Retail Water Market Monitoring Future Retail #1 Phil Marshall 23 - - PowerPoint PPT Presentation

Phil Marshall 23 March 2018

Retail Water Market Monitoring

Future Retail #1

Who we are…

▪ Independent, statutory ‘Water Watchdog’ in England and Wales

▪ Offices in Birmingham and Cardiff ▪ Teams operating in four English regions and Wales

▪ Advocate for household and non-household / business consumers

▪ Help consumers with advice and with their enquiries and complaints ▪ Carry out consumer research and policy analysis

▪ Work with and influence stakeholders

▪ Both within and outside the water sector ▪ Including Governments, regulators, water companies, retailers, TPIs, trade associations

▪ Analyse and report on performance of water companies and retailers

▪ press for improvements where needed

▪ Identify and share good practice for the benefit of consumers in the round

Market monitoring…

▪ Who?

▪ Defra, Ofwat, MOSL & CCWater

▪ What?

▪ Compliance (Ofwat) ▪ Awareness (CCWater & Ofwat) ▪ Switching rates (MOSL) ▪ Renegotiations (Ofwat?) ▪ Complaints (CCWater) ▪ Consumer experience / satisfaction (CCWater & Defra)

▪ How?

▪ Data reporting ▪ Consumer research

Market reporting…

▪ How and when?

▪ Switching data and complaints - quarterly updates and annual report (MOSL) ▪ Complaints - quarterly updates and annual report (CCWater) ▪ ‘State of market’ assessment – annual report (Ofwat) ▪ Research reports – adhoc (Ofwat & CCWater)

Awareness…

▪ 38% of SMEs are aware that they can switch water service provider

43% 38% 43% 44% 14% 18% Possible Not Possible Don't know

July 2017 January 2018 Do you think it’s possible to switch the water service provider for your organisation? (n=502)

CCWater / Populus research

Awareness…

▪ As business size increases, so does awareness….

40% 36% 37% 48% 49% 44% 48% 46% 36% 37% 16% 16% 17% 16% 15%

Total Sole Traders Micro Small Medium Possible Not possible Don't know

CCWater / Populus research

Awareness…

32% 30% 44% 44% 24% 25% Possible Not Possible Don't know

July 2017 January 2018

Do you think it’s possible or not possible to negotiate a better deal with your water service provider? (n=502)

▪ Fewer than 1 in 3 SMEs think it’s possible to negotiate with their existing water services provider…..

CCWater / Populus research

Awareness…

▪ As business size increases, so does awareness….

31% 21% 30% 40% 45% 44% 50% 45% 38% 36% 25% 29% 25% 22% 19%

Total Sole Traders Micro Small Medium Possible Not possible Don't know

CCWater / Populus research

Awareness…

▪ Almost half of SMEs aware of the market have sought more information…..

24% 24% 35% 31% 44% 47% 70% 67% 58% 59% 48% 44% 5% 9% 7% 10% 8% 9% Yes No Don't know

Taken act ction to

• switch

ch your organisation’s water and wastewater retail service provider Contacted existing water & waste water retail service provider to ne nego goti tiate a better deal Tried to find nd out

• ut mo

more about the choices my organisation has

July 2017 vs January 2018

CCWater / Populus research

Consumer experience…

▪ SME viewpoint - Low levels of awareness, low bills and low levels of interest

▪ Supplier communications have largely been ineffective in promoting the market ▪ Incumbent retailers’ branding reinforces a ‘nothing has changed’ message ▪ The market appears to offer few, if any benefits, to SMEs ▪ Most would prefer to renegotiate a better deal with existing supplier than to switch ▪ They don’t know how to get information about suppliers or deals ▪ TPIs might help them overcome barriers to switching, etc.

▪ SME & TPI viewpoint - retailers don’t appear interested in the SME market

CCWater / Defra / Creative Research

Consumer experience…

▪ Large consumer1 viewpoint – a good opportunity but not yet being realised

▪ Awareness is much better and they have a good grasp of the changes ▪ Market represents an opportunity for improvement – billing, service, water efficiency ▪ Expectations of cost savings are relatively low (and realistic) in view of low retail margins ▪ Market to date doesn’t present a positive picture and benefits are not being fully realised ▪ Ofwat, Defra and the industry appear not to have learnt lessons from energy and from Scotland ▪ Problems encountered just as likely to be with retailers with experience of Scottish market

▪ Large consumer & TPI viewpoint - more upbeat and optimistic

▪ Issues are seen as being initial teething problems ▪ A lot of effort appear to be still needed to get things right

1 250+ employees

CCWater / Defra / Creative Research

Consumer experience…

▪ Ways to increase SME awareness and engagement

▪ Multi-channel communication including mainstream media – ‘get it in the news’ ▪ Clear messages on bills about right to switch ▪ Easy to access, useful information on switching, renegotiating, etc. including customer reviews ▪ Price comparison websites ▪ Easy to access help and advice ▪ Increased TPI activity

▪ Is it better to resolve current issues first?

▪ Benefits have to be evident and real for SMEs including worthwhile savings ▪ The consumer experience needs to be much better ▪ Poor performing retailers need to improve and improve fast

CCWater / Defra / Creative Research

Consumer experience…

▪ Ways to maintain and increase large consumer engagement

▪ Resolve the apparent ‘systemic problems’ in the market currently or risk confidence in the market ebbing

Consumer complaints…

▪ Insight into what (and who) is causing consumer dissatisfaction

▪ Complaints received by retailers

▪ Written & telephone ▪ Reported monthly to CCWater ▪ Data quality issues ▪ Anonymised written complaints data shared with retailers ▪ Annual report to be published in June*

▪ Complaints received by CCWater

▪ Escalations / unresolved complaints ▪ Formal investigations ▪ Quarterly update published ▪ Annual report to be in June*

* Covers England and Wales

Consumer complaints…

▪ Year-to-date (April 1st – February 28th)

133 1414 56 143 47 425 52 2270 393 33 107 67 106 24 730 Total

Consumer complaints…

Complai aint nts and d enqu quiries es from

• m NH

NHH cus ustom

• mers

s to CCWat ater er

Consumer complaints…

▪ The context:

▪ It was expected that complaints would rise in the first year following market opening ▪ The issues seen in energy and telecoms have not materialised ▪ Complaints are primarily about the service they are receiving, not about the market ▪ The performance of three retailers is ‘skewing’ the picture But… ▪ These poor performing retailers account for over half of total market share

▪ c.60% of market share, c.80% of complaints

Our assessment…

▪ So far so good!

▪ …. but more effort and focus is needed:

▪ To increase SME awareness of the market ▪ To make the market work for SMEs ▪ To provide accessible, useful information and advice for all NHH consumers ▪ To enable and encourage NHH consumers to re-negotiate and / or switch ▪ By retailers to improve their service offering and customer satisfaction ▪ By retailers to reduce the level of complaints

Visit us at www.ccwater.org.uk Follow us @WaterWatchdog Contact me: phil.marshall@ccwater.org.uk