Developing initiatives to improve financial stability
A British Waterways case study

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Page 3: Responding to customer demands

British Waterways 4 Image 2Historically, money had been the root cause of many problems in nationalised public corporations like British Waterways. Although millions of people were enjoying using the canals and waterways, it was difficult to respond to consumer needs and make many improvements to the waterways. British Waterways only earned about 30% of the money needed to maintain the waterways and it was, therefore, heavily dependent on the Government grant for the rest. This meant that the Government not only dictated the amount of money British Waterways had but also how the money was spent.

By earning revenue from other sources, British Waterways is able to have greater influence over its use and in doing so, can become more customer focused - spending money in order to meet customer needs and requirements. Funding from other sources has therefore helped British Waterways to become market-orientated. British Waterways’ users and customers include:

  • boaters - private and hire boaters
  • anglers
  • cyclists
  • walkers
  • unpowered craft - canoeists and sailors
  • organised groups
  • property tenants.

Not all of British Waterways’ customers pay directly to use the waterways. Walkers, for example, make their contribution through taxation. Customers also include people who purchase water from British Waterways, such as farmers, who use water for irrigation, or organisations such as Wessex Water and Thames Water. Ford and British Steel use the water for cooling and Pilkingtons uses water for industrial processes involved in making glass.

Becoming market-orientated was particularly important for British Waterways. It meant that in order to meet its objectives, British Waterways would have to listen to its customers and then respond to their needs and requirements. According to the Chartered Institute of Marketing ‘Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements at a profit.’ To achieve this, British Waterways has identified two broadly-based marketing objectives:

  • generation of significant additional income from leisure uses of the waterways and property reinvestment
  • re-positioning of British Waterways to achieve public recognition that the organisation is:
  • a provider of high quality, clearly branded products and services related to waterways
  • an organisation worthy of public support
  • a caring, responsible and effective custodian of the waterway heritage.

In order to meet these objectives, British Waterways re-positioned itself, becoming more businesslike and customer-focused. Re-positioning has helped British Waterways recognise that it exists in a competitive world with key opportunities in the fields of leisure and tourism and property development. It is realigning its activities to meet the needs of customers in these markets. Outlined below are some of the market focused revenue generating activities carried out by British Waterways.

Fibreway

British Waterways 4 Image 4Canals provide geographical coverage through many centres of population. Running alongside the canals are towpaths. Towpaths are not subject to the same disruption problems which occur on public highways – this represented an opportunity which British Waterways recognised.

As a result, British Waterways has expanded into telecommunications. The formation of Fibreway is due to a collaboration between GPT, Britain’s largest telecommunications manufacturer, and British Waterways, converting the Industrial Revolution’s transport highway into a vehicle for the 21st century’s information revolution.

The agreement provides Fibreway with the rights of passage over land. It involves the installation of optical fibre cables, mainly along the towpaths of Britain’s canal network, and leases access to these cables to telecommunications network operators and Internet service providers, over which they can transmit their signals. The route links London and the South-East with Birmingham, Nottingham, Sheffield, Leeds, Manchester, Gloucester and Bristol. Routes linking London, Birmingham, Leeds and Manchester and Glasgow to Edinburgh, plus connections around London and the Basingstoke corridor have already gone live. This project has considerable benefits for British Waterways as the extra income, generated through this public private partnership, is all invested by British Waterways in the canal infrastructure.

British Waterways | Developing initiatives to improve financial stability
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