Understanding the impact of the cost of living in the water sector

The current impact of the cost of living crisis is being felt across the country. Being able to understand how these impacts are being felt across different customers groups and forecast future changes is imperative to creating a proactive customer support strategy. At CACI we have been researching and collating consumer insights and data on the cost of living to help you support your customers.

Some of the key insights we’ve seen from the research so far include:

• Lower and middle affluent family groups are feeling the pressure the most
• More than 2/3 of consumers have already started to change their behaviour by reducing their discretionary spend
• Younger generations are more likely to turn to overdrafts and Buy Now Pay Later schemes to protect their social outgoings
• Rising cost of energy bills has impacted all demographic groups, prompting high levels of concern ahead of the winter months
• Economic uncertainty means 75% of consumers are worried about their own, their families, or other people’s finances

What does this mean for the water sector?

The water sector sits in a unique position with defined customer service areas that have a wide range of demographics, and a historically unengaged customer base resulting in a low awareness of support available for vulnerable customers.

CACI recently ran a roundtable to share key insights and discuss how the impact of the cost of living is being felt in the sector, and how water companies are looking to prepare for future forecasted impacts. The key outcomes from the session were:

Innovative partnerships provide new avenues – partnering with councils and landlords to identify and understand the set up for affordable housing allows support to be better directed to those that need it most.

Contact centres provide the first indication of change – whilst payment rates and direct debits currently remain strong after the summer months, the first sign of concern being seen is the increase in contact centre calls for help and support.

Clarity between water efficiency messaging and cost of living is needed – being able to identify the difference between a change in water use for environmental reasons vs to cap bills is key to ensuring the right messaging reaches the right customers.

Engaging the unengaged – is still a priority, in particular identifying those that qualify for social tariffs or support that aren’t currently using them.

Making insights actionable

Having the right data and customer understanding in place is key to enabling proactive communications, and to ensure the right support can be provided to customers. CACI’s data science team has created tools such as web-based water poverty tools, bespoke vulnerability indicators and forecasting tools to help you build proactive strategy with data driven insight.

As we continue to monitor the changing situation, sign up to our Cost of Living Podcast to get monthly updates.

Find out the full spectrum of work CACI does in the water sector from our Water Brochure.

For more detail on how CACI can support through enabling actionable insights, contact us here.