Business Customer Insight research 2019

We collaborated with the water regulator, Ofwat, to commission research between March and June 2019 to investigate business customers’ experiences interacting with the water and wastewater non-household retail market in England, which opened in April 2017.  This research was used as part of Ofwat’s second annual ‘state of the market’ review of the business retail water market.

Our researchers, Opinion Research Services, surveyed 2,000 businesses, charities and public sector organisations (of all types and sizes) and held depth interviews with 73 businesses to look at:

  • Awareness of the market.
  • Overall satisfaction.
  • To what extent they have engaged with the market (and how).
  • Experiences of searching for market information and comparing what retailers offer.
  • Problems being encountered and issues causing complaints.
  • General contact with their retailer.
  • General views of the market.

Key findings:

  • 53% of all business customers are aware of the market (up significantly from 48% last year).  This rises to 65% awareness among larger businesses (though larger customers’ market awareness was 89% in Ofwat’s research last year).
  • 43% awareness amongst eligible business customers in England in our Testing the Waters (pdf) business customer research, conducted from April to August 2018.
  • 13% of business customers have engaged with the market by either switching, renegotiating terms with their current retailer, or considered doing so (and either haven’t switched yet or decided not to).  Only 5% of switchers experienced problems with the process.
  • Take up of water efficiency services offered by retailers remains very low – only 0.3% of switchers and 4% of re-negotiators have received water efficiency advice or leakage control services as part of the ‘package’ of benefits.  This is broadly consistent with last year.
  • Only 6% of switchers were contacted by their old retailer before signing up to their new retailer, and even fewer were approached after already having agreed to switch. This suggests that retention activities of retailers are low.
  • Around four fifths (84%) of switchers reported that the benefits they received either met or exceeded their expectations.
  • 8% of switchers and 9% of re-negotiators had benefited from consolidated bills (i.e. single bills for multiple sites).  This goes up to 21% if only larger businesses are counted.
  • Satisfaction with the water market as a whole is at 64%. Less than one in ten in both surveys report being dissatisfied.
  • The largest motivating factor for business customers to renegotiate or switch is still to reduce bills, in line with earlier research.  However, smaller businesses are less motivated to engage with the retail market because they say the small savings they could achieve do not justify the time needed to engage with the market. 11% of customers said a reduction of 1% to 5% would encourage them to switch retailer, while 35% said they would expect a 6% to 10% reduction, and 16% said 11% to 15%.
  • 80% of businesses said they were satisfied with their retailer. Of the 8% who were dissatisfied, 60% of them cite billing issues as a reason (common examples include inaccurate meter readings and bill calculations, or not receiving bills at all).
  • While this is an overall measure of customer satisfaction, our ‘Testing the Waters’ (pdf) business customer research from April shows that while there is higher satisfaction with water services (87%) and wastewater services (88%), satisfaction with  retail services (billing and customer service) was lower at 70% and satisfaction with value for money is 72%.
  • 34% of business customers that had engaged with the market did so via a broker (the majority of them were satisfied with what the broker provided for them).  The rest were either approached directly by a retailer or did their own research on what the market offers.  8% of customers said it was difficult to find information or make comparisons.

The research results show that while overall market awareness among customers is higher, more could be done to raise awareness around choice and benefits the market may offer (not just possible bill reduction, but services such as water efficiency assistance and leakage detection).

Many smaller businesses also do not see any benefits from switching or renegotiating that justifies the effort to engage with the market, and for some businesses better information is needed to help them more easily explore what’s on offer and make comparisons.

This shows there is far more to be done for future research to show not only that customer awareness of the market has continued to increase, but that active engagement in the market and satisfaction with what it delivers has also improved.

The research reveals that a number of customers had negative experiences,  often due to billing issues, so more should be done to address the root causes of these problems (such as old or inaccurate  meter readings).  There also needs to be improvements in the interactions between  some wholesalers and retailers to improve the customer experience.   These issues need to be addressed swiftly and thoroughly  to improve market functioning – this should help increase customer satisfaction in the future.