South East Water applied for a sewerage licence in August, which would allow its business retail arm – South East Water Choice – to offer sewerage services to its 55,000 business customers. The company has also applied for a water supply and sewerage licence, which would allow it to operate nationally. South East Water Choice managing director James Dubois talks to Utility Week about the company’s strategy, expectations of the market and how it will retain customers, and win new ones, in the new market.

Q: What made you want to join the water sector?

A: I spent 20 years in the energy industry back in the 1990s, so I’ve been through that deregulation cycle. This opportunity came up and I thought great, it’s a chance to get in at the beginning of a deregulation process again and take myself through the same cycle.

Also, the position appealed, it’s a more senior position than I’d been in before. It’s going to bring new opportunities, experiences and learnings. It’s quite a steep learning curve, but it’s exciting.

Q: What will you bring to the role?

A: One of the things that I will bring is my relationship with businesses. I’ve been speaking to businesses for 20 years, and I understand what they want.

As a water company, South East Water has had very little experience of speaking to customers. If we have it’s been in a reactive way, with the customer calling us because they have an issue. Businesses are busy, they don’t always think they want to speak to us in the first instance.

I don’t see this as a sales role, but an education role – creating awareness of the market, which we think is quite low.

Q: What is South East Water’s strategy for the non-household market?

A: Historically we were a water-only supplier. We’ve applied for, and been granted, a sewerage licence to offer sewerage service within our area. We do that under the traditional brand of South East Water, to which we’ve added ‘Choice’.

Looking after our existing customer base is the primary focus. But we do have some national ambitions, and those will start with servicing the national branches of our local customers.

We’re going through the process of an out-of-area application for a water supply and sewerage licence to allow us to operate nationally. We will use Invicta Water – a dormant company which doesn’t have any transactions on it – as a vehicle to operate out of area, trading as Water Choice South East.

We see at some stage, date unknown, transitioning all our customers into Water Choice South East.

Q: What is the company doing to raise awareness of switching among customers?

A: Most of our 55,000 – around 47,000 – are small and medium-sized enterprises. One of the first things I did when I became managing director was to write to all those customers informing them about competition, when it was coming, and what to expect. I’ve planned another two letters between now and market opening, keeping them about three months apart, inviting our customers to contact us if they have questions.

As soon as we send those letters out, the phones light up with customers enquiring. We put our team through a programme of training, so they can explain what to expect from the market.

Q: What specifically will you be doing to retain your existing customers, and win new customers?

A: The primary plan for retention is to offer the sewerage service to our existing water-only customers. That seems to be an obvious thing for us to do because it provides the convenience of the one single supplier, bill and payment. We will be looking to speak to as many of our existing customers as we possibly can, in addition to the letters I’ve sent out, and offer that sewerage service.

The second key to retention will be looking at what our competitors are offering. A big prompt for customers to switch will be if they receive poor service from their existing supplier, so we will make sure we offer the very best possible level of service.

Q: You currently share supply areas with Southern Water and Thames Water, would you consider Business Stream and Castle water particular competitors?

A: Absolutely they are competitors and they have experience that we don’t, having been in the Scottish market for some time.

Their customers have been forced to have a new supplier – so what’s going through these customers’ minds? They’re either thinking they’ve already moved once and they don’t want to move again. Or they don’t have a relationship with this new supplier Business Stream or Castle Water and, therefore, they might be more open to looking at an alternative.

We’ll only know when we start speaking to them.

Q: Have you heard anything about energy-water link-ups?

A: I’m surprised at how little I’ve heard. For the moment, water companies seem to be concentrating on what they know and do well, and energy companies are doing the same. I think that’s right, but I’ve no doubt it will come.

We thought about it for a very short period and went straight back to the thought of: no, let’s stick to what we know we can do well and only when we’re supplying water and sewerage services as efficiently as possible will we consider that again. There are no immediate plans.