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Providers of municipal water supply services worldwide are facing pressure from climate change and increasing water demand due to growing populations and lifestyle changes. With finite global freshwater supplies, there is need for water service providers to consider water demand management as an option for closing the supply-demand gap. Several water utilities in the UK are implementing residential water efficiency initiatives, but to-date, the effectiveness of these programmes have not been comprehensively evaluated. The present study uses statistical analysis to evaluate the effectiveness of a domestic water efficiency programme, initiated by a major water supply company in South East England. Using multilevel regression, water consumption, weather and demographic data, the study analysed water savings achieved through the efficiency programme and defined the factors that affect a household's potential to save water. Analysis showed that households that participated in the programme reduced their per capita consumption by approximately 15%. Importantly, research findings provide strong evidence that single resident and financially stretched households have a bigger potential to conserve water than wealthier and larger households do. This study also highlights the robustness of multilevel analysis, even in cases of data limitations. The findings generate implications for policy and practice, which are useful for water companies involved in implementing water efficiency programmes, as well as their evaluation.