Comment: The challenge of bad debt

With bad debt high on the industry agenda, Martyn Oakley, customer service director at Anglian Water, argues that effective data collection will be the solution to an ongoing problem.

Necessity is often the mother of innovation. When you are mandated by law to continue supplying customers who cannot or will not pay for products and service, you have to be good at debt management. In my opinion, that is why many of the larger water companies can be seen to be effective practitioners in collections.

Ultimately, it is customers that bear the costs of bad debt. Nobody likes a price rise but for some, a small bill increase can tip the balance between water being affordable and not; putting yet more customers at risk of being in arrears.

The challenging economic climate has squeezed household budgets and low earners have seen a notable drop in income. In the face of other household bill increases, customers in financial difficulty often see their water bill as a low priority.

Data and the effective use of data is the key.

At Anglian Water, we have worked with Experian to create an integrated approach to debt collection which has resulted in improved collections and billing, leading to a reduction in consumer debt of over £500,000 in the first 12 months of the programme. We are now able to quickly and accurately identify the most at-risk households and recommend treatments and outcomes based on individual circumstances.

By taking an integrated, analytics led approach, organisations are able to counter the current economic challenges and balance good collection rates with good customer service.