Sue Amies-King does not have her own office – an unusual trait for the chief executive of a sizeable utility company. Instead, she sits alongside her personal assistant on the same desk as her comms team. As she shows Utility Week into the newly built offices of Water Plus in Stoke-on-Trent, she is greeted by two fresh-faced account managers, who address her more like a friend than a boss.
“There are a lot of hugely positive people who have chosen to work here, all of them really excited about being in water, many of them in water for the first time so they’re particularly keen to do a good job. It gives me a real buzz because I feel really proud of what we’ve done,” she says, beaming.
Water Plus, like its offices, is new. In March, two of the UK’s largest water companies, United Utilities (UU) and Severn Trent, announced they would join forces and combine their non-household customers to create an entirely new and separate business – the largest in the market.
Amies-King, then business retail director at UU, was chosen to lead the new joint venture, completing the “trilogy” of utility market deregulations she has been involved with. “I was an account manager when the electricity market opened up, and when it extended into the smaller businesses, I’d risen through to be head of retail. I was right at the beginning of that market, right at the beginning of the gas market, and now right at the beginning of the water market.”
Water was not a sector Amies-King had envisaged joining when she left insurance firm Aviva. After ten years in insurance, a move into banking seemed like the obvious next step. But when she was approached by UU about a job in water, and met with chief executive Steve Mogford, she was hooked. “He is a very engaging, forward-thinking guy. I decided water was exciting and I thought Steve was a great person to work for. Although I didn’t know much about UU at that stage, I was sold.”
In June 2012, when she joined the large, Warrington-based water company, market opening seemed like a world away, but it is creeping up quickly. “It has been anything but quiet, it has been really busy and interesting,” says Amies-King. “And now here we are with full competition almost upon us. I want to get on with it now, I’m excited about it. It feels like it’s been a long time coming.”
One of the main drivers for the UU/Severn Trent tie-up was the small margins available in water, which has come up as a concern for many in Amies-King’s position. Although she wasn’t involved in the early transaction, she says the two companies, probably individually, concluded that having scale and aligned ambitions meant it would be a good opportunity to come together. “UU and Severn Trent both have very forward-thinking boards, particularly the two chief executives, and they both saw the joint venture as an opportunity to create something new, fresh and different, and that’s what we’re setting out to do.”
The question of ‘who approached who’ is one that Amies-King has been asked many times. She laughs: “Some people say it was Steve who made the first approach, but I’m not entirely sure.”
Amies-King’s task as the newly appointed chief executive is certainly not a small one. Her mandate was “go and set something up that is successful in the market for customers”. She believes that, in terms of level playing field, Water Plus ticks all the boxes – it’s a separate, new brand, with new people, systems and processes, it ticks all the compliance boxes, but also she is hoping that it ticks all the boxes for customers by delivering based on what they need.
How is the process of setting up Water Plus going? “A lot of the basics are in flight, and quite a few have landed,” says Amies-King. “We’ve still got some customers to upload in the next month or so, and then that will largely be complete.”
Water Plus’s senior leadership team is drawn from both parent companies, and all have bags of experience of other competitive markets, Amies-King says. Meanwhile, a proportion of other people across sales and marketing opted to transfer with the JV. The rest have been recruited by Water Plus from the local area. “While people don’t particularly have experience in water, they have lots of experience in retail and energy and financial services, so they know what is needed to look after customers.”
The office has a distinctly laid-back air, with bean bags and plush armchairs – all in the company colours – abundant in the leisure areas. But that is not to say Water Plus employees don’t work hard. Amies-King is someone who likes to win, and she makes sure high standards are maintained. “If I see a customer complaint and I feel like we’ve had chances to resolve it and we haven’t done it, that disappoints me and I feel it personally.”
With at least 30 suppliers looking set to be in the market at opening, and many more likely to follow, how will Water Plus differentiate itself? “By our brand positioning,” Amies-King answers simply. “Our personable, fresh, different brand positioning will pervade through everything we do.”
People, too, are a big differentiator. Water Plus recruiters hand-picked all the people who now work for the company – and Amies-King says they all have the right attitude to service, and really want to deliver.
The firm’s immediate priority now is to operate in the shadow market effectively and make sure that it flushes out any issues with the market operator and its wholesalers. Amies-King says it is imperative that the process is as seamless for customers.
Amies-King has views on the types of customers the company will target when the market opens, but she is keen not to burn any bridges or commit to a certain ‘type’ of customer until she sees how the market unfolds. “We’ve got all the segments in our base of 400,000 customers. In particular, we’ve got many multi-site customers, and we have 25-35 per cent of their business already, so naturally we’ll want to try and acquire the rest.”
She points out that, in developing proposals to keep its existing customers, the company will have developed a compelling proposition to attract new customers. Water Plus is likely to refine its targeting when it sees how the market plays out and niche players emerge. “We’ll have a certain strategy to respond to that. We’ll have our own strategies about certain sectors and geographies, which we’ve got ideas about.”
When it comes to market rivals, she considers everyone a threat. “All companies have an opportunity to be disruptive; some of it will be deliberate and some of it will be unintentional.” Some, she says, will be inadvertently disruptive because of a lack of understanding around their costs, leading to disruptive pricing that is not sustainable in the long term. “I can see that causing some interesting challenges in the market.”
Amies-King, like many heads of market participants, is confident that the market will open on time in April next year, and is full of praise for how things are going so far. “Who would’ve thought 18 months ago that shadow would happen as effectively and seamlessly as it has? I think that’s a credit to the whole industry and to Ben Jeffs and his team. The whole sector has done itself proud. I think shadow is a great idea, and it was well thought through.”
When it comes to informing customers about the market, Amies-King warns that it is still early days. “If you tell customers too early, they are likely to forget.”
Large corporate businesses are already aware, so it is important that small and medium-sized enterprises, which make up around 90 per cent of the market, are informed. “There is lots of research that says these customers don’t know and don’t understand the market, and there is a case to educate them, but there’s a difference between education and marketing. Water companies will educate and market to customers, and Open Water will educate.”
She suggests direct communication is made just a few months before market opening, and then repeated. Water Plus itself was obliged to do a series of customer communications as part of its Competition and Markets Authority approval. It has so far sent out a mailer talking about the JV and competition, and will be stepping up its communication closer to market opening. “We’ve got a tactic – we want to proactively engage with customers, not ignore them.”
For now, customers will continue to receive bills from UU and Severn Trent separately, but that will change once the market opens. “There will be a point where we’ll rebrand in-area customers to Water Plus. We won’t do it immediately because there’s no point telling them bits and pieces, we will wait until the whole system is together. We want to minimise disruption to customers until there is a reason to make changes, and we will group these changes together so that the process is as efficient as possible.”
When the market opens, Amies-King says there are differing views on the level of switching that will happen on day one – some people claim thousands will queue up to switch on the day, and others believe that customers will wait and see how the market is working before committing to switch.
“You could call it either way, it is impossible to say,” says Amies-King, but she assures Water Plus will be prepared for either scenario. “The best thing we can do is plan for high volumes so we’re ready. Then even if it doesn’t happen, we’ve still got scalable systems that are working.
“If in doubt, plan for the most challenging scenario and then at least you’re ready – that would be my advice, and that’s what we will be doing.”