its key challenges, the report summarises its finding in respect of a number topics that relate to the intended water efficiencies sought from the non-household water retail market’s deregulation in 2017.  It would appear that measurement of the effect of increased competition on the improved water efficiencies within the non-household sector is not possible, and therefore the desired 2% savings across the 5 years following de-regulation may never be adequately proven.  As a result of this and other observations made in the report, one of the key findings is to conclude that ‘The government has not succeeded in its attempt to reduce non-household water consumption through increased competition’.

Citing a 382% increase in complaints made via the Consumer Council for Water (across 2018-2019 statistics) from business customers since the ‘open water market’ was launched, this ‘news’ is already very well appreciated by those businesses currently operating within the market.  Even now, those businesses are already working with the regulators and operator to help the market to improve customer service levels, develop management and process methodologies to address some of the significant issues brought about as a direct result of the deregulation process, and to begin to understand the enormous task that now casts a dark shadow over every water company’s administrative responsibilities for years to come, which is that of market data correction.

Despite the significant industry and market knowledge that clearly exists within the regulators, market operator, wholesalers and non-domestic water retailers, it is widely felt by some of the most experienced water consultants and TPIs in the UK, many with decades of experience behind them, that the education, insight, guidance and commercial motivation necessary to truly address some of the challenges being levied from government all the way down to the water retailer (as the customer’s ultimate point of contact), can only be provided by actively welcoming and seeking a deeper, collaborative engagement with customer champion businesses, such as SwitchWaterSupplier.com.  As the often-quoted Steve Jobs once said, “Do not try to do everything.  Do one thing well.”

Experienced water consultants, whilst commercially motivated, of course, are equally operating at the coalface of the non-household water retail market, using a different set of industry-specific skills to those found amongst the various key stakeholders.  These bona fide experts bore witness to the overnight introduction of the billing data errors at the point of market de-regulation, and on a day-to-day basis actively pursue opportunities to work with their clients to independently audit bills, identify billing errors and seek to correct the data whilst recovering overcharges.

The process of data correction and administering refunds due to historical overcharging naturally involves significant resource from both the water retailer and wholesaler in order to bring about a conclusion which is both ethical and proper in respect of the customer’s interests.  But, it doesn’t go unrecognised by the consultants and TPIs, that in these times of market immaturity, and with the burden of responsibility placed upon water retailers to significantly improve service levels and to further deliver on a broad mandate of additional licensee obligations, this is having to be done whilst also developing and executing the water retailer’s own marketing strategies, trying to acquire new customers in a competitive environment, and whilst working with gross profits derived from narrow sales margins.

In light of the National Audit Office’s report, which once again increases the intense scrutiny on market operation, and calls on both wholesalers and retailers to ‘deliver improved levels of water efficiency in the non-household sector’, SwitchWaterSupplier.com would like to appeal to all key stakeholders – but most specifically the regulators, market operator and water retailers – to seek deep collaboration, and even the provision of ‘white-labelled’ service offerings, to provide expert water audits and billing data error identification and correction advice to address, head-on, those areas where there exists either deficient resource or contextual expertise to bring these services in-house for water retailers. Our water experts are already working with two water retailers to provide exactly this type of collaborative service, and having gone beyond trail periods, customer refunds in excess of £1.2m across just 80 businesses have already been identified, which serves as a landmark example of the effectiveness of the organisations working together to correct billing and data issues.

By working together, whilst also acknowledging the shared commercial opportunities that exist in such partnerships, water retailers can proactively offer a truly compelling customer proposition, where water efficiency, water bill validation and data correction services are concerned.  Provided to the customer entirely under the guise of the water retailer’s own brand, yet working as one team, it is possible to make significant strides in to the volume of work to be done to tackle errors in English market data and to offer water efficiency consultancy and leakage control services that can begin to deliver on, and accelerate, the wider effort to fulfil the government’s objectives for the open water market.

It is widely known, now, that SwitchWaterSupplier.com has developed the first independent and transparent platform to allow customers, brokers and TPIs (on their customers’ behalf) to approach both the entire English and Scottish markets with invitations to tender and quote for contracts on multi-location (multi-SPID) opportunities in a further effort to help deliver on the government’s original objectives, stimulating a healthy competitive environment where customers can seek the best possible price for their water and waste water contracts.

Whilst the reality of increased competition combined with ever-limiting margins dictate there will inevitably be a degree of apprehension amongst water retailers as the concept of a new route to market begins to take shape, it is clear to us that such a new way of bringing customers and retailers together will become commonplace and routine.  Within a short space of time, as both customers seeking to manage their own interests, and brokers who would wish to – or will become be pressured to – offer an independent and transparent approach to the entire market, turn to SwitchWaterSupplier.com and similar platforms that will inevitably follow our lead, the idea of costly call-centre activities and direct mail being amongst the few methods open to water retailers to attract new customers, will prove of much less value (for money) and become more difficult to justify as a sales tactic than they already are.

SwitchWaterSupplier.com would therefore welcome the market’s response to our call to action and its proposal, and we would like to discuss the opportunity to remove the arms-length that has historically separated key market stakeholders from consultants and TPIs with a view to working more closely together to reverse some of the criticisms made of the infant market and provide a multi-stranded strategy to address the majority of current issues.  Please reach out to us via email to retailer@switchwatersupplier.com.

Yours faithfully,

Tim Guest
Director & Co-Founder, SwitchWaterSupplier.com