Expert view: Water deregulation and SMEs

“In the first industry survey, one month post deregulation, almost half of England’s SMEs are unaware of water market opening.”

In a poll of 500 small and medium-sized enterprises (SMEs) across England conducted by Wheatley, the UK’s most experienced supplier of software solutions for managing data flows and market messaging in the utilities sector, we discovered that 42 per cent are unaware of the water market’s deregulation. Just 2 per cent of respondents surveyed in May 2017 have switched water supplier. I think it is clear that more still needs to be done to raise awareness and promote the benefits of switching to all types of business.

The results indicate that the primary driver for SME switching is price, which matches customer behaviour in the wider energy sector. Fifty-eight per cent of respondents would be willing to change suppliers to someone they had never heard of, if the price was right.

The survey data shows that customer service is important for future customer retention, with interest from businesses in alternative tariffing and other value-added services that support and encourage efficient usage to deliver sustainable savings, ie 47 per cent of SMEs would use recycled water with support and incentives.

Deregulation has necessitated a centralised system for the trade in water and switching activity through MOSL’s CMOS. However, there is no common platform for other operational activities – from the prescribed bilateral processes and general enquiries through to the management of value-added services. With tight margins I would predict that effective inter-market information exchanges and efficient management of value-added services will be key to customer retention, as well as maximising alternative revenue streams.

Wheatley’s engagement with wholesalers has revealed that on some occasions up to 50 per cent of requests from retailers are rejected due to insufficient information. Consequently we have developed a relationship management solution, Emerald, which efficiently and conveniently provides a mechanism through which wholesalers, retailers and their supply chain can manage all communication, including the application of SLA’s, automated validation in line with company-specific business rules and cost impact evaluation.

If you consider that only 2 per cent of potential customers have switched to date, imagine the operational effort required when current awareness campaigns build momentum. I think now is the time to look at solutions like Emerald that are designed specifically to ensure operational efficiency and processes that benefit the end customer.

If you would like access Wheatley’s survey results visit: www.wheatleyinsights.co.uk