Case study
Thornton Facilities Management saved over £320,000 on a five year water renewal
Thornton weren’t unhappy with their supplier. They wanted proof the renewal rate was competitive before committing to five years, and they didn’t want their billing setup touched. The benchmark delivered both.
Thornton at a glance
Thornton wanted proof that a five year renewal rate was competitive before signing it. We benchmarked the offer against the market, negotiated a sharper long term rate and kept their billing setup exactly as it was. The forecast saving is over £320,000 across the term.
Client overview
Thornton Facilities Management manages water across a portfolio of client sites in the UK. With that many supplies under one roof, water is a seven figure line on the accounts rather than a rounding error. A five year renewal was on the table with their existing supplier, and the procurement team wanted to know the rate on offer was competitive before they signed it.
They came to us with a brief that had two parts. Show us where the market is. And don’t recommend anything that means our operations team has to rebuild a process.
The challenge
The relationship worked, but nobody had tested the rate. Thornton were satisfied with the service their supplier provided. That’s exactly the situation where renewals quietly cost money, because the easiest thing in the world is to sign the paper that’s already on the desk.
The billing setup couldn’t change. Thornton’s operations team had configured everything around the existing supplier. Invoice format, cost centre coding, portal access, payment terms. A saving on paper that costs three months of internal work to absorb isn’t really a saving.
Five years is a long time to be wrong. Committing £7m of spend to an untested rate would have locked in any gap between the offer and the market for the full term.
How we approached it
A market review doesn’t require any appetite to switch. It requires a willingness to check. An incumbent who knows a benchmark is happening tends to sharpen their offer.
We also treated the billing constraint as a filter rather than an obstacle. Any retailer who couldn’t replicate Thornton’s existing invoice format and portal setup simply didn’t make the shortlist, whatever their rate looked like.
What we did, step by step
Benchmarked the renewal rate Thornton had been offered against the retailers who are most competitive on multi site facilities management accounts at that volume.
Negotiated a long term, locked in rate. Five year commitments give retailers volume certainty, and we pushed on that certainty to get a sharper unit rate back than a one year deal would have produced.
Filtered the shortlist for billing compatibility. Every retailer we put in front of Thornton had already been checked against the existing invoice format, cost centre coding and portal access. The procurement team picked on price, not on whether their colleagues inherited a project.
What changed
Over £320,000 in forecast savings. Across the five years, the agreed rate is forecast to save Thornton over £320,000 against where a straight renewal with the incumbent would have left them.
£7m of contract spend on a tested rate. Every supply across every site Thornton manages now sits on a rate that’s been checked against the market rather than assumed competitive.
No change to the billing setup. Invoice format, cost centre tagging and portal access all stayed the same. The procurement team got the saving without their colleagues inheriting any work.
“We weren’t unhappy with our current provider, but we wanted to be sure we were getting a competitive deal. The team helped us secure a great long-term rate without changing our billing process — and delivered significant savings in the process.”
Procurement Representative, Thornton Facilities Management
Key insight
A renewal offer is a starting position, not a market rate. Suppliers price renewals against the likelihood you’ll sign without checking. The moment a benchmark exists, that pricing logic changes.
The other lesson is that operational constraints belong in the tender, not after it. Thornton told us up front that billing couldn’t change, so the shortlist was built around that from day one. Nobody had to trade the saving against an internal rebuild, because the option was never on the table.
Does this look like your business?
If you manage utilities across multiple sites, have a renewal landing in the next twelve months, or you’re about to commit to a long term rate that nobody has tested, the same review applies. We’d start by benchmarking what you’re paying now against what the market would offer for your volume. Thirty minutes with a recent invoice is usually enough to tell whether it’s worth going further.
Industry terms used on this page
- Benchmarking
- Testing the rate you’ve been offered against what other retailers would price for the same volume and sites. It’s how you turn “the relationship works” into “and the rate is competitive”.
- Incumbent supplier
- The supplier you’re already with. Incumbents often win renewals by default, which is why their first renewal offer isn’t always their best one.
- Unit rate
- The price paid per unit of water used. Longer commitments usually buy a lower unit rate because the retailer gets volume certainty in return.
- Cost centre coding
- The tags on an invoice that tell a finance system which site or budget each charge belongs to. For multi site businesses, losing this in a switch creates real internal work.
- Consolidated billing
- Multiple sites or supplies invoiced together in one format, on one cycle, through one portal. Often the thing operations teams care about most in any change of supplier.
Common questions
Why review the market if you’re happy with your supplier?
Because a renewal is still a commitment. Without a market test you’re trusting that the offered rate is competitive rather than knowing it is. Incumbents tend to improve their offer once they know a benchmark is running.
Did Thornton have to switch retailers to get the saving?
Not necessarily. The point of a market review is leverage and evidence. The saving can come from moving to a new retailer or from a renegotiated deal with the existing one. Either way the business ends up on a rate that’s been tested.
How does a longer contract produce a better unit rate?
Retailers price uncertainty into short contracts. A one year deal forces them to assume they’ll have to win the account back next year. A five year commitment removes that risk, and a portion of what it’s worth to them lands in your unit rate.
What does keeping the billing setup mean in practice?
For a facilities management business it usually covers invoice format, cost centre tagging, portal access, payment terms and how invoices are consolidated across sites. We filter the shortlist to retailers who can replicate all of it, so the saving doesn’t arrive with a project attached.
Could a similar review work for our portfolio?
If you’re approaching renewal, manage water across multiple sites, or are about to commit to a long term rate, a market review is usually worth running. We’d start by benchmarking what you currently pay against what the market would offer for your volume.
Renewing a water contract soon?
Send us the renewal offer. We’ll benchmark it against the market and tell you whether it stands up.