Yes, you read that correctly. There’s a lot of business out there being under-served by brokers. Don’t get us wrong – there are some very good brokers. But there are also some unscrupulous ones out there too.
We think the broking model has many fundamental flaws, especially for large users of energy:
Taking commissions does not incentivise the right behaviour
- They are often paid in the form of commissions, or ‘hidden upcharges’, meaning they are incentivized to put you with a deal that maximizes their fees, not minimizes your cost
- The commission approach offers no incentive for the broker to reduce your consumption. In fact, it incentivises them to get it as high as possible
- Some pool their clients’ spends, and put the spend through a deal of their own – in effect becoming their supplier. We’ve seen brokers do this and take at both ends – from their clients and from the suppliers
Service levels are poor
- There’s a lot of brokers out there who lack expertise and have a poor customer service ethos. You need great customer service from experts striving to keep you as informed as possible
- Many have hundreds of small customers, served by a streamlined process. This sausage machine approach ok for small businesses. But large, complex organisations need something far more professional and intelligent
You don’t get what you need
- Large buyers of energy need a partner that empowers them to make the right decisions, passing knowledge and expertise across. Brokers want to take it all away and not share this knowledge.
- They use relatively simple, immature hedging strategies, acting in a passive manner. What you need is a highly active approach
Organizations with energy spends into the millions deserve a better quality service.