Small businesses being left behind by water market

Small businesses have not been empowered to make the most of their freedom to switch water retailer, during the first two years of competition in England.

The Consumer Council for Water (CCWater) says low awareness of the retail water market and a lack of information on switching options is continuing to prevent many businesses from shopping around for a better deal.

The latest wave of research published by the Water Watchdog shows only about 2 out of 5 small and medium-size businesses (SMEs) think they can switch their water provider1. It suggests awareness levels have remained static since CCWater began tracking customers’ views three months after the market opened.

Mike Keil, Head of Policy and Research at CCWater, said: “Small businesses have not been empowered with the knowledge and tools they need to punish poor service and enjoy the potential benefits of switching or renegotiating.”

“Many SMEs feel they are being overlooked by retailers and unless that perception changes, customers will continue to miss out.”

Switching can potentially help businesses save water and money, as well as secure a better level of service. It could also provide an escape route for some of the thousands of customers who have complained to CCWater about their retailer during the past two years. The watchdog received just over 1,000 non-household complaints in the last three months of 2018 – almost 200 more than during the same period in 2017.

As well as having the right to switch, customers can also try to negotiate a better deal with their existing supplier. However, less than a third (29%) of SMEs are aware they can.

Signs are emerging that once small businesses are aware of the market they are increasingly motivated to explore their options. Over the past six months a growing number of these SMEs say they have taken steps towards switching, with 2 out of 5 dipping into the market. About half of ‘market aware’ smaller businesses have looked for more information.

Larger businesses remain more active in exploring their choices with medium-sized businesses (50-249 employees) around twice as likely as micro businesses (fewer than 10 employees) to have looked for market information, switched or negotiated a better deal.

CCWater is continuing to raise awareness of the market through its own communications and work with influential representative bodies – including the Chambers of Commerce, Federation of Small Businesses (FSB) and National Farmers’ Union. But the watchdog believes retailers can improve the marketing of their services to smaller businesses, to help them understand how choice could potentially benefit them.

You can read the full survey results here:

 

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