Retail Energy Billing – Partner Versus Vendor
What Does This Really Mean?
Between ever-increasing competition, changing regulations and growing demands among cost-conscious consumers, retail energy providers (REPs) have their hands full. Because billing is central to any REP’s operations, providers often attempt to address these challenges with better billing systems – and rightfully so. According to Quindi Research, 70% of energy retailers agree that their billing and CIS solutions are “key enablers for their business strategies.”[1]
Choosing a billing system can be difficult, though, because the solutions are becoming commoditized. Given similar features, price points and licensing options, one solution may seem just as worthy as the next. In terms of off-the-shelf capabilities, that’s often the case.
Listed features don’t paint the whole picture, however – far from it. Billing and CIS providers vary widely, and the company and people should be evaluated just as closely as the solutions they sell. As anyone who’s implemented commercial software understands, the provider’s approach to implementation, development and support will make or break even an “optimal” solution.
That’s why, when it comes to billing software, the most important differentiator between a good billing provider and a great one is their willingness to partner with you, not just sell software.
But what does that really mean? Furthermore, how can you even tell the difference between a vendor and a partner? The core definition of a partner is “a person or company that takes part in an undertaking with another or others, especially in a business or company with shared risks and profits.” While a vendor is “a person or company offering something for sale.”
I believe this distinction is especially true when it comes to retail energy billing providers. But to bring it home, here are two examples that might suggest you’re working with a partner, and not a vendor.
- They’re Committed to Your Core Business – Understanding, Attracting and Retaining Customers
With fluctuating rates and new players entering the market in droves, few providers can compete on price. Customer service is key, and that requires more than a great front office team. It requires a thorough understanding of customers and their behaviors. And it requires an understand that, more often than not, your invoices and self-service applications are actually the most frequent touchpoints between you and your customers.
Not surprisingly, 80% of Quindi’s respondents also said that a good billing system has a significant impact on competitiveness, customer satisfaction and loyalty.[2]
That said, there is no one-size-fits-all billing system. A vendor may offer great customer facing features, such as live chat and mobile-optimized web portals for enrollment, and account self-service. But then what? Further enhancements might be a challenge, and the more rigid your vendor, the more you are forced to adjust your business to their software, rather than having tailored tools to meet your needs.
On the other hand, a billing partner will recognize that your business is all about attracting and retaining customers – and that you have unique strategies in mind for doing so. Executing these strategies however, requires specific software tools and a willing partner.
Tools such as data analytics allow you to better understand customer behavior. Such data can be used to create new products, and new methods, to attract new customers and reduce churn. Your billing partner can use the data to craft a unique billing and customer communications solution that is truly optimized for you – perhaps on a market-by-market basis – with enhancements developed exclusively for you and not shared with your competitors.
- They’re Ready to Share Risks with You, Market by Market
Regulations and industry processes vary from state to state, but few off-the-shelf billing solutions are optimized for every deregulated market. As a result, retailers often purchase and implement multiple solutions from multiple vendors, using workarounds and cobbled-together add-ons to accommodate different and changing rules. With the right partner, however, a retail supplier can rest assured a long-term solution is top-of-mind.
What does that long-term solution look like in practice? Consider the following scenario. You have active customers in ten markets, but you’re not happy with your current billing system. What’s more, most of the alternatives have similar features, functions and pricing. However, there is one solution that stands out not because of its feature set, but because of the company’s approach. This company currently supports REPs in only three of those ten markets, but they offer two unique options that no one else does.
- First, they’ll build a market-by-market solution for you, potentially on their dime, customizing their base platform to meet your market-specific needs.
- Second, they’ll remove most of the risk associated with swapping out your current system. This might include free or low-cost licensing for a period of time, plus the ability to “soft launch” the platform with new enrollments before converting current customers.
Ultimately, a partner will be happy to offer these measures because, like you, they are seeking a long-term, mutually beneficial partnership rather than a short-term, vendor-customer relationship.
Seek a Partner
Flexibility, scalability and the ability to offer value beyond a low rate – these are the qualities today’s REPs need in a billing solution provider, yet they’re tough to find through traditional means. Mature commercial off-the-shelf systems are effective yet rigid, and customizations are difficult, costly and unpredictable.
Fortunately, there is an efficient way for REPs to leverage a market-tested platform and implement the unique functionalities they need. How? By partnering with a provider who offers new ownership models, deep expertise and the ongoing development of unique, market-specific features. The benefits of this approach include:
- Greater focus on understanding, attracting and retaining customers
- Shared risk strategy to entering new markets
- Bonafide approach to transition from existing billing systems
Most importantly, a partner is vested in your success. Under this model, you’ll realize a greater long-term ROI and gain a far greater ability to react to changing business, regulatory and market needs. So, if you’re looking for a billing and customer communications partner, who is willing to share risks and rewards with you, then consider SmartGridCIS. We support clients internationally and domestically, both regulated and deregulated, and we could not do this without partnering.
[i] Quindi Resarch, New Directions in Energy Retail: Billing & CIS for Competitive Edge http://quindiresearch.com/analyst-report-finds-billing-and-customer-care-solutions-strategically-important-for-energy-retailers/
[i] Quindi Resarch, New Directions in Energy Retail: Billing & CIS for Competitive Edge http://quindiresearch.com/analyst-report-finds-billing-and-customer-care-solutions-strategically-important-for-energy-retailers/
