When you are a business which makes half a billion in profit a year, surely continuity of supply shouldn’t really be an issue that risks serious damage to your brand reputation.
United Utilities, a business providing water to 2.5m customers in the North West of England (and which counts the English Lake District in its region) last week imposed a hosepipe ban and fines of up to £1000 on customers who are found continuing to use them.
The media and consumer rights groups have been vocal in their criticism of the company. There has been little significant investment in developing supply from the Lake District over a twenty-five year period, in infrastructure upkeep or in leak management.
They appear to be more interested in furthering their FTSE and global business aspirations and are more proud about the fact their business supports 25m people – thats 22.5m away from their core North West business.
As a United Utilities customer (no actual choice in that) it’s telling that the only communications I receive are either statements, letters to say my bill is increasing, or collateral designed to upsell other products like pipe maintenance and leak protection. I’m viewed solely as a revenue stream (pardon the pun).
United Utliities, like other major utility operators, has a contract of such colossal scale that it probably doesn’t have to worry too much about its reputation, as the barriers to entry for anyone hoping to succeed them are virtually unscalable. That it is a listed company at least provides some hope, but then again, as long customers can’t vote with their feet, will the share price be affected enough to drive change.
What can we take from this?
1/ If you’re not in a line of business where you’d benefit from privatisation and protectionism, you’d do well to find one.
2/ Be the best you can be within your core business before considering diversification or brand extension. Tesco didn’t risk their grocery business when moving into insurance, mobile phones, credit cards and banking.
3/ Communicate with, and keep customers happy. Lifetime customers who become advocates take a long time to create, but can be lost in seconds.