We wanted to know whether residential customers would be interested in having a choice of water company. So we commissioned research from Accent to help understand customer preferences and concerns.
We also considered complementary research by the Consumer Council for Water which explores how much customers expect to save in a competitive market.
To ensure we took the thoughts and opinions of as many customers as possible into account we added to our commissioned research by:
– carrying out local and national media activities
– promoting discussion through social media and on leading discussion forums, such as the our Money Saving Expert forum
Is choice just a good idea?
Some customers thought that choice would be a good idea.
Freedom to choose is something customers want – with our survey findings suggesting that approximately half of customers would welcome the choice coming as a result of competition. It feels 'more fair' and gives the idea of ‘freedom’ rather than being tied to the local company.
"Up to 10 years ago I didn't give it a thought but having thought about this now I do feel why don’t we have a choice?"
Customer in the South East
Our research also found that customers struggling or in debt were more positive about the idea of choice than average.
Some people thought the opposite.
A minority (13%) of customers thought choice was a bad idea.
Our research found that older customers were least enthusiastic about switching and were concerned about the burden of choice and confusion about who to contact in an emergency.
Perhaps it depends on whether you like your current company?
Our reasearch found that customers value the ability to vote with their feet if their supplier does not provide the service they expect.
"I had to challenge and fight when I had a problem with my meter – if there was competition I would have switched immediately."
But, this is less important if they feel that their current level of service is good.
"I'm satisfied where I am, I haven't got any problems and everything is hunky dory."
These results were similar to customers feedback through social media.
Some customers want to switch away from their current company.
Or stay with the same provider.
Or a bit of both
Our research found that customers were interested price-related loyalty discounts, linked to either number of services provided or usage based. This could benefit customers who liked their company and so didn't want to switch.
Or your experience in other sectors?
Some people compared water to the energy sector
"Well if you've gotta pay for it. Anything that you have to pay for I think should be competitive. Anything that you have to pay for, whether that’s gas, electricity, chocolate bars, cigarettes."
Customer, Bristol
The water sector is often compared to the energy market But, although they are both utilities, there are big differences. We expect customers bills to be more stable than in the energy sector and for differences in bills to be smaller.
There are lessons to learn from energy and other sectors, including on customer protection and how new technology can reduce customer search and switching costs.
And wanted protection against mis-selling
Our research found that one of the key elements of protection customers want is around marketing – no cold calling, no hard selling, no door-to-door selling, and simple and easy to understand information.
Or whether you have enough time to switch?
Some people felt too time poor to take advantage of more choice.
It must be simple and easy for customers to engage in the market. We recognise not all customers will choose to, but it should be easy to compare deals and switch, and the regulator ought to step in if it is not.
Or whether there will be savings and service improvements ?
Although many customers say they would want significant savings to switch, half of the customers we surveyed identified other factors that would be attractive to them, such as service improvements and innovation. For example, the convenience of a single utility bill including energy and water, or water efficiency services to help reduce consumption and lower bills, while helping to improve resilience.
Our research also found that customers feel that the market should be easy to switch in terms of time and cost, fair and open to all customers. Some expect something similar to the switching guarantee service offered by banks to be put in place. They expect one point of contact and a guaranteed timeline by when the switch will be achieved.
The way we set up and regulate the market needs to mitigate the risk that customers are treated unfairly and miss out on potential benefits. It is also important that vulnerable customers have access to the right support and those who are struggling with their bills receive timely, effective help.
Or the opportunities for new services?
Some people felt that there are opportunities for innovation.
My water company does not make an app available for example; they almost seem to get annoyed when I try to submit meter readings throughout the year as it does not match their billing cycles even though I want to identify if I am using more water than normal this approach is more consumer friendly.
from CitySlicker MoneySavingExpert forum member
Innovation is one of the key benefits we expect to see in a successful market.
It is time to look at what role a competitive retail market could play in delivering better outcomes for water customers and wider society.
