Utilities
From April 2017 consumers & businesses in the UK are able to choose not only their electricity or gas provider, but also their water retailer. But this is not the first change made in this direction. Scottish non-residential clients have been able to choose their water provider since 2008. What has changed in Scotland since then?
130,000 businesses were affected by the changes. Scottish Water remained the sole Scottish wholesaler with complete control of water infrastructure.
New licensed providers now buy water services from SW to resell. After the first 5 years, the program yielded +35 million pounds of energy savings.
Customer satisfaction with their water provider increased by 26%.
Consumers can expect a similar market environment in England.
A big challenge lies ahead for the 20 utilities handling water distribution.
One unchanging aspect to keep in mind is that the water regulator will still determine the prices private water companies can charge customers, based on a rather complex formula.
If utilities fail to innovate they will be vulnerable to tech giants with stronger customer relationships such as Google, Apple, Apple who already offer smart home domotic kits.
The industry is waking up to the costs of poor public image, and needs better communication, service and innovation to succeed.
In many places, still, customer’s interactions with their utilities supplier remains ‘analogue’, bill arrives, customer pays and only engages if there is a service issue. This model is clearly out of date.
The pressure to decarbonize and meet environmental targets can be overcome with new technologies. We can help customers to take informed action, where there’s a potential to save water and improve the relationship utility service provider/customer.
Rather than a race to the bottom on price in a highly commoditized market, this gives companies the chance to differentiate their offers, using digital technology to create platforms that enable them to engage with customers on a wide range of issues, from energy efficiency to EV charging and smart home kits. It’s an opportunity to reinvent what it means to be a utility company, with the potential to rebuild trust and reputation along with margins.
Technology will be the key to unlocking this potential. The good news is that technologies now exist to help companies transform their operations at a speed that was once unimaginable and at a fraction of the cost of previous projects.
Yet this window of opportunity will not last forever: these findings suggest there’s a 5 year window before digital disruption transforms this industry and the winners will be those that move first.
Companies that get this right will get results: according to PwC, customers are willing to pay up to a 16% price premium on products & services in return for great experiences and 63% are willing to share more personal data with a company that offers a great experience.
Get it wrong, however, and one-in-three customers will walk away from a brand they love just after one bad experience. Three out of four agreed that the utilities industry does not adequately measure the experiences of its customers and is not doing enough to improve customer engagement.
With utilities companies under huge pressure to help decarbonise the economy, now is the time to fully embrace the digital revolution to deliver the promise of a greener, more sustainable future for everyone.
93% agree that data will be the key to unlocking efficiency savings, indeed, early adopters are already generating significant savings. Such is the scale and urgency of the challenge. The future is now and we can help on this transition.