"My Experience Selling Energy" - One Agent's 6-Month Education Bucks Conventional Wisdom

Posted 6/22/10 By Dan Baldwin, TA Executive Director, 951-251-5155 email

Telecom Association spends quite a bit of time distributing vendor information to our 3,800 members but we also spend as much time as we can soliciting and evaluating telecom agent and channel partner feedback. It's one thing for TA's vendor to say one thing or another about their service (and how easy or hard it is to sell) and quite another thing for TA's members to confirm that information.

So anyway, last week I had the chance to interview Marshall Lipscomb, President of TelogixSystems, a telecom agency located in Illinois about his experience selling gas and electric services to his end-user business clients and prospects. 

The bottom line for Marshall was that he found ...

there was not the necessary return on investment he needed to keep putting more time in selling gas and electric in Illinois. After trying for six months he's recommitting all his selling time to telecom and MPLS networks as well as mobile business apps that he's discovered sell amazingly well to small businesses. 

Click the player below to listen to the interview. Click here to download the MP3 recording.

 

Recording Links, Quotes & Notes

00:01 Intro - Marshall's LinkedIn page,  Marshall's business website,   Previous Ameritech agent, Terri Lipscomb's LinkedIn page, Represent all three wireless providers - AT&T, Verizon & Sprint

02:20 "How'd you get into energy?" - After PAETEC's interest in becoming a REC or "Retail Energy Company"

03:30 "How'd you find energy companies to represent?" -  It took awhile to find energy companies that could provide service to business customers in central Illinois.  Some wanted direct reps, not agents. Looked to represent several. Energy companies to represent include First Energy of Akron Ohio, MidAmerican of Iowa, Direct Energy and Patriot Energy.

06:00 "How'd you find energy prospects & what were the challenges?" - Hard to "add value" & get away from the commodity issue. Mostly going after SMB multilocation.

08:15 "Was energy a good lead to get into see prospects?" - Not a lot different from telecom. The decision maker for energy is often different from the telecom or data decision maker. Avoid getting sent to "AP" or the accounts payable person.

10:00 "What other problems did you run into?" - If you represent more than one supplier you need a "Retail Electric Agents, Brokers, and Consultants ("ABC") License".

15:00 "Did you run into many other energy brokers or energy direct reps?" - Mostly brokers. Direct reps only go after the biggest energy customers. There was a problem of some companies turning their direct reps on the prospects you dig up.  Vanguard Energy out of Chicago is a quasi "energy master agent" of sorts that could solve a lot of problems for agents wanting to broker energy. Prospective agents should check out WTG's energy webinar.

18:00 "Did you run into energy brokers that were succeeding?" - Some energy companies had "too many" agents and were cutting unproductive agents. Providers think energy is "too complicated" for telecom agents.

20:00 "Were the prospects you were talking to used to buying through energy brokers?" - It was a mix. About 65% of many prospects were buying through alternate providers. 24 month contracts seem to be the norm. Most business customers know they have a choice. The state of Illinois did a good job of informing everyone they had a choice in energy providers.

21:40 "Sounds like you really need to find a selling pro in your state?" - Yes. You need a quick price quoter and you really need to know the in's and out's of your state. Customers with locations in multiple states create problems.

24:10 "What other advice do you have for telecom agents getting into energy?" - Pass & get into mobility applications. Energy is pure low price. I could not even win over my brother-in-law's energy contract. The existing provider (First Energy in my brother-in-law's case) will match whatever price you come up with to not lose the business.

28:00 "What can you tell us about the opportunity in mobility applications?" - We're really doing well with Pronto Forms. We're leading with it and about 45% of the people we approach with it have decent interest. The app converts any paper form to a digital form to go on any smart phone like the Blackberry or iPhone. There's just a flat monthly fee per phone per month, not per form filled out. We're experiencing 95% retention and then we're invited to look at the telecom.

31:00 "What's your opening 'acid test' question to screen for interest for mobile apps/forms?" - I've got it on my line card and ask ...   Plus the company already has about 1,000 forms in their template library. The owners of the business really like digital forms as a way to save on labor.  It really leads to our being able to look at all their cell phone bills.

33:35 "Do you do the cell phone optimization monthly service?"  Not really. We worked with Telegistics a while. We prefer to "consult to sell" rather than "sell to consult". 

 
If you're interested in learning more about how Marshall & Telogix is winning new customers with mobile apps contact Marshall at 217-355-4400 or visit their website at www.Telogix.com

 
 

Comments

[Chuck Anthony]

I doubt that he was competing with an incumbent as 65% already are using an alternative.

[jay adams]

Interesting that he said the Incumbents would match the competitors price. I have heard that the Incumbents have Tariffs that they have to sell at like the ILECs for Telecom so something seems amiss.

Good to hear others perspective but there has to be good opportunities for Energy in some areas based on what others I've read/heard from.

[Anonymous]

I think if you can position supply in addition to ancillary offerings (i.e. retrofitting) then you create a sticky offering with some very nice margins. Any prospective agent who is looking to get involved in energy will need to spend the time educating themselves. You can't just think money and jump right in, you start small gain confidence and make the larger steps.

We are seeing the commoditization of telecom just as energy has already experienced. However, in energy we won't necessarily see the rates go down for good due to stronger impact of supply and demand (fuel source availability.) Either way, their is no denying the intersection of these two industries with IP based lighting just on the door step.

[Mike Tighe]

Great interview and congrats to the agent for getting his feet wet. It's always helpful to hear from other agents. The interview confirms some of my hesitation with selling energy. It seems to generate a lot of sizzle but have yet to see any steaks. It's never as easy as it sounds.