Utility Week

Interview UTILITY WEEK | 13TH - 19TH JULY 2018 | 9 W ho better than the people with expertise in the water sector to establish the largest competitive water retail market in the world? They seemed the obvious choice in the run-up to the 1 April 2017 dead- line for the opening of the English market. And with the benefit of hindsight? Well, perhaps people with more commercial experience would have made more sense. "The market is now learning the commercial ele- ment," says Richard Stanbrook, director of water retailer Pennon Water Services (PWS), when Utility Week meets him on a gloriously sunny day at the company's head- quarters in Bournemouth. As a water industry man of more than 20 years, Stan- brook has gone through a steep learning curve in the art of competing for customers in a sector that until a year ago had an entirely captive audience. But having "learnt from the bottom up", the "thrill of the contract acquisition" is something he hadn't experi- enced for a long time. "Going aer new business is the really enjoyable bit," he says. "With the thrill also comes the disappointment of the loss, when you see someone else get it and you question, 'what have we done wrong?'. "You can't win them all and that's great. It's a differ- ent dynamic." But more of that later. Our conversation naturally turns to the weather. We had scheduled a meeting a couple of months prior, but the Beast from the East put paid to that. Just as the snow began to melt in the capital, the seaside town was cov- ered in a thick blanket of it and we were forced to make another date in the diary. Water companies are all too aware of the havoc the freeze followed by the rapid thaw caused across the country. Ofwat's Out in the Cold report points out the abysmal management of the situation by some compa- nies as customers were le without a water supply for hours or even days. The document also highlights that poor communica- tion between wholesalers and retailers in the business market meant some customers were confused about whom they should talk to. "Wholesalers oen failed to give retailers up-to-date information – or did not contact retailers at all," Ofwat's investigation reveals. Although Stanbrook was speaking ahead of the publication, he believes communication has mark- edly improved since the market opened to competition, describing the extreme weather as a prime example of PWS having to "deal with every single wholesaler". "Working with wholesalers is going pretty well. It's certainly improving from day one, when wholesalers and retailers didn't really know how to interact – we hadn't practised. "Water companies have spent a long time under- standing service and ingrained in there is the attitude that they want to supply a great service to customers. Both parties are learning how to do that with the retailer/ wholesaler divide. But I'm certainly seeing a willingness from both to improve everything they do, and I've seen that improvement over the past 12 months." So, what's to come? "I think you're going to see consolidation of the market. Castle Water is already extremely active [the company recently acquired Invicta Water, which trades as Water Choice in the non-domestic market]. You're going to see more new entrants, which is really exciting. I think you're going to see retailers release some of their innovation; we've spent a year just getting the market working. Retailers will reach out to customers through different channels, which we are going to be at the forefront of. I think you're going to see more products and offerings in that sense." Returning to the move into the competitive market, Stanbrook is clearly proud of PWS' achievements in the first year of its operation: the company won several high-profile contracts with the likes of Rolls-Royce, Unite Students, Shearings, Kerry Foods and BMI Healthcare. He attributes the company's success partly to having a good mix of people. "We have people who have water experience who can disperse that knowledge, and then you've got a good commercial section who can educate us old water boys and girls on the real world." But Stanbrook isn't afraid to admit that PWS has lost customers. "Sixty-five per cent of our losses are national chains. There will also be customers who have not nec- essarily been enticed away, but have chosen to leave because of something we haven't done quite right. "We have to put our hands up to that and that's when it comes down to the feedback we have to learn from. While you may lose that customer, the key is switching them well because you don't want to leave a bitter taste. Let them move quickly and smoothly because they may come back. Learn what might have gone wrong and what other services weren't quite right, and improve them so it doesn't happen for other customers. "But I am pleased we are in a net positive position and we're projecting to be in an even more net positive position in the next few weeks." Might PWS look to follow in Castle Water's footsteps and buy other retailers? "We're part of an ambitious group," he says, "so yes." But he won't be drawn further: "There's nothing else

• Cover