1990: the year of the first connection of the Channel Tunnel and the first steps to a deregulated, privatised electricity market.
The concept of only having the slow ferry as the habitual choice for Channel-hopping seems quaint now, but when it comes to the deregulation of the energy markets, some habits die-hard.
The first segments of the market to open were for business energy, and large business energy users at that. It just so happened that businesses were allowed to take their first steps into switching energy supplier in April and October. To this day, we still see significant peaks in energy contract renegotiations in those two months.
Now tradition and predictability is not necessarily a bad thing, but when a generally underactive market suddenly becomes exceptionally busy, problems do arise.
It’s a frantic time for the market. Think popping into John Lewis at 5.30pm on Christmas Eve to buy all your presents. Actually, think popping into John Lewis at 5.30pm on Christmas Eve, and finding that they are linking prices of presents to their relative demand.
It’s actually a pretty accurate analogy – a customer going into the new world John Lewis and trying to get the attention of the harassed price makers is going to have a real job on their hands, as if they were innocently walking onto a city trading floor with the intention of using a cash machine! Where on the city trading floor it is the intermediaries that get the attention and their relative value trains the focus of the minds and actions of the traders, so a customer who doesn’t use a bulk-buying representative in the new world of John Lewis, being seen as less valuable, won’t be giving the gift of choice come the following morning.
So that proves that the business energy broker that you’ve been using for years is the solution to your needs come the annual April round of business energy contracting?
Well no, not necessarily. You see, your broker makes the self same value judgments that can often push some clients to the bottom of the queue – if you use a broker you should get a price and get it before the deadline on 28th March, but you won’t necessarily get the best deal because the time just wasn’t there to focus on your needs.
Now is the broker wrong in this? Well, yes and no. Yes you shouldn’t bite off more than you can chew and promise a service you can’t deliver, but then again no, in the sense that this mad market that suddenly comes alive twice a year and the foresight to recruit in advance needs to be tempered with the need for experience, insight and patience, not a temporary fix.
So what to do?
Well, firstly if your contract ends in April get a broker, you simply won’t get the deal you deserve if you don’t.
Secondly get a broker who has the capacity and desire to serve you as if you were their only customer.
Thirdly if you have a broker already, and you haven’t received that level of service then shop around the broker market and quickly. The sooner a beneficial relationship can be struck the sooner businesses can start saving.
And finally, whatever you do, do not allow yourselves to be rolled over; the premium over negotiated rates is a staggering 61%, and that’s a business energy Christmas present that nobody wants.
So the lesson: don’t get left on the shelf by your energy broker. And why not give Business Juice a try?
We’ve never knowingly unsold.