The latest issue of Water Spectrum issued yesterday. It included analysis of MOSL’s latest switching data, which show that a year after business market opening in England, well over 100,000 supply points (4.6% by meters and 10.5% by volume of water) are no longer buying water and sewerage services from their incumbent.
A lot of the focus for switching has been driven by price, but we think there are also three other factors in play, all centred on innovation:
1. Customer service
One of the key advantages of the competitive market is that large multi-site businesses can now choose from a number of suppliers, which can then provide consolidated billing for all sites, and a range of other improved services to suit their needs.
For example, instead of receiving a multitude of different bills, multi-location customers are now able to strike deals that consolidate their financial commitments into a single transaction. Added to this are opportunities to pay electronically. For many large multi-site consumers this has been the biggest benefit of the new market and has been one of the driving factors in switching.
2. Management services
A water services market is rapidly developing where customers and suppliers are working together to understand and control use of water and sewerage services. This means that buying in the competitive market is more than just the cheapest price, with customers instead considering water and effluent as service needs rather than just commodities. As a result, many suppliers have designed and implemented a wide range of innovation programmes that are being used as case studies to further stimulate the market.
3. Multi-utility services
One area where there was an expectation of activity was opportunities for participants in other markets, such as energy and telecoms, to expand their service offerings to the water sector.
Perhaps this is the least visible of the three factors cited here as water and sewerage services currently remain largely independent from other utilities. Indeed to date, energy third party intermediaries and brokers seem the parties most interested in bringing markets together as they seek to ensure that they do not allow their competitors the opportunity to impose on their existing client bases for the “other” utility.
We will be exploring these themes further in the coming weeks.