Two-fifths (40 per cent) of domestic customers would instantly review their water supplier if the domestic retail market opened, according to Echo Managed Services.
The software provider has warned water companies to look closely at their customer service strategies as they prepare their PR19 business plans.
The survey revealed that customer service frustrations would be a major driver for consumers switching supplier, with 17 per cent saying they would specifically switch water supplier because of poor service if they had the chance.
Echo Managed Services suggested one area where the domestic water market could struggle, if it opens, would be offering the levels of price incentive customers may expect. The report found that 44 per cent of consumers would only be enticed to switch if they could receive price savings of 20 per cent or greater.
The survey also found that almost 48 per cent of consumers would switch to a multi-utility provider covering gas, electricity and water, if this option saved them money.
Echo Managed Services head of sales and marketing, Chris Cullen said: “These findings illustrate that there are aspects of service that can be improved and as water companies begin to prepare their business plans for PR19, customer service strategies will be a key priority. Looking towards best-practice examples across multiple sectors could help companies to innovate and provide the kind of leading customer service that many consumers now expect.
“It may be a long time before the consumer water market opens to competition, if indeed it does, but with Ofwat placing more focus on customer service as part of PR19 we can expect to see customer service innovations in the sector and companies making this a real priority in the near future.”
The government first mooted the idea of domestic competition in 2015, when it proposed the market should open by 2020.
Since then, few updates have been given on the government’s thinking about the proposal, causing some commentators to speculate that the concept had been quietly dropped by the new administration.
The lack of a formal announcement from government has evoked a feeling of restlessness within the industry, with Ofwat chief executive Cathryn Ross calling for a swift decision on whether the government will proceed with plans.
Water minister Therese Coffey has insisted that the idea is “still on the government’s agenda”.
Research conducted by Economic Insight, on behalf of Southern Water, suggested savings could be as high as £150 per year per household, if water is bundled with energy and broadband.
However, Lord Rupert Redesdale – chief executive of The Water Retail Company – suggested in June that, following the outcome of the general election, domestic water competition is “dead in the water”.
Research conducted by Utility Week, in collaboration with Harris Interactive, found that more than half of UK consumers would like to see domestic water competition introduced.