A new research study commissioned by Ofwat has highlighted ongoing problems in the business retail water market.

Opinion Research Services (ORS) conducted a quota-controlled telephone survey in 2021 on behalf of the water sector regulator aimed at gathering further insight from business customers about their experiences and views concerning the business retail water market.

According to ORS, the last three years has seen a drop in the level of overall customer satisfaction with current retailers - the result in 2021 (73%) is lower than those seen in 2020 (78%) and 2019 (80%). The level of dissatisfaction has also increased: 17% in 2021, compared with 6% in 2020 and 8% in 2019.

The detailed 95 page research study says:

“Large organisation customers, as well as those in the information and communication; mining, quarrying and utilities; and business administration and support sectors, were among the sub-groups significantly less likely to be satisfied with their clean water and waste water retailer.”

The most frequent reasons cited for customers’ dissatisfaction with their current clean water and waste water retailer services were:

• billing issues (65%)
• customer service (45%)
• metering issues (34%)

The survey also shows that fewer than half (43%) of eligible business customers were aware, prior to taking part in the survey, that since April 2017 either that:

• organisations have been able to change who supplies their clean water and their waste water retail services
• or potentially move to a better deal with their existing provider.

According to ORS, this reveals a significant decrease compared to previous years in which the survey has been undertaken: 58% of customers were aware in 2020 and 53% were aware in 2019. ORS suggests that one possible reason for the decline in awareness may be disruption and changes to working practices experienced by organisations as a result of the pandemic, which has “undoubtedly had a negative impact on participation rates in 2021.”

Commenting on market engagement, ORS has estimated that 8.5% of all customers have been “active” in the market in the last 12 months based on the survey results, with active defined as customers :

• who have switched or renegotiated in the last 12 months
• those currently in the process of switching/renegotiating
• those who are actively considering switching or renegotiating
• those who had tried to switch or renegotiate and failed
• those who had considered switching or renegotiating and decided not to
• Larger organisations are significantly more likely to be ‘active customers’ (27.5%)

When asked about what is most important to them as a customer, the research shows that the five most widely identified factors in 2020 were:

• around half (51%) mentioned a reliable water supply and/or no supply interruptions.
• around two fifths mentioned price (41%)
• around 26% mentioned customer service
• around 11% billing services
• around 11% water efficiency

Commenting on the scope of the research study, ORS said:

“It was originally envisaged that the survey would target 1,000 completed interviews; however, this was subsequently reduced to 700 due to the considerable difficulties experienced in engaging organisations. ORS estimates the participation rate may have been as little as half of what it had been, when we undertook the same survey in 2019.”

Underlying factors contributing to the change include:

• the Covid-19 pandemic, which resulted in more organisations (particularly in certain sectors) having closed or being unavailable at the point they were contacted (and therefore, being essentially uncontactable);
• a much greater shift towards home working meaning key decision makers could not always be reached;
• and trading pressures on companies meaning that for many, water issues and/or taking part in surveys are currently a lower priority than they would otherwise have been in previous years.

The report says:

“At the time of writing, it seems likely that the difficulties described above in relation to contacting businesses will (to a greater or less extent) remain an ongoing issue throughout 2022, and potentially well beyond this point, and consideration will need to be given to any future research with the sector.”

 Click here to download the report in full