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UTILITY WEEK | 18TH - 24TH SEPTEMBER 2015 | 27 Markets & Trading 1. Price saving Most customers polled by YouGov in July for Economics Insight said the most impor- tant factor in their decision to switch is the chance to save money. Within that, 29 per cent said a 5-10 per cent saving would be needed to entice them away from the incum- bent. This will be an issue, with the retail margin being set at 2.5 per cent, because it limits the ability of retailers to pass on sig- nificant reductions. For that range of sav- ings to be achieved, an extremely efficient business model will be needed, alongside an ability to identify where other, targeted efficiencies can be made. For other customers, such as Bernard Matthews, a per-unit saving on price is not essential, although procurement man- ager Stuart Read says "any change in price would be welcome". 2. Quality of account services (accu- rate bills, single bills, accurate meter readings) This is essentially "doing the basics right". Seven per cent of businesses say it is the main reason they are seeking to switch. Automated meter reading is one way to ensure accurate bills are dispatched to cus- tomers. Something else businesses, espe- cially multi-site customers, want is a single water bill, and this will involve the retailer being able to deal with a number of differ- ent wholesalers on behalf of customers. 3. Customer service This goes beyond correct billing and accu- rate meter readings and is something that 5 per cent of businesses in the YouGov poll rate as the most important factor influenc- ing their decision to switch. Thames Water aims to achieve this by having account managers – something many of the other retailers are also estab- lishing. These account managers will be the sole point of contact for the customer. Key to this, according to B&Q energy and water analyst Sue Haywood, is putting the right internal structure in place. "If they set up right, they will have that good relation- ship," she says. 4. Tailored tariffs A number of large customers, such as Tata Steel, currently have special agreements with water companies. Offering tailored deals to businesses, and certain types of businesses, will be important. Some smaller non-domestic companies may be happy to take off-the-shelf deals, because this will be easier and more convenient for them, but many will seek a deal designed specifically for them. Read asks: "Why shouldn't we have a tariff designed specifically for us?" 5. Individual water-saving advice Getting tailored water efficiency advice is the main reason to consider switching for 7 per cent of businesses. Bernard Matthews' Read says this is important for him as well, because at one of his sites he is constrained by the available supply of water: "I want them to come to the site, into the business and take a close look at what we do, and suggest where we could be saving water." General awareness of the imminent opening of the non-domestic water market is low. An Economic Insight poll of 2,000 businesses revealed in July that only 15 per cent know that from April 2017 they will be able to switch their water supplier. As the bar chart opposite shows, office- based industries such as accountancy and marketing are the least likely to know. Awareness among heavier water users (con- struction and medical services) is higher and they will be prime targets . One way of engaging these businesses is the creation of a procurement platform for the English market similar to that used in Scotland. This would enable businesses to fill in one form for quotes from multiple suppliers. The turkey farmer has an annual consumption of about 1,700Ml across its 50-plus farms and two main processing plants. Nineteen of these use more than 5Ml and are eligible to switch under the old regime. Bernard Matthews has already made the switch at one of its sites. Stuart Read, the company's procurement manager, says that 18 months ago he changed the supplier at his Holton site away from incumbent Anglian Water to Business Stream, the retail arm of Scottish Water. "There were push and pull factors," he told Utility Week. The push? Poor customer service. The pull? Business Stream helping the company develop a borehole as a new source of water. "This saves me £3,500 a day when it's up and running," he says. "It's worked out quite well." On top of this, Bernard Matthews does not have a mains sewerage service. All the wastewater is treated by the company's own wastewater treatment facility before being discharged. Read says he is looking for a reliable water supply, coupled with reliable and accurate billing. He adds that, on top of the basics, larger businesses will be looking to their water retailer to help them cut con- sumption. "We would like someone from the water company to come to our site and have a look at our processes and say where they could help us use less water, to look in detail at what we do." The next issue of Water Market Quarterly will address these milestones: l September: Central IT systems build set to start. l September: Ofwat to publish a package setting out its approach to customer protection, including in relation to mis-selling. l Late September: Final version of MAP3 to be published. l October: Ofwat is to publish charges scheme rules that will set the framework for customer tariffs. l 15 October 2015: Defra's consultation on dra exit regulations closes. l End of October: Ofwat expected to make recommendations to Defra on guaranteed service standards. l November: Ofwat to publish dra code for deemed contracts. Defra consults on cross-border regulations. Tactics: five things customers want Customer profile: Bernard Matthews Next issue