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PHONE+ ASKS: Is Energy the Next Big Thing for the Telecom Channel?

“Definitely. This is an untapped market. This market is a great parallel to the telecom market. The auditor helps reduce cost, the agent receives a residual by ‘switching’ the customer to Glacial Energy or PAETEC, etc., and the TEM providers like TeleBright manage the customer’s inventory and billing. Since we are trusted advisers to our customers, it would be quite easy to introduce this service and create a new profit center for ourselves. It also adds more value to our customers which helps in retaining their business.”

—Tony Cheng, president, Netstar Communications, agent

“Energy was a buzz at the last Channel Partners Conference & Expo. I’m a telecom/data person and don’t know a lot about the energy business. I’m focused on servicing my clients and being their telecom department, on their staff but not on their payroll. For me to look at energy and do it the right way, I would want to hire someone from that industry with the level of expertise who knows how to qualify, review and propose the right solution for the client.

I spoke with several of the companies at the show and walked away not knowing how to determine how much money I would make and, quite frankly, more questions than answers. It all sounded ‘too good to be true’…in those cases, I’ve learned to walk away.”

—Tim Dawson, vice president of telecommunications, Drive Technology Group, systems integrator and agent

“Offering energy services is not right for us at this time. If we were talking to the same decision makers for energy as telecom, I could see us looking into a bit more. However, that is rarely the case in the medium or even small business market. As a small agency, we must be prudent with where we spend our time. However, we are constantly looking to diversify and add to our product set, but energy just seems to be too much of a stretch for us. For these reasons, I just can’t see us putting in the time to become experts or partnering with an expert. This isn’t to say that we won’t look at it again in a couple of years, but it is doubtful for us in near future.”

—Jeremy Kerth, managing partner, Wired Networks, agent

“I would say ‘to be determined’ in regards to pure sales of energy. The commissions are relatively low compared to telecom products, but it’s certainly money to be picked up off the table. Personally, energy seems far more regulated than telecom, so I would have concerns putting too much emphasis on energy as it seems way too easy for government to change the rules. I see it as a complementary product that most certainly will grow over time as agents become more comfortable with the product.”

—Cameron Larson, principal, Astound Communications, agent

“We have been selling Patriot Energy to our existing clients and the sale process is pretty simple. You offer a buy rate that they MUST decide on within a given time or the price is lost.

So it’s guaranteed to make the client make a decision. Once you sell it, it’s over. You get ZERO customer calls. All calls go directly to the delivery company, aka your electric company.

The downfall is that it’s really only for larger clients because of the thin margins. The margins may be low, but I can promise you it’s a simple sale. If you are a telemarketing type business (dial for dollars), it’s a great addition. Call and close, on to the next. In regards to regulation, this is DEREGULATION. That means …you have the right to choose where you buy your energy from. It’s that simple. I think the fear factor is the lack of knowledge of energy. If the agent channel would listen to a basic presentation from an energy company, I promise they would say, ‘Wow, why haven’t we done this before?’”

—Greg Howard, co-founder of US Telecom Group, agent

Up Next: Is 4G a game-changer for the telecom channel? Send your answer to Khali Henderson at khenderson@vpico.com by May 30, for possible inclusion in the July edition of PHONE+ Asks. Any answer submitted is eligible for publication and may be edited for clarity or brevity.


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