By the way, whats your price?
As competition tightens, the art of presenting energy procurement options to clients in a strategic fashion has become more challenging. Often within minutes (if not seconds) of meeting a customer, the conversation can quickly turn away from building a long lasting relationship and instead move right to price.
Not to worry, the question of “what’s your price?” when handled correctly can certainly work to your advantage. Instead of folding like a lawn chair the next time you hear the question “what’s your price?”. Open a conversation about risk tolerance, seasonality and your ability to leverage competition. You will then be well positioned to deliver real value instead of being viewed as a number (like everyone else).
Below you will find expertly tailored advice, shared with me by some of the most successful brokers and consultants in our industry. These suggestions are designed to quickly turn the price question into an opportunity to educate and fulfill the long-term goals of clients. Please use and modify these ideas to fit your individual style and business process as you see fit.
Highlight Risk Management
Always acknowledge that price should be a concern, but the cost per kWh should not be your clients only concern when considering procurement options. Instead, carefully uncover clues about risk tolerance. Customers must know the difference and take into account market risk vs. budget risk. Ask your client if she values price protection, cost control, and risk mitigation? Or is she more interested in market timing and or leveraging downward market trends?
Why would you ask this?
The answers give us clues about different strategies you might employ or offer an opportunity to explain that even fixed prices can change depending on contract language and that you have carefully vetted supplier agreements to prevent this from happening. While you’re on the topic of contracts feel free to touch on renewals and the fact that you help clients avoid post-term pricing nightmares that can arise from signing the wrong agreement.
Tis’ the season
On a micro level, energy pricing changes by the minute. From a macro point of view, retail pricing varies from season to season with notable swings during peak weather periods such as summer and winter. Clients must be made aware that the lowest price today may not be your least expensive option over the long term. Move the focus away from today’s lowest price and towards helping clients manage the procurement process, executing energy purchases during times when long-term rates are at their least volatile.
As an energy broker, you have access to multiple pricing options so be sure your client understands that suppliers will compete on price while you manage their strategy. Put the customer at ease by emphasizing that the competitive nature of the retail energy business will work to their advantage as you administer the bidding process.
The evolution of the energy market, as well as changing regulations, have made it more difficult for companies to control their energy expenses. Providing transparency into factors that impact costs such as risk, seasonality and competition, helps focus the conversation on developing an energy strategy, not just a pricing strategy, positioning you as a real asset to any business that values its bottom line.