Despite drastic transformations in many industries, the retail energy broker sector is still quite antiquated. With most transactions being negotiated over the phone and email, the sector is prime for disruption. In this article, we explore how various emerging energy technologies are shaping the energy broker industry and how you can stay ahead of the curve by implementing them.
The Role of Technology in the Energy Broker Sector
As technology continues to advance, the energy broker sector is becoming more modernized. At the commencement of energy deregulation, energy brokers were forced to perform many manual processes. New technologies and software have streamlined operations, made markets more efficient, and even created new opportunities for energy brokers.
Sales Operations and Streamlined Processes
Prior to many of the modern advancements in the retail energy sector, energy brokers operated like 1980’s stockbrokers. They sent manual price requests to suppliers, negotiated margin over the phone, and even had customers sign paper contracts.
With the recent development of new software platforms, energy brokers are able to streamline sales operations and become more efficient. Some of the new energy broker technologies allow for:
- Digital display of matrix prices from many suppliers
- Digital communication with suppliers for custom quotes
- Digital customer quoting
- Electronic signature of customer contracts
These advancements have allowed energy brokers to reduce labor costs and make sales processes simpler for their agents.
Supplier API Integration
Some energy brokers operate online shopping websites that allow commercial and industrial customers to sign up with suppliers directly. Unlike traditional energy brokers who bring value to their customers through service, these energy shopping sites are all about price.
Some of the more prominent sites have developed software interfaces with retail energy suppliers, also known as API’s, that allow brokers to connect directly with suppliers’ backend software programs.
These API’s make it so that suppliers can update prices in their systems to automatically reflect on the broker’s website. Also, as customers enroll online, it eliminates the need for a manual deal submission from the broker. Rather, the supplier automatically receives the online enrollment through the API which cuts out manual intervention and streamlines the process.
Emerging Energy Broker Technologies
There are several new energy broker technology tools being developed in the market, that if successful, would further transform how brokers do business. Some of these tools include custom pricing integration with supplier back-end price desks. This technology would allow brokers to instantaneously request custom pricing based on specific customer energy usage profiles and load factors.
Some additional emerging energy broker technologies include utility data connections that streamline the gathering of historical customer usage and billing data. While most of these software tools work by scraping billing data and organizing it into a user interface, there are new companies attempting to integrate directly with utility company databases via API and instantly pull usage information.
Comprehensive Energy Solutions via Tech Integration
While most brokers traditionally sell electricity and natural gas supply to their customers, some of the most successful energy brokers in the country are taking on roles of being a true energy advisor.
Rather than being one-dimensional, these brokers are looking for other ways to bring value to their customers through alternative energy solutions such as demand response or renewable products.
Some of these alternative energy solutions utilize technology to seamlessly integrate with customer’s systems. Demand response, for example, is the process by which customers can reduce peak energy load during times of high demand and receive cash incentives for doing so.
Since knowing when and how to shut down parts of your facility can be complex, many demand response companies have software components that can send signals to your breaker-board to turn off certain motors when a high-demand event might occur.
Energy brokers utilizing technology like this to provide additional value to customers are ahead of the game. These technologies make it simple for brokers to integrate solutions into their existing operations without having to take on the responsibility of managing a new product line.
How Technology Empowers Brokers in Business
Today, energy brokers that are not utilizing the latest technology are behind the competition. There are several ways that these new technologies are empowering energy brokers to become more efficient and competitive with their service offerings.
Automation Capabilities
First and foremost, many energy broker platforms have some sort of automation that can eliminate tedious manual tasks. For example, a matrix pricing tool allows brokers to easily compare rack rates from suppliers without having to manually open several excel files and do a price comparison. In addition, there are some commission reporting tools that can save brokers many hours when calculating payroll for their energy salespeople.
Market Insights
While there are limited market tools available in the retail energy sector, there are several market insight tools available in the wholesale energy market. These tools allow brokers to view electricity and natural gas futures prices, compare calendar strips to existing customer costs, and even set trigger prices to get alerts when futures markets are trading below a certain threshold. This empowers the energy broker to better manage his accounts and to deliver the lowest costs possible.
AI Optimization
With the onset of artificial intelligence, there are several applications for AI in the energy industry. For example, if an energy broker were to feed customer usage data to an AI bot in a specific format, he might be able to quickly calculate the total amount of energy being used during off-peak hours. This would give the broker the opportunity to offer a custom energy supply product, such as a block + index, that could potentially save the customer a significant amount of money. Without a tool like this, these calculations could take hours to perform.
Steps to Implementing Energy Broker Software
If you are thinking about implementing new technology in your energy brokerage but don’t know where to start, here are some steps to follow.
Research & Define Requirements
It’s important to first define the problem that you want to solve. Are you spending too much time managing energy contract renewals? Perhaps you continually find errors in supplier commission statements. When you can clearly identify your problems, you can then research the market for different solutions.
Develop & Integrate Essential Tech Features
Next, you can choose to try and develop software solutions in-house, or you can search for an energy technology firm that has some sort of software platform already in place. Either way, you’ll want to ensure that this solution clearly meets your needs and adheres to whatever specifications you previously defined. Next, you need to develop a clear implementation plan so that you and your team know how to use the new system and so that it is effective in your operation.
Testing Before Deployment
One of the most important steps that is often overlooked is the testing of any new technology or software program. It is vital that you work out any bugs or kinks in the new system before changing your operation and relying on the new technology. There are software testing firms you can hire to do this for you, or you can simply test the new technology on a small segment of your energy broker business.
Key Features and Benefits of Diversegy’s Platform
As one of the nation’s leading energy brokers, we have implemented several software programs and technology to make our business more efficient. Here are some of our systems that make being an energy broker simpler for our sales partners.
ELIAS
ELIAS is our home-grown energy broker portal that allows our salespeople to track customers, commissions, and deal flow. In fact, unlike other energy brokers who license existing software, ELIAS is proprietary to Diversegy and is unique in the marketplace.
MATT
MATT, an application within ELIAS, is our proprietary pricing and sales contracting system. Using MATT, our sales partners can auto-sort matrix pricing from the nation’s leading suppliers to find the lowest price in any market at any given time. MATT cuts down on the manual process of having to comb through supplier matrices to find the best deal for your customer.
Furthermore, a recent enhancement to this system allows sales partners to request and send matrix contracts to customers for electronic signatures. Gone are the days of having to manually complete a contract. Simply select your price, enter your customer’s details, and send the contract for approval.
Upfront Commission Management
A major upside of Diversegy’s energy broker platform is the ability to earn an advance on your monthly energy residual payments. While many energy brokers are cash flow negative due to the long waiting periods for commissions, Diversegy offers energy brokers the opportunity to get paid upfront when the sale closes. This is a major advantage for energy brokers that are looking to grow their business quickly by hiring new salespeople and investing into marketing.
Transparent Reporting
Another critical element of an energy broker platform is transparency. Unfortunately, there are many energy brokers that do not honestly report on commissions or disclose the total profit margin on each deal. At Diversegy, you can rest assured that we offer the most transparent energy broker platform in the nation. As a publicly traded company, we also have an obligation to transparency in our reporting and commission compliance.
National Licensing & Market Access
If you are interested in expanding your broker business across state lines or even having a national presence, then energy broker licensing is a challenge for you. As a Diversegy platform participant, you can enjoy access to all deregulated markets through our national licensing. Diversegy gets energy brokers started and selling quickly.
Ready To Take Your First Step Toward A More Profitable Future?
Are you interested in learning more about what Diversegy’s energy broker platform can do for you? Contact us today to schedule a call to see a demo of our platform. We will also share success stories with you about our other energy broker organizations that are experiencing tremendous growth on our platform.
