Embracing Ofwat’s Totex challenge will help water companies gain a competitive advantage, and win the trust and loyalty of consumers, according to a new report by TALIS UK.
The report, which examines the impact investment decisions may have on the future of the network under the Totex regime, found that if water companies focus on improving overall efficiencies in the UK water system, it would greatly improve their reputation with the public.
The study revealed that 82% of people in the UK would favour a water company that was making efforts to improve the quality of its service, such as reducing the amount of water lost through leaks.
It also found that two thirds (67%) of people agree that water companies could improve their reputation through price caps and reduced bills.
The report takes a look at the public’s perception of the water sector following the recent water market reforms, which will give non-household customers more say over who provides their water and wastewater services. It also explores what water companies need to do to retain and attract loyal customers, given that by 2020 household customers may also be able to choose their own supplier.
One of the key findings from the study was that if water companies embrace Totex and select items based not just on price, but also long-term benefits for the system, leakages could be reduced by around 20%. This would help to save approximately 227,249 mega litres of water every year, helping to position water companies in a more positive light with customers.
It also revealed that replacing any substandard valve with a higher quality valve that has double the life span would save the entire network £2.1 billion, savings that could then be passed on to the paying customer.
Mark Hodgens, managing director of TALIS UK, said:
“With the market set to be opened in April 2017 for business customers following the water market reforms, water companies are likely to come under increasing pressure to improve the efficiency and quality of their service in order to earn the trust and loyalty of customers.”
“As highlighted in our report, the cost of such services and perceived efforts to reduce the amount of water lost through leakages will have the greatest impact on whether customers will stay with their current supplier or switch to an alternative provider. It seems the UK public is conscious about protecting the future of this precious resource."
“With this all in mind, water companies need to review and improve their service offering to ensure they gain a competitive edge. By embracing Totex and considering the long-term impact of all decisions, companies will be protecting the future of the network and focusing on what really matters to customers.
Click here to read The True Cost of Substandard Valves