Mary Tiger is the Chief Operating Officer of the Environmental Finance Center at the University of North Carolina.
Water is the talk of the town these days – or at least that is what a series of marketing campaigns are hoping. Lately, it seems that almost every water industry association around has a marketing campaign for water.
The American Water Works Association’s message is that “Only Tap Water Delivers.” The Water Environment Federation says that “Water’s Worth It.” The National Association of Water Companies for the country’s investor-owned utilities has a series of messages to inspire appreciation of the industry. On top of these efforts, all these groups and more have recently convened to launch the “Value of Water Coalition” to stress how water is irreplaceable, shared, innovative, clean, and green. But it’s not just the water industry that wants you to drink water. Students at the University of California at Berkeley “heart tap water.” And even Michelle Obama wants you to “DrinkUp” (water, not scotch).
As 65 percent of the human body, water is essential to people. Depending on the temperature and activity level, humans can only live a little over a week without it. Moreover, the water industry – because of its costly infrastructure – operates as a natural monopoly. So why are so many organizations spending time and money marketing a good for which there are few, if any, viable substitutes?
One reason is environmental. In addition to UC Berkeley, a lot of organizations are touting tap water in an effort to break America’s bottled water habit and prevent the energy and waste associated with the industry. In many ways, this is also an economic campaign; bottled water can cost anywhere from 240- 10,000 times more per gallon than tap water, according to the Natural Resources Defense Council. (hence the phrase ‘viable substitutes’) And while the First Lady’s campaign doesn’t weigh in on the source (and in fact is heavily sponsored by bottled water companies), Michelle Obama wants Americans to choose water over soda for health purposes.
The water industry’s marketing motivations are more self-serving, but no less noble. There are a few ways in which marketing a monopoly could benefit the industry moving forward. An article published in Journal AWWA this month found that improved customer service and marketing by a utility in West Africa decreased its customers’ bill payment times and increased collection ratios (Donkor 2013). There is also the hope that if people actually compare the cost of tap water to the cost of bottled water, they might buy more tap water or think of other uses for it. (“Water is so cheap; I think I’ll wash my car today!”) But the primary objective of most of the efforts extends well-beyond cash flow or the hope of increased sales. The primary objective of the industry’s marketing efforts is to advocate understanding and foster support for each individual water utility in the country. The water industry, on the whole, is standing on the brink of serious capital investments that will require serious money. In 2011, the EPA projected a $384.2 billion national gap over the next twenty years to simply maintain existing infrastructure. In a 2012 report, the American Water Works Association projected a gap of $1,000,000,000,000 by 2035. Raising that money will require political capital and public support in thousands of individual communities across the country.
These new large-scale aggressive marketing campaigns want to move the industry beyond a silent service and drive good-will towards the funds that will need to be raised to support it. But still much of the conversation has to happen locally. Market globally; act locally. The Environmental Finance Center is partnering with Red Oak Consultants, an ARCADIS group, Raftelis Financial Consultants Inc., Stratus Consulting, ICMA, and water utilities from across the country in a Water Research Foundation project to identify successful communication strategies and specific messages that utilities use to gain support during their rate approval process. We’re interested to see the message balance between services, finances, and infrastructure. You can read more about this project at: http://www.waterrf.org/Pages/Projects.aspx?PID=4455.
— Envr. Finance Center (@EFCatUNC) October 8, 2013