In July 2019, OfWat (the water services regulation authority) released its state of the water retail market report for 2018/19. While the market is in its second year, they analyse customer behaviours, service levels of water retailers and wholesaler performance. In this blog, we cover the key points from this report and reflect on our own levels of service in our second year of the market.

Customer behaviour

Since the market opened competitively it has been the retailer’s responsibility to educate customers of their choice to switch retailer. Reasons why business customers may want to switch include, customer service levels, price margins, simpler billing and sustainability offerings. OfWat reported, ‘just over half (53%) of all customers are aware of the possibility to choose their retailer…’ which indicates a steady increase of 5% in comparison to its previous year. While half of business customers are aware that they can switch, their activity in changing suppliers is much less (13% of customers being active such as switching or renegotiating). Making it harder for retailers to succeed in a low profit margin industry. This has even resulted in one retailer, Aquaflow, going in to liquidation.

Affinity for Business’ efforts focus on informing businesses of the opportunity to switch, especially it’s water only customers that haven’t been active in the market yet. We do this through our interactions with customers, for example, over the phone, on Trustpilot, social media and other marketing activities.

The service levels of water retailers

Complaint levels remain higher than ever before as Consumer Council for Water (CCWater) reported a 20% increase in retailer complaints over the year 17/18 to 18/19. With 70% of these complaints in 18/19 regarding billing and charges.

Retailers’ aggregate MPS performance deteriorated in the second year – with only 75% of tasks completed on time, against 89% in year one. Almost all retailers, with the exception of Water2business and Affinity for Business, saw their performance worsen.

OfWat

We position ourselves as being ‘not too big to care’ about our customers. By listening to customers and putting them first, we have improved our customer service levels (an important indicator of this is our Trustpilot ‘Excellent’ rating). You can find out more about our efforts in lowering complaint levels in water retail in this blog.

Wholesaler performance

OfWat reported poor performance of wholesalers in meeting industry requirements, increasing retailer costs and driving down customer satisfaction. In particular the lack of performance from wholesalers has raised concerns in:

  • The communications between wholesalers and retailers
  • The measures of wholesaler performance
  • Improving initiatives around reputation
  • Creating better incentives around financial benefits

 

To read the full OfWat State of The Market Report 2018/19, click here.

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