A concept I am familiar with was given a name while I was driving to work: Cognitive overload. The radio talk show was discussing an online dating app called Tender. Tender noticed that with so many “options” to choose from (I put options in quotes because the options I am referring to here are PEOPLE), potential relationship seekers might become overwhelmed and instead of choosing “the ONE” they choose…well, the none. Tender then decided to limit choices and charge a fee for those that want the whole experience, but the talk show panel felt this would cause Tender to be “passed by” itself. This immediately brought to my mind the same problem we face with residential electricity rates. Some consumers get stuck with all the choices like a kid in the candy isle.
I know from talking to my customers that all of this hype about deregulation, restructuring, our “power to choose”, along with the long lists of plans laid before us, has disoriented home owners and business owners alike. Many just opt not to switch, and can be missing out on real savings.
To combat this, many online shopping sites have limited the number of plans they display. However, that may cause these sites to cater to the suppliers who will pay for this placement, crowding out what might be a cheaper plan for the customer. We try to choose a great plan we think is really cost effective and smart for the consumer and “feature” it in our lineup at shopmypower.com, but we cannot be sure it is the best deal for everyone. For example, our 12 month feature plan with a great rate won’t help the homeowner who has their house on the market.
So what can you do to navigate hundreds of offers efficiently? That depends on your personality.
Are you a rogue solo shopper? Do you prefer to do the research and get your own awesome results? (Did you use truecar.com to haggle your car price, hmmm?) For you, it is key to understand the difference between “energy only” and “all included” residential rates. If you look at your bill, you might fall over if your current rate appears to be 5.1 cents per kWh on your un-bundled bill, then you go online to see rates at 8.9 cents. This is usually followed by a jump ship on shopping. Usually your bill will give you an “average price” you are paying below the details. Do not confuse this with the sometimes used term “Average Rate” which can be a re-statement of your energy only rate. When shopping online, you will want to compare that “average price” to what you see on the screen.
Or…Would you rather be bathing your cat than shopping for power? Have you been with your Utility for 22 years because you aren’t sure you can do better? Then protect your blood pressure and ask a professional. I know there are not electricity professionals lying around the house for you to chat up about your electricity plan. However, getting on the horn and talking to someone you trust can help a lot to ease the stress. If you are reading this, you can probably get my cell number. Regardless of who you call, get out your bill before you grab the phone. Here are some questions to ask:
- Can you look at my bill and tell me what I am currently paying and how to shop apples-to-apples?
- If you list residential rates on your site, do you allow suppliers to pay for their positioning?
- What suppliers here should survive acquisitions and mergers? Who is the most established?
- Who do you use at your home?
- What about adding my residence to my business account?
- What else can you tell me that I may not be thinking of?
That last question goes a long way. I would talk to you about timing, billing and credit, too. It’s a great way to make a choice you can be happy with. Like chocolate!
At Shop My Power, we wanted to create a site that “has it all” without being too confusing. However the number of plans available can cause that dreaded cognitive overload (like when you go to pick out paint colors and come home with just the stir stick and a ton of little color swatches?) We get it. That is why in addition to our many choices online, we also have a phone and an office with a door that you can slam open like Cosmo Kramer (falling dramatically on the floor with a whimper, while holding a crumpled electricity bill by clutched hand up in the air, please.)
You should expect to walk away armed with what you need to know. And coffee.