Q: What is the biggest difference between household and B2B supply?
“Well, the B2B divisions have tended to have a more stable success level. I guess you have to have a look at the history: the market we have today grew out of regional monopolies and came with legacy systems and processes. In the domestic market the sheer volume of data that needs to be handled is what suppliers struggle with. in B2B there are fewer end users to deal with, and they’re dealt with in a very different way – it’s less mass market, it’s often more bespoke.
“In the corporate market we’re dealing with big, risk-managed deals that are complex, and individually shaped and designed for those customers. You can’t achieve this in the domestic market but in B2B you can sit down with a client and literally ask them face to face: what is it that you need, and what are your challenges? And we can then respond to those challenges, either by designing a product or helping with their energy efficiency or other commercial arrangements.”
Q: And in terms of competition?
“In B2B there are now more competitors than there have ever been.
“We still have a strong market share – and that’s not because of history. It’s hard fought and hard won. Our customers absolutely have choice and big-end B2B customers are no fools, they know what they’re doing. We give them good service and good products so they stay with us. But there are some really competitive offerings out there; some are really high quality, some are very sophisticated, some are just cheap. As one of the biggest suppliers we have to be a blend of all of that. And focus on building long-lasting relationships.”
Q: What opportunities does this closer relationship with customers open up?
“It’s less about buying a commodity in a very transactional way and more about becoming a true partner. I can give you an example of how interesting it can get: one of our clients is McDonalds, and we have a 20-year supply deal with them. When you’ve got that big, long-term agreement that goes through to 2035 it gives you an opportunity to get much closer to that organisation and start to interact in much more interesting ways – getting into the demand side, potentially helping with energy efficiency or other commodities, metering, data, exploring risk sharing. I’m not saying that we’re doing all these things with McDonalds but that kind of relationship gives you much more opportunity to explore. You’re a partner. Energy has always been more transactional but there’s no reason it can’t be like other professional services like tax firms and legal firms where the relationships are long and you can build that trust.”
Q: Where is the most exciting innovation taking place in the B2B market?
“Most of the innovation we’re getting involved in is around energy solutions, getting in on the demand side of the meter, and forming longer, more interesting relationships with clients. This is an area we’ve had less involvement with in the past, partially because it requires trust, but we’ve built trust and we’re now beginning to work on energy solutions – whether that’s helping customers to use energy at the right time of day, or reduce consumption or interact with market mechanisms such as National Grid’s demand-side balancing reserve, or STOR .
“Quite recently we’ve acquired a small start-up business based in south Wales called Rumm, which is predominantly a data management and data intervention company – they collect data from remote devices but they also have behavioural scientists and carbon psychologists at work for them.”
Q: How does the work done on the corporate level impact the smaller end of the B2B market?
“Our market space is the larger end of the B2B market. Our smaller clients tend to spend £50-100k a year with us. It’s still a large amount but a lot less than the top end where customers spend hundreds of millions every year. With our big corporate clients we have bespoke deals – we don’t pitch stuff to them because we try to work with them to find out what they need and then design a product and service around that.
At the smaller end we have customers that are more transactional, and they don’t have the time or capacity to think too much about energy so they want simpler services and this is where we tend to design offerings for them. Generally what this end of the market wants is more certainty. So when the feed-in tariffs started to come through, as changes to taxes came through and we had to pass them on to our customers, our customers said: ‘we don’t want our costs to change every time something changes, give us a fixed price’. Some of the things we work on is guaranteeing that the price you pay at the beginning of a contract is the same price you’ll pay for the duration. It sounds simple but it means there’s more risk for us to manage – every time the government does something new, that’s another risk we have to manage. But that’s our bread and butter, and what we should be doing for clients.”