Utility Week

UTILITY WEEK | 16TH - 22ND MARCH 2018 | 29 Customers Analysis B efore the opening of the water market on 1 April 2017, it was expected that energy brokers would enter the market in droves, seeking opportunities to add water to their existing energy offerings. Utility Week's sister title Water.Retail regularly speaks to retailer bosses to discover whether they consider these brokers a threat or an opportunity. Ahead of market opening, participants predicted that "hundreds, if not thousands" of energy brokers would seek to capitalise on the water market, with anecdotal evidence suggesting as many as two-thirds of transac- tions could be intermediated. Regulation concerns There were concerns about the lack of regu- lation of these brokers, and the fact that they were entering the market "unchecked". Grand Union Water managing director Peter Sceats insisted that, in the energy mar- ket, this has encouraged some of the most "dreadful" customer service he has ever seen. Now, 11 months on, Sceats says narrow margins in water have kept most, although not all, of energy's "flash Harry brigade" out of the market. What's more, Ofwat has pub- lished its approach to protecting customers through the introduction of a new voluntary code of conduct for third party intermediar- ies (TPIs). Working together The majority of water retailers consider bro- kers to be an opportunity and are "actively working" with these organisations in the open market. "Good brokers are good for the market," says Water Plus chief executive Sue Amies-King. Water Choice managing director Tanya Sephton, however, warns that there is a risk that retailers could lose the direct rela- tionship with their customer and a broker could add a layer of complexity for custom- ers. Meanwhile water2business managing director Charley Maher says the company "sees benefits in rewarding good TPIs and penalising rogue ones". Here's what retailers had to say about brokers in the water market in full. Threat or opportunity? Do water retailers have more to gain than to lose by working with brokers? There are concerns about a lack of regulation and the loss of a direct relationship with customers. Lois Vallely reports. Retailers on brokers Giuseppe Di Vita, managing director, SES Business Water Brokers are fundamental to our industry and they have a significant part to play in the development of a competi- tive water market. Working closely with brokers will assist us in our aim to help businesses access a better deal for their water. Charley Maher, managing director, water2business The use of TPIs are a key opportunity for customers to engage with the water market through a forum they already use for other services such as energy. Many new entrants use TPIs to gain customers, so a bad impression such as high pressure-selling techniques could impact on the competitive- ness of the new water market. We see benefits in rewarding good TPIs and penalising rogue ones. Ofwat has published their approach to protecting customers through the introduction of a new voluntary code of conduct for TPIs. Tanya Sephton, managing director, Water Choice and South East Water Choice Brokers provide an opportu- nity for us to learn from their experience of other markets with regards service offer- ing and sourcing the best deal for customers. They also offer choice for customers in terms of their route to market. However, there is a risk that retailers could lose the direct relationship with their customer and a broker could add a layer of complexity for customers. For some retailers their business model for growth may include brokers to gain customers. Each retailer will have its own strategy. Brokers provide an opportunity and we are happy to work with brokers who share our strong service-focused ethos. John Reynolds, chief executive, Castle Water We are happy to work with brokers, where customers choose to use a broker to assist them in their procure- ment. We put agreements in place which ask brokers to commit to following all the relevant codes of practice, and we don't work with brokers where we are unhappy with their standards. We have seen examples of both good and bad business practice from brokers. Sue Amies-King, chief executive, Water Plus We're already dealing with all of the major brokers in the market through our broker management team and we regularly work in partner- ship with them to identify opportunities for their customers to save money on water bills. Undoubtedly, they will continue to be part of the fabric of the new water market in England. Good brokers are good for the market. Richard Stanbrook, director, Source for Business Our approach is to interact positively with all brokers to help customers get the most from their water usage. It's important that brokers understand the market well to ensure their customers end up with the best overall solu- tion. This could be a straight retail saving or it could be a broader package of measures which might deliver a greater benefit. We are committed to helping brokers achieve the best outcome for businesses. The value brokers can offer will be one of the topics discussed at Future Retail #1 on 23 March in London. For more information: event.utilityweek.co.uk/futureretail

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