Retail Water Market Monitoring Future Retail #1 Phil Marshall 23 March 2018
Who we are … ▪ Independent, statutory ‘Water Watchdog’ in England and Wales ▪ Offices in Birmingham and Cardiff ▪ Teams operating in four English regions and Wales ▪ Advocate for household and non-household / business consumers ▪ Help consumers with advice and with their enquiries and complaints ▪ Carry out consumer research and policy analysis ▪ Work with and influence stakeholders ▪ Both within and outside the water sector ▪ Including Governments, regulators, water companies, retailers, TPIs, trade associations ▪ Analyse and report on performance of water companies and retailers ▪ press for improvements where needed ▪ Identify and share good practice for the benefit of consumers in the round
Market monitoring … ▪ Who? ▪ Defra, Ofwat, MOSL & CCWater ▪ What? ▪ Compliance (Ofwat) ▪ Awareness (CCWater & Ofwat) ▪ Switching rates (MOSL) ▪ Renegotiations (Ofwat?) ▪ Complaints (CCWater) ▪ Consumer experience / satisfaction (CCWater & Defra) ▪ How? ▪ Data reporting ▪ Consumer research
Market reporting … ▪ How and when? ▪ Switching data and complaints - quarterly updates and annual report (MOSL) ▪ Complaints - quarterly updates and annual report (CCWater) ▪ ‘State of market’ assessment – annual report (Ofwat) ▪ Research reports – adhoc (Ofwat & CCWater)
Awareness … ▪ 38% of SMEs are aware that they can switch water service provider July 2017 January 2018 14% 18% Possible 43% 44% Not Possible Don't know 43% 38% Do you think it’s possible to switch the water service provider for your organisation? (n=502) CCWater / Populus research
Awareness … ▪ As business size increases, so does awareness…. 15% 16% 16% 16% 17% Possible 37% 36% 44% 46% 48% Not possible Don't know 49% 48% 40% 36% 37% Total Sole Traders Micro Small Medium CCWater / Populus research
Awareness … Fewer than 1 in 3 SMEs think it’s possible to negotiate with their existing ▪ water services provider….. July 2017 January 2018 24% 25% Possible 44% 44% Not Possible Don't know 32% 30% Do you think it’s possible or not possible to negotiate a CCWater / Populus research better deal with your water service provider? (n=502)
Awareness … ▪ As business size increases, so does awareness…. Possible 19% 22% 25% 25% 29% 36% 38% Not possible 45% 44% 50% Don't know 45% 40% 31% 30% 21% Total Sole Micro Small Medium Traders CCWater / Populus research
Awareness … Almost half of SMEs aware of the market have sought more information….. ▪ Taken act ction to o switch ch your organisation’s water Contacted existing water & waste water retail Tried to find nd out out mo more about the choices and wastewater retail service provider service provider to ne nego goti tiate a better deal my organisation has 5% 7% 8% 9% 10% 9% 44% 48% 58% 59% 70% 67% 47% 44% 35% 31% 24% 24% July 2017 vs January 2018 Yes No Don't know CCWater / Populus research
Consumer experience … ▪ SME viewpoint - Low levels of awareness, low bills and low levels of interest ▪ Supplier communications have largely been ineffective in promoting the market Incumbent retailers’ branding reinforces a ‘nothing has changed’ message ▪ ▪ The market appears to offer few, if any benefits, to SMEs ▪ Most would prefer to renegotiate a better deal with existing supplier than to switch ▪ They don’t know how to get information about suppliers or deals ▪ TPIs might help them overcome barriers to switching, etc. ▪ SME & TPI viewpoint - r etailers don’t appear interested in the SME market CCWater / Defra / Creative Research
Consumer experience … Large consumer 1 viewpoint – a good opportunity but not yet being realised ▪ ▪ Awareness is much better and they have a good grasp of the changes ▪ Market represents an opportunity for improvement – billing, service, water efficiency ▪ Expectations of cost savings are relatively low (and realistic) in view of low retail margins ▪ Market to date doesn’t present a positive picture and benefits are not being fully realised ▪ Ofwat, Defra and the industry appear not to have learnt lessons from energy and from Scotland ▪ Problems encountered just as likely to be with retailers with experience of Scottish market ▪ Large consumer & TPI viewpoint - more upbeat and optimistic ▪ Issues are seen as being initial teething problems ▪ A lot of effort appear to be still needed to get things right CCWater / Defra / Creative Research 1 250+ employees
Consumer experience … ▪ Ways to increase SME awareness and engagement Multi-channel communication including mainstream media – ‘get it in the news’ ▪ ▪ Clear messages on bills about right to switch ▪ Easy to access, useful information on switching, renegotiating, etc. including customer reviews ▪ Price comparison websites ▪ Easy to access help and advice ▪ Increased TPI activity ▪ Is it better to resolve current issues first? ▪ Benefits have to be evident and real for SMEs including worthwhile savings ▪ The consumer experience needs to be much better ▪ Poor performing retailers need to improve and improve fast CCWater / Defra / Creative Research
Consumer experience … ▪ Ways to maintain and increase large consumer engagement ▪ Resolve the apparent ‘systemic problems’ in the market currently or risk confidence in the market ebbing
Consumer complaints… ▪ Insight into what (and who) is causing consumer dissatisfaction ▪ Complaints received by retailers ▪ Written & telephone ▪ Reported monthly to CCWater ▪ Data quality issues ▪ Anonymised written complaints data shared with retailers ▪ Annual report to be published in June* ▪ Complaints received by CCWater ▪ Escalations / unresolved complaints ▪ Formal investigations ▪ Quarterly update published ▪ Annual report to be in June* * Covers England and Wales
Consumer complaints… Year-to-date ( April 1 st – February 28 th ) ▪ Total 133 1414 56 143 47 425 52 2270 0 393 33 107 67 106 24 730
Consumer complaints … Complai aint nts and d enqu quiries es from om NH NHH cus ustom omers s to CCWat ater er
Consumer complaints… ▪ The context: ▪ It was expected that complaints would rise in the first year following market opening ▪ The issues seen in energy and telecoms have not materialised ▪ Complaints are primarily about the service they are receiving, not about the market ▪ The performance of three retailers is ‘skewing’ the picture But… ▪ These poor performing retailers account for over half of total market share ▪ c.60% of market share, c.80% of complaints
Our assessment… ▪ So far so good! ▪ …. but more effort and focus is needed: ▪ To increase SME awareness of the market ▪ To make the market work for SMEs ▪ To provide accessible, useful information and advice for all NHH consumers ▪ To enable and encourage NHH consumers to re-negotiate and / or switch ▪ By retailers to improve their service offering and customer satisfaction ▪ By retailers to reduce the level of complaints
Visit us at www.ccwater.org.uk Follow us @WaterWatchdog Contact me: phil.marshall@ccwater.org.uk
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