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With Open Water for businesses already in place, companies are running out of time to prepare for the inevitable opening up of consumer water services, Quadient has warned.

Regardless of who is in political power, by 2022 open consumer markets will mean people across the UK will be able to access whatever services they want, from whoever they want. With water supplies themselves a pure commodity, the only way for organisations to differentiate themselves will be in the packages they put together and the customer experience they offer: failure to get either of these right will be a recipe for a mass exodus of customers.

“Water needs to learn from the lessons of other utilities,” said Mustafa Atik, Energy and Utilities expert at Quadient. “The Big 4 energy suppliers have seen their business drop, partly because they weren’t ready for the explosion of consumer power that opening the industry created: from customers demanding energy from renewable sources, to becoming more savvy about switching suppliers; to using services from new entrants such as IKEA. These are all likely to be repeated for Open Water.

The business roll-out has acted as a proving ground, the consumer implementation will need to operate at a much larger scale, with a far greater potential for confused, upset and volatile customers. Whether an established provider looking to fight off the competition, or a new entrant looking to make a name for themselves, companies will only thrive in the Open Water era if they treat the customer as king.”

Since it was introduced in April 2017, the Open Water initiative has allowed more than 1.2 million eligible customers in England to choose their water suppliers. This covers not only water supplies themselves, but services such as sewerage; metering and billing; auditing and benchmarking; and efficiency consultation. In its first year of operation, Ofwat reported that around 10 percent of eligible customers had switched, reporting total savings of around £8 million in lower bills, and 270 – 540 million litres of water through efficiency measures.

While opening up the market to consumers will be a more complex process, Quadient predicts that the consumer market will be in place by 2022. At this point, the UK’s 27.2 million households will demand access to new services, and competition will surge. By 2023, the UK will see the first reports of water suppliers failing in the new regime – unless they can take action to differentiate themselves against the competition. This might include using technology in new ways: for instance, using Virtual or Augmented Reality tools to show customers how the water system around their property works, and how best to save water and reduce bills.

“In any commoditised industry, customer experience is one of the last, true differentiators. The packages companies offer; the ease with which customers can switch, and the way in which companies communicate with them all make a big difference to that experience,” continued Atik.

“Savvy companies will be ensuring their customer experience is exemplary in the next few years; to ensure satisfied customers now and in the next decade. This doesn’t only mean being able to converse with customers, over the channels they use, when they need to communicate. It means taking advantage of technology – for instance, smart meters for water should become the norm, and integrated with other utilities. By doing this, companies can help ensure that they won’t be one of the first to fall.”