I remember moving to Lubbock, Texas when I was in the fourth grade. My dad threw down the electricity bill and cursed. I think that was the only time I heard him curse until we were adults. As a monopoly, LP&L the local power company was at it again, you know, socking it to us. We believed that anyway. I think it is that feeling of growing up in monopolies; peppered by how little control we have over how we were treated by utilities as a whole, plus the addition of bad players in today’s market leads to a crippling amount of fear and distrust by consumers in the energy market place. And by crippling, I mean that tactics consumers use like with-holding information, refusing to provide documents, or concealing other offers through fear that they will show their cards, can cause a shopper to shoot themselves in the foot.
I see it all the time. While shopping for rates, customers are vague about offers, about start dates, about how many meters they have. They dance around saying what the competition is offering and what is included in their prices (if they even know). They exaggerate what the neighbors are paying.
Why do normally honest folks resort to such desperate behavior? Perhaps it is because there is nothing worse than being had. No one wants their hard earned money to fall into the seemingly bottomless pockets of rich power companies; and maybe by fully cooperating, we are opening ourselves to being suckers. There is fear in the energy market place. Maybe we haggle like mafia over our power bills because our employees/employers are counting on us and every penny counts. You bet it does. Let’s talk about some concepts and practices that might lower your blood pressure a bit.
Expect to find a fair and good rate. Not a miracle. Let’s start with expectations. There is a cost to doing business for suppliers and that money will be made. Period. From my experience, I believe that the customer who screams the loudest for an even lower rate, sometimes does get a seemingly lower rate from the supplier BUT that customer’s bill can be higher due to added fees, meter fees, and contract language. That supplier made their money back somewhere. Folks, there is range to currently going fixed rates and a good broker can help you find an offer at the bottom of that range, but clamoring for even more will only cause deception. Lesson number one? Look for a good rate. Not a miracle.
Consider how you spend your research time. Using that time shopping multiple suppliers is a mistake. Procurement is complicated and relationship oriented and also masked in strange language (I like to call this language “Elec-tron.”) Many try and shop for their own business by calling 12 companies and asking for a price. What they do not know is many prices are like Caesar salads – they look like they are good for you, but they are not. You have to watch market conditions, compare contract language, look at components, supplier history, and haggle in a very special way. Besides, once you give 12 suppliers your email you will NEVER stop hearing from them all. It is a nightmare. To satisfy our urge to research, I suggest researching a great broker. ONE BROKER.
Understand the competitive shopping process and play fair. Prices are given (from suppliers) first come first serve to businesses and brokers. In order to understand why else this matters, it is useful to know how brokers, suppliers’ reps, and door knocker agents get paid. This bit about “first come first serve pricing” is a huge piece of information. Basically, if you are asking 3 brokers to get you pricing, only one of them can get pricing from each supplier. What a mess. Now if you want a truly inclusive list you have to deal with an army of brokers all with a different idea of “fair price.” Oh my. What if my buddy at supplier XZY wants to give me a rock bottom rate, but another broker requested a quicker matrix price first? This is a difficult concept to explain so you can really understand, but it is key. If you spread yourself out shopping around, it is like applying for 12 loans…you may get a loan but your interest rate might be penalized by all the shopping.
Consider giving one broker the information, documentation and responsiveness you demand from them. This concept alone will save you a fortune. Instead of giving a little bit of information to multiple channels, why not give ALL of what is needed from you to get you a great rate to one person? Without a bill copy, looking at your historical usage, reviewing some credit information and possessing all your account numbers, all those rates you are racking in on your own are…GUESSES. The agents trying to win your business know that it is unlikely customers will give them what they need for a sharp price so they get a price off of a matrix somewhere instead of shopping for competitive BIDS and customer ends up paying more for a quick turn around.
Here is your Reader’s Digest “What your electricity broker wants you to know” confession: If I know I have a customer who:
- Understands that frantically calling a dozen companies is confusing, futile, and exhausting for all of us and that this behavior will get in the way of the great rate they want
- Has chosen to trust me due to testimonial feedback or respect for our industry knowledge
- Allows me to do my due diligence by giving me what I need from the get go
- AND is available to sign the deal when it is time to take action?
Well, I will barter like a mobster for that customer. Those are the customers we want, and who will ultimately get the best rates from suppliers as well. Give trust a try today.