Brokers can bridge water competition awareness deficit

With the opening of the non-domestic water market close at hand, speculation about how it will function in its early days - especially given low awareness levels among potential customers - is rife. David Cockshott sets out his view of the role third party intermediaries will play.

The business water market opens to competition in just two short months, yet a recent survey by Ofwat found only one third of businesses were aware that deregulation was imminent. Contrary to some opinions in the industry, consultants and brokers will play a vital role in the business water market, from driving awareness to helping as many organisations as possible benefit from the changes.

Whilst Open Water’s newly launched campaign will undoubtedly help to boost awareness in the market of the forthcoming changes, third party intermediaries (TPIs) will drive engagement not only by improving awareness but also by shifting it into action. Half of those surveyed would consider switching – helping them to do so, and encouraging the other half to investigate their options, will be important: as deregulation will completely change the water industry, TPIs will play a key role in guiding businesses through the new market. In fact, TPIs have already been talking to businesses about deregulation for some time, helping to explain what Open Water means for them and getting them prepared for the April start date.

Energy TPIs have developed longstanding relationships with their customers, built on trust and an in-depth knowledge of their business. They are relied on to identify opportunities to improve procurement strategies and therefore incorporating water into a utilities solution is the pragmatic approach.

One of the most important factors highlighted in the Ofwat survey was a desire from businesses for clear information on suppliers and tariffs available to make an informed decision. Impartial advice from third parties will aid this, helping them to navigate the market in addition to assistance liaising with different suppliers to build a bespoke offer in line specific customer requirements.

However, the role of the TPI is about much more than being a broker at the point of sale. Whilst TPIs may be experts in the procurement process and working with suppliers to build the optimal contract, our role is to act as a true consultant to inform, create and optimise every part of a business’ approach to utilities. Bringing water under the same roof as energy and gas – a joint utilities strategy – enables a consistent approach to budgeting, reporting and efficiency measures.

This is particularly important for water because savings available to businesses in England may well be modest for the first few years of competition. Thinking more broadly about the benefits of deregulation is essential. In the Ofwat survey, organisations in the retail sector were some of the least likely to be aware of the market opening up – yet a retailer, with its multi-site portfolios often in different supply regions, will be well placed to benefit the most from the efficiencies of supply consolidation.

The Ofwat survey also focused on what might incentivise businesses to switch suppliers beyond simple savings. Smart meters to monitor usage and identify leaks scored highly, suggesting that business attitudes towards energy efficiency and a ‘norm’ culture of reducing energy consumption could easily be transferred across to water with the right support. Deregulation – from putting water on the agenda to accessing an organisation’s water data in one place for the first time – is also a major opportunity to drive engagement in water efficiency. Broadening out a company’s sustainability strategy to include water and helping them to act on it will also be crucial.

TPIs work best in partnership with suppliers, to make sure businesses are well served, well informed, and well placed to benefit from an open market. Our relationships and ability to create and support with the delivery of a holistic utilities strategy can only benefit the market in its infancy and as suppliers adapt and evolve in a maturing market to meet business’ needs. The success of TPIs in the energy industry can be replicated in the water market, to work for both suppliers and customers alike.