Column: customers need to know what’s coming to benefit

As the countdown to the opening of the non-domestic English water market continues, we are finally beginning to see an increase in consolidation and acquisition activity. At Business Stream, we have made our own bold move by acquiring a major customer portfolio to ensure we are well placed when the market opens. However, we are by no means alone in our efforts to prepare for the opportunities on offer next April.

In 2011, the UK government published a white paper underlining its desire to create a fair, competitive market offering more choice for business customers. One of the clear consequences of greater competition was the inevitability of some incumbents exiting the market and others aligning their operating models to the new market. With eight months to go until the market fully opens, that’s exactly what we’re seeing now. And with the pace of deal-making intensifying in the lead up to 2017, it is customers who stand to benefit most from this sector shakedown.

A key argument presented by the advocates of full competition is that the move will drive innovation and improve the range of services and tariffs available for customers. With limited scope for price competition (a consequence of the low margins in England), suppliers will have to differentiate themselves by other means. Customers are already seeing greater choice in terms of potential suppliers, but where they stand to gain the most is in the range of propositions on offer through these suppliers.

Over the past eight years of Scottish competition we have developed our customer offering to stand out in an increasingly competitive market. Designing and delivering added-value services and continuously raising the service bar have been key elements in our strategy to retain and win market share in Scotland.

The current captive and protected customer base in the English market offers limited incentives for companies to invest in improving the customer experience. The advent of competition is stimulating a new mind-set with increased focus on adding value for customers.

While most medium-size businesses and corporates will understand the changes taking place in England next April, there is still much to be done to ensure that SMEs, which represent 90 per cent of the English market, fully understand the choices available. Many of these smaller businesses lack a dedicated procurement team, so it is incumbent on us all to ensure that there is sufficient awareness of the ability to switch water utility come April 2017. This awareness is vital for the long-term success of the market, and for motivating suppliers to innovate and improve services for all customers, not just the biggest.

Following MOSL’s recent announcement that its programme of work has returned to amber status, the shadow market is now in clear sight. As companies begin to declare their hands, and the industry makes its final preparations, we need to ensure that England’s non-household customers know what’s around the corner so they can make the most of the benefits available.

There are eight months left for market participants to conclude their preparations, and only two before shadow operation. The biggest change in the UK’s water market for a generation is beginning to feel very real.