Demand management is a powerful way for water utilities to address the challenges of population growth and climate change. Although active conservation efforts have been studied extensively, recent evidence suggests households respond to many external events beyond a utility's control, including political responses to extreme climatic episodes and corresponding mass media coverage. Despite their importance, these external factors are difficult to analyze in a controlled setting, and few tools exist to evaluate their influence on customers. Here, we present a consumption change detection (CCD) method that offers new insights into how climate‐related mass media and policy events affect conservation by pinpointing the timing and magnitude of customer‐level water use shifts. We use CCD to monitor and segment the responses of residential water customers to policy and media events in Costa Mesa, California, during the severe 2012–2016 drought. Our results show consumption reductions among 75% of customers. Of these, 80% reduced water use before mandatory restrictions were imposed, coincident with intensifying state policy responses and spikes in media coverage that affected all customer types during 2014. Analysis of standardized drought consumption trajectories indicates that 16% of conserving customers increased consumption in 2015–2016. Conservation and rebound were both more likely among affluent and educated customers, suggesting that CCD can identify engaged and informed water savers who make suitable targets for water‐efficient retrofit incentive schemes. This study demonstrates CCD's potential as a novel demand analysis tool in an interconnected world where external social, political, and climatic stressors can exert an important influence on customer behavior.