The Current Landscape for Energy Brokers / Consultants
Energy brokers have recently faced considerable scrutiny in the media. While some criticism highlights genuine issues, the narrative that all energy brokers behave poorly is not true and is normally unfair. The vast majority of energy brokers aim to enhance the industry and provide valuable assistance to their clients. Clearly, energy brokers are not charities and they need to make money in order to provide the service.
Energy Brokers were in the media for the wrong reasons again recently. This time, Watchdog highlighting ‘Do it for you’ renewals from one of the UK’s largest energy brokerages. This blog provides a balanced view as to whether highlighting this practise on TV was fair or not.
The Role of Energy Brokers
Without energy brokers, the process of switching energy providers for small businesses would be significantly more cumbersome. Many businesses may end up paying out-of-contract rates or simply remain with their current supplier due to the perceived complexities involved in switching supplier. The media should acknowledge the vital role that brokers play in facilitating smoother transitions and helping businesses secure better rates and recognise energy brokers as part of the solution to small business energy switching rather than part of the problem.
The media frequently highlights poor practises from energy brokers, such as hidden commissions and mis-selling. Clearly hiding commission and misselling is wrong, however the overcomplicated nature of B2B energy switching, resulting in human involvement at every step of the switching process has provided the opportunity for this poor practise to occur.
The focus of the media should shift to addressing the underlying issues in energy – In order to foster a more transparent and efficient market we should take a broader view of the problems. Focus should be placed on role of the regulator and energy suppliers rather than ‘slamming’ energy brokers at every opportunity as an easy scape goat.
Key Systemic Issue: Complexity in SME Energy Switching
One of the primary systemic problems is the unnecessary complexity to switch a business energy meter. There is no real reason why switching energy providers for a small business should be any more complicated than a residential property. However, the industry as managed to overcomplicate the process resulting in significant human involvement and therefore leading to higher costs, potential errors, and opportunities for mis-selling or fraudulent behaviour.
Simplifying the Process
The solution lies in simplifying the business energy switching and renewal processes. By reducing the need for manual intervention and increasing automation, the industry can mitigate many of the issues currently faced. This simplification would benefit end-users by lowering costs and reducing the chances of errors and unethical practices.
Do It For You Renewal Process: An Analysis
Regarding the BBC Watchdog’s criticism of the Do It For You Renewal process, it’s crucial to consider the broader context. The approach of this particular company to renewals is to reduce the human interaction involved in renewing a business customer, using automation. This is an innovative idea that could potentially lower costs and errors. Even though the solution that they have come up with has its flaws and we do not think it’s the ‘silver bullet solution’ (see our solution below). Such innovation, even if it doesn’t always work, in an industry crying out for innovation, should be contextualised and even perhaps encouraged. The more innovative ideas that there are in the market, the closer we’ll come to a solution that helps protect customers from out of contract rates.
Whilst we refer to DIFY as innovative, it is not a new concept and has been around for some years. In a rising market the Do It For You renewal process has often protected customers from higher prices. The reason it has come into focus in a falling market (as we have seen recently), it creates issues whereby customers have been sometimes unknowingly locked in to contracts at higher rates they can achieve today which ultimately generates complaints.
To make progress, the media should focus on how we got here (an industry that has allowed a simple process to become very overcomplicated) rather than the symptom (companies trying to find ways to simplify the process).
Fairness and Consistency in Practices
The inconsistency in rules for automatic renewals and rollovers also warrants discussion. While energy suppliers have been prohibited from such automatic rollovers for some time, perhaps the same rules should apply to energy brokers? Allowing one of the largest energy brokers in the UK to continue these practices creates an uneven playing field as most energy brokers are not allowed. It should not be one rule for one and another rule for others.
Tickd’s Approach to Renewals: Make it easy for customers to self serve
Tickd’s energy switching software addresses the systemic issues directly by simplifying the process for small businesses. Our system generates unique URLs with bespoke quotes URLs which link to live market prices with in built credit referencing. This allows brokers and customers to view and execute renewal contracts with minimal hassle in a matter of seconds. The automation of contract signing through API integrations further streamlines the process. This means that business customers can renew or switch their contract without any intervention from humans.
Our commitment to transparency ensures that commission details are displayed multiple times throughout the customer journey, reducing the risk of mis-selling. By making the B2B energy switching process ‘idiot proof,’ we empower customers to make informed decisions independently.
Conclusion
While the media’s scrutiny of the energy broker industry often highlights real issues, it’s essential to differentiate between systemic problems and the practices of a few brokers.
By focusing on simplifying processes involved in the energy industry through regulation and encouraging innovation, the industry can address the root cause of the problems and enhance the overall experience for small businesses. The DIFY process, though innovative, may not be the ‘silver bullet solution’ but lets view it in a broader context and learn from the innovative solution they have put in place to solve systemic industry issues. Was it fair to highlight the process on Watchdog? Clearly many customers have been adversely effected, and so yes it was fair to highlight it, however a more balanced view with a broader context and understanding of the market is required to have any positive impact on the industry, rather than just headline grabbing ‘broker bashing’.
At Tickd, our mission is to simplify business energy by using clever technology to make B2B energy switching and renewals simple. Our approach to the solution empowers the customer to make the decision rather than takes the decision out of their hands.
