One year on from water deregulation in England, Kinect Energy Group’s commercial water director, Chris Quinn, expresses his concerns about the business community’s receptiveness to the changes.
The deregulation of the water market came into effect on 1 April 2017 allowing businesses to select their water supplier and compare packages, ultimately saving them money and helping them become more energy efficient.
However, despite there being a large effort to educate businesses about the benefits of the water deregulation, engagement and interest levels among customers have been low. We’ve found that water deregulation has fallen short of expectations, and retailers are not providing enough SME customers with the incentives required for them to switch.
Around 70% of the UK’s energy is purchased through a broker, so we are advising retailers to take the time to understand the role of a broker and the value that they add in order to make a success of the market.
It’s been an interesting first year of deregulation and the time seems to have flown by. After what felt like a sluggish start for quoting in the first three months, things really started to recover well at the back end of 2017.
We started to see multiple quotes coming through for customers’ businesses, and finally started to see them switching, which was a huge relief. But overall, I think the first year has been a challenging one in many respects, particularly when it comes to customer interest.
Businesses want cheaper prices, particularly those in the SME sector, but these customers generally don’t attribute much value to enhanced and value-added services that many retailers are trying to balance off the poor margin levels with. Therefore the industry has faced challenges when demonstrating to customers about why they should switch.
Don’t get me wrong, SME customers are switching, and we have brokered the deal for many SME customers who are now realising the benefits of cheaper prices. But, on the whole, I definitely think this is falling short of expectations and not providing enough SME customers with the incentives required for them to switch in their droves.
The market still has a long way to go before it can be claimed a success and, from a customer service perspective, we have seen the good, the bad and the downright ugly from retailers over the course of the last 12 months. It’s clear that many retailers have work to do, and lots of it, before they become the choice for customers.
For more information, please visit www.kinectenergy.com.