Brand Health Check: Thames Water

Rapped for its leakage record, the water supplier may find any hosepipe ban greeted with consumer scorn.

Thames Water may not be on many people's lips at the moment, but with an expected hosepipe ban in the capital seemingly just days away, that situation looks likely to change.

There is a fair chance that the public will find it hard to swallow Thames Water's justification for the ban.

While reservoirs are on reserve supply because of a shortfall in rain after one of the driest winters on record, a disgruntled public has been alerted to the company's poor performance on water conservation. Thames Water has just been reprimanded by water regulator Ofwat for failing to cut leaks, with nearly a third of water leaking out of its pipes before it reaches customers.

The company loses 915m litres a day, according to the regulator, enough to fill 366 Olympic-sized swimming pools. It had previously undertaken to reduce its leaks to a target of 905m litres a day.

Thames Water is trying to tackle the problem and is in the middle of a £500m investment programme to fix leaky pipes and overhaul its dated infrastructure. But this is a long, drawn-out process according to Mark Simister, the company's leakage strategy manager, who claims leakage levels are at their lowest levels since 2001.

Despite this, the threat of a hose-pipe ban on London and most of the South remains very real. During June, rainfall levels reached just 65% of the average for the month, so reservoirs are running low and the Environment Agency has warned the water industry to restrict water use 'sooner rather than later'.

Thames Water has taken pre-emptive action with the launch of a local radio advertising campaign asking customers to conserve water, but at the moment it is keeping quiet about its advertising plans in the event of a hosepipe ban.

The threat has generated significant press coverage, and Thames Water is now facing a battle with customers to prove both that the restriction is necessary and that water is running out.

So what can the company do to improve its image, and what marketing strategy should it employ during the drought?

We asked John Ingall, co-founder of Archibald Ingall Stretton, which has worked on Seeboard's advertising business, and Richard Longworth, planning director at Maher Bird Associates, which handles electricity giant EDF's advertising.

VITAL SIGNS Water company Daily leakage Actual leakage target (m ltr) (m ltr) Thames 905 915 United Utilities 470 500 Severn Trent 505 500 Yorkshire 300 295 Anglian 215 215 Southern 92 92 South West 84 83 Wessex 74 73 Source: Ofwat

DIAGNOSIS 1 - JOHN INGALL CO-FOUNDER, ARCHIBALD INGALL STRETTON

Utility companies are soft targets, particularly ones that enjoy a monopoly, but some just invite a whipping. Thames Water's warning of a hosepipe ban, allied to its description of recent rain as the 'wrong type' and news that it is losing 915m litres of water every day, does grate.

Thames boasts that in the past three years, 140 miles of pipes have been replaced; 140 out of a total of 20,000 miles does not sound like a triumph to me, but it is enough, clearly, to justify the 80% pay rises some of the company's directors took last year.

Thames Water's inability to communicate its efforts to tackle this Herculean task inevitably leads to cynicism, suspicion and resentment. Unless it gets its act together now, its future will be bleak once the industry is opened up to competition.

This is not the time for a cosmetic brand makeover or cuddly logo. This requires real action and a genuine demonstration of what it is doing.

Otherwise, in an open market, Thames Water will get what it deserves - a huge loss of customers.

REMEDY

- Focus on the fundamentals by being more aggressive about leakage reduction.

- Communicate these efforts honestly, frankly and regularly.

- Use all the communication tools available. Thameslink's programme relating to disruption around the Eurostar terminal, across text, email and direct mail, is a good model in this instance.

- Start behaving as if competition is already here, and give customers a reason to stay.

DIAGNOSIS 2 - RICHARD LONGWORTH PLANNING DIRECTOR, MAHER BIRD ASSOCIATES

Thames Water's threats to impose a hosepipe ban, while failing to meet targets to cut the amount of leaks it has in its network, is fast becoming a reputation disaster for the company.

The situation in which it finds itself reminds me of when I worked on BT Corporate Communications in the late-80s. It was the time of the 'payphone crisis', when almost a third of BT's payphones were not working at any one time. It soon became consistent front page news and a national scandal.

The problems were largely caused by vandalism or misuse, but the real issue for BT was that its reputation was on the line. Whatever else we sought to talk about in PR, advertising, even in focus groups, was met with the response 'Yes, but what about the payphones?' When your reputation is in question, you will not be listened to.

BT made fixing the payphones its over-riding strategic priority, then, when the problem had been solved, ran TV ads to that effect. The issue went away and reputation was restored.

REMEDY

- Bite the bullet and make leakage the top priority by increasing the money and manpower available to tackle it.

- Get ahead of the target and let everyone know when you are. Then, and only then, think about asking consumers to play a part in water conservation.

- In short, revisit the company's declared performance values: 'Meet our targets. Learn from our mistakes. Celebrate achievement. Act professionally.'

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