Retail Water Market Monitoring Future Retail #1. Phil Marshall 23 March 2018

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1 Retail Water Market Monitoring Future Retail #1 Phil Marshall 23 March 2018

2 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

3 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

4 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)

5 Awareness 38% of SMEs are aware that they can switch water service provider July 2017 January % 18% 43% 44% Possible Not Possible 43% 38% Don't know Do you think it s possible to switch the water service provider for your organisation? (n=502) CCWater / Populus research

6 Awareness As business size increases, so does awareness. 16% 16% 17% 16% 15% 44% 48% 46% 36% 37% Possible Not possible 40% 36% 37% 48% 49% Don't know Total Sole Traders Micro Small Medium CCWater / Populus research

7 Awareness Fewer than 1 in 3 SMEs think it s possible to negotiate with their existing water services provider.. July 2017 January % 25% Possible 44% 44% Not Possible 32% 30% Don't know Do you think it s possible or not possible to negotiate a better deal with your water service provider? (n=502) CCWater / Populus research

8 Awareness As business size increases, so does awareness. 25% 29% 25% 22% 19% Possible 44% 50% 45% 38% 36% Not possible 31% 21% 30% 40% 45% Don't know Total Sole Traders Micro Small Medium CCWater / Populus research

9 Awareness Almost half of SMEs aware of the market have sought more information.. Taken action to switch your organisation s water and wastewater retail service provider Contacted existing water & waste water retail service provider to negotiate a better deal Tried to find out more about the choices my organisation has 5% 9% 7% 10% 8% 9% 70% 67% 58% 59% 48% 44% 24% 24% 35% 31% 44% 47% July 2017 vs January 2018 Yes No Don't know CCWater / Populus research

10 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 - retailers don t appear interested in the SME market CCWater / Defra / Creative Research

11 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 employees CCWater / Defra / Creative Research

12 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

13 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

14 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*

15 Consumer complaints Year-to-date (April 1 st February 28 th ) Total

16 Consumer complaints Complaints and enquiries from NHH customers to CCWater

17 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

18 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

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