Choosing water suppliers – when is a service not a service?

Tuesday, April 1st, 2008

Talking of service design, the news this morning carried a story saying that businesses in the UK are now able to choose their water suppliers.

The presenter on the radio asked the question that crossed my mind: if it’s the same pipe, and the same water as before, how can you change ‘suppliers’.
The answer was that you’re not paying for product, you’re paying for the service.

I had a bit of trouble understanding this. In fact I’ve been wondering about this ever since you could change gas and electricity suppliers. My gas comes down the same pipe as my next door neighbour’s gas. But he’s with British Gas and I’m with E.On. Same with the electricity.

My tiny little brain assumes that when I use a kiloWatt of electricity, my supplier puts a kiloWatt into a big vat of energy, and when my neighbour uses two kiloWatts, his supplier puts that amount in the vat. I may get some of the energy his supplier has put in, but I pay my supplier not his.

What the guy this morning was saying is what we’re really paying for is not the stuff in the vat, it’s the service that goes with it. In the case of water this would be cleaning the water (a national standard meaning cheaper doesn’t mean worse quality but better efficiency), fixing the pipe outside my home if it bursts, and sending me a bill. If they can do these things as well as (or better than) the competitors for a lower price, I win. If not, I change ‘supplier’.

I think I’m beginning to work this out. The problem is, why do we call them ‘suppliers’ at all? There must be a better name because at the moment if my water turns brown my ‘supplier’ can easily claim it’s nothing to do with them, because it’s my neighbour’s pipe that’s broken, and they don’t ‘supply’ him. ‘Service provider’ is a slightly better term.

This has other ramifications. Last night I rang BA to change the booking from my cancelled flight to the one before. I was told I had to go through the travel agent I’d booked with as until I started my journey, my contract was with them, not BA. This is despite the fact that a) I bought a seat on a BA plane, b) BA cancelled the flight, c) I only found out it was cancelled by good fortune, d) the travel agent was shut and e) it made no sense whatsoever.

What was the service here? And who was the ‘supplier’?
According to BA the service is the booking, and the supplier is the agent.
But to me, the service is a flight, and the supplier is BA.


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