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Staying ahead of the curve – insights unlock value in the new Water Retail Market

The new water retail market is open for business; on the 1 April this year it became possible for businesses in England to choose which company they would like to supply their retail water services.

The move had been in the pipeline since 2011, when the government set plans for a new competitive market outlined in the Water for Life White Paper. With a focus on improving customer service, promoting protection of the environment and increasing competition in the industry, it is one of the most significant changes the industry has faced, bringing with it a range of new challenges.

The open retail water market will work much in the same way as other utility services, with wider utility markets now also being able to offer water services.  It is believed this will deliver around £200 million of overall benefit to customers and the UK economy by separating out retail services from wholesale activities.

What does this mean?

In simple terms it means that for an additional 1.2 million eligible businesses and non household customers they now have a choice – the customers are in the driving seat.

Customers can decide who they would like to provide their water, their wastewater services, or both. They can change at any time, for any reason, without penalty, and all this can happen in less than a month.

For licensed water retailers it means they are now competing against each other and have the freedom to tailor services and packages for customers to contend in the open market. The market will provide growth opportunities for existing regional water companies, and brand new companies. Initial investment will be required to set up independent retail businesses, ensuring fair competition, and once established driving a return on investment will be a key focus.

Insights will unlock value

The open retail market is a new market; with that comes limited transactional history or operational trading knowledge. There are no clear market leaders and the market is open to competition.

The good news is willingly engaging with and understanding customers’ and stakeholders’ needs and concerns could be a key differentiator in a new competitive market and will provide those forward thinking water retail companies with a competitive edge.

Staying ahead of the curve

The ability to benchmark, track and evaluate service through customer engagement will deliver a significant return on investment for water retailers.

For over two decades, our team at Explain Market Research have been innovating, developing and delivering research programmes in the utility sector, our main objective always being to deliver actionable insights for our clients. Read our case studies for some great examples of our work in the sector.

We have developed innovative methodologies to deliver insights in a competitive market. We specialise in engaging with customers including embedding behavioural research, trust and confidence, and the engagement of vulnerable and hard to reach customers into our utility sector research projects.

Research and engagement will enable water retail businesses to get closer to their customers to identify the issues they are experiencing at any given time and co-creating to find solutions that improve their experience.

Research will also be important to understand the ideal balance between price and service to enable retailers to shape their service offering. Measuring and tracking customer experience as well as customer advocacy will allow retailers to measure performance as well as areas for service improvement, enabling continuous improvement over time and high levels of customer retention for getting it right.

Contact us at Explain Market Research today to find out more about the solutions we offer. Take a look at our accompanying infographic below.

Water Retail Market Infographic V3

 


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Growth stars in the region

The Sunday Times released their ‘Fast Track 100’ private companies yesterday and the most surprising aspect was that the list included so few digital businesses. Most of the companies with the biggest sales increases over the last 12 months came from more traditional sectors such as consumer goods, food and drink, leisure and business services.

The North East and Yorkshire fared well among the regions with 13 companies in the list, beating the North West (10) and the Midlands (10) and with a huge sales increase of 126%, Cawingredients, based in Leeming Bar, were the Region’s Growth Star in 13th position.

Andrew Cawthray set up Cawingredients in 2010 after having sold his previous soft drinks business, Macaw Soft drinks for £75m in 2005, which just goes to show how successful his business model is and on top of the current £44m turnover they are in the middle of huge expansion with bigger warehouse facilities, more bottling lines and another 100 jobs.

They supply Aldi UK and count several of the UK’s leading brands as their customers and Richard Harrison, their Chief Operating Officer has done a brilliant job of growing the client base along completely different lines to those of last business. Aldi in particular has seen a big increase in market share over the last two years.

Earthmill, Pure Gym and Xercise4less were at 17th, 18th and 21st in the list. Although based outside the Region, The Alchemist, part of The New World Trading Company was at number 20 and their latest outlet, The Botanist is due to open in Monument Mall next week after a £2m development and fitting out. Having had a sneak preview I can confirm it is the most exciting brand and bar/restaurant I have ever seen.


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The fair exchange

The utopian concept of a seamless collaboration between creators and consumers is considered by many companies to be beyond their reach.

This is largely because the process of gaining the credible insights that are needed in order to develop the strongest iteration of a product or service is daunting. However, recent studies have revealed that consumers are more willing than ever to collaborate with a brand and, crucially, they’re in a better position to do so than ever before.

Research company Insites Consulting recently published data to demonstrate the status of the social media landscape. In it, they conclude “80-90% of consumers want to be involved in co-creation”. The only thing they ask in return is to be told how their feedback has been used.

In our view, the purpose of market research is to create the ‘actionable insights’ that are derived from gathering useful information and spending time, effort and money discerning what customers want.
However, despite the best intentions of business owners, there has long been an invisible barrier between ‘seller’ and ‘purchaser’ making it difficult to retrieve reliable results. Finding the right people, asking the right questions and motivating those involved have typically stood in the way.

Today, it is so much easier for consumers to communicate directly with brands. Indeed, according to the Insites report “1.5 billion people use social media sites… 51% of Internet users have a smartphone and most have data stored on it”. Given all this, it seems that there is a huge opportunity for organic interactions between creators and consumers. All we need to do is identify how these conversations can be facilitated and translated into more collaborative relationships, for example through online communities.

Online communities present the perfect platform for co-creation by providing a private online space through which a company can constantly engage in real-time monitoring of brand opinions and perceptions. The technology also allows a two-way conversation between customer and brand to become a vital component for ensuring all products and services are shaped around the consumers’ needs.
The saying goes that the ‘customer is always right’ but now they are always right there.

Your customers want more from you and their ability to tell you that is right at their fingertips. They want better products and services and they’re ready to tell you just what that means to them.

Or at least, you should hope they are, because they might hold the key to your future success.
For the full report, please click here.