Lesson 3: Understanding the motivation and drivers behind customer’s energy contract decisions
Lesson 3: Understanding the motivation and drivers behind customer’s energy contract decisions

The context of the buyer is the basis for understanding their energy-buying decisions and how they make them.

The goal of this lesson is to acknowledge that the modern renewable prosumer and energy buyer has more complex needs than in the past, and to start formulating a strategy and systematic approach to identifying their needs now and in the future with dynamic buyer personas that address real demands. For many companies the two main factors in contract decisions are price and the environment, but this is not enough to win a contract because the services themselves need to fit their needs. Being able to offer a choice of services that matches their priorities is a big part of winning and keeping a contract.

The basics: The buyer business model

Getting to grips with the buyer’s business model is one of the most valuable ways to ensure your quote or service offer matches their needs. It will also help with forming a picture of which of your ‘buyer personas’ corresponds to them, so you can identify what priorities they have at an early stage.

There are two parts to this; first, the main business model, and second, the business model of their power consumption. Because their power consumption model will integrate with their primary activities, an understanding of the former will assist in identifying which services are most valuable to them.

Some businesses will prioritize reliable supply or green credentials above cost, while others will be more cost-driven or have more room for speculative hedging strategies.

The focus at this stage is to identify a core set of ‘basic’ services that are essential to their business model, and to build on that in future discussions. Once your customer is happy with their most basic service requirements they will see additional services as less risky, and the opportunities for up- and cross-selling are increased.

Too much information, too early on can be confusing and put potential customers off before a contract is signed.

Business energy buyers typically sit at different stages of development in their energy business model, some having a strategy already in place and others needing guidance on the most basic services. Your role as their consultant and advisor will be key in ‘reeling them in’.

 

This analysis of the customer situation brings insight in two main areas:

  • - The customer’s primary energy service need (right now)
  • - Identification of potential needs in the future

 

The best way to get this information is through an interview, however there can be other ways to start gathering information (like web/contact forms, structured surveys, interactions at trade shows etc.), and this can help to form and refine buyer personas as well as offering  quotes that make sense to the customer and reflect their needs.

Although buyers are strongly guided by prices, your services must clearly meet their needs at the earliest stage of interaction, otherwise you are unlikely to be considered – even if you are offering the best price.

Information to gather will include all the usual details, such as:
  • Site address
  • Meter details (and numbers)
  • Size of site
  • Typical usage/spend
  • Load
  • Domestic/Commercial mix (some sites include both)
  • Existing renewable generation
  • Available/owned roof area
  • Typical wind speed (deduced from location)
  • Use of heat pumps
  • Technology in building (energy saving, smart capabilities)
  • Electric vehicle fleet size
  • Other Distributed Energy Resources already in place
Hurdles to overcome

Doubt is the enemy of good sales. If your customer is uncertain about the specifics of a contract or how well it matches their needs they will see risk. If you have a clear and speedy answer to these questions, it is more likely you will close a sale once you make an offer. Keep in mind that the answers to these will very much depend on what your company decides as policy or as a service offering, so there is no ‘right’ answer but being able to explain clearly is the most important thing. Some typical causes of doubt include:

Financing/Costs – Installed equipment always incurs a cost for installation and maintenance, but the visibility of this cost is essential. This includes the generation itself (solar arrays, wind turbines, battery storage etc.,) but also the smart tech that enables active market participation. Do you work in partnership with an installer? Do you only offer the energy service and not any equipment? Do you offer financing plans that help?

Getting Locked in – No one wants to get locked-in to a deal. Even if it is a great deal, people want to know how they can cancel and what the consequences are. Because modern energy consumers value flexibility you might want to make this as low-risk as possible. Make it clear if you have options for ending flexible contracts, switching to a semi-flexible contract, or if you can start small with just one service (power or gas) and then add service modules later.

Buyer expectations – meeting buyer expectations is always a key to success, and it is a primary reason for cancelling a service or contract. Consider also that for most businesses the financial dimension is usually the one that swings a decision, so although being ‘green’ is also a goal, you will need to make a solid business case first.

Revenue Stacking Model – this is essential to the asset-switching and market participation that modern prosumers demand, but not all customers will be clear on how this works. Some will come to you looking for a quote for ‘green energy’, without a perfect understanding of the possibilities. This is fine, but this means that you need to have a simple and clear way to explain this to them if they are unfamiliar with the concept, including real-world examples that apply to their business model.

The knowledge level of the buyer will affect their ability to decide or even to define their needs, so a key strategy is to match the information you offer with their level of knowledge (without overwhelming them). Becoming an advisor as a primary role will foster a relationship that can lead to a contract, but there can be substantial time invested in this stage. Once a customer is on-board, you can maintain a high level of service and information flow to the customer with a well-designed dashboard, but they need to sign a contract first.

The Three C’s of Energy Services: Choice, Clarity, and Control

All of your communications, services and interactions should adhere to Jules’ ‘Three C’s of Energy Services’. This will ensure that no matter how you formulate your buyer personas and (matching services/products), you will always have the best success of securing and maintaining a contract.

Choice – offer a variety of services and the flexibility to switch between them easily. Having the choice within your company will make it unlikely they will switch supplier.

Clarity – make sure the customer understands your offer and that they have ongoing visibility of their current situation and the advantages it offers (and the advantages of adding new services too). Clarity reduces uncertainty, and also the risk perceived by the buyer.

Control – keep your customers happy by giving them control over their energy supply and prices. Giving this control to the customer also unburdens sales teams.

Buyer Personas: Developing a systematic approach to profiling buyers

Creating a detailed buyer persona will help with targeted service offerings, and make your marketing activities more effective. As experienced sales professionals, you already know this, but because the market is shifting we also need to change how we look at buyer personas, and specifically how we formulate them.

 

1. Create a system for a changing market

You will need to review and update buyer personas on a regular basis, to make sure you are tracking current needs in line with new technology, the economic situation (commodity prices), and zeitgeist. To start with, the new personas will need reviewed very regularly; perhaps 2-4 times per year to start with and then on an annual basis if little is changing.

 

2. Link your Personas to your CRM and sales process

This seems like an obvious point, but unless all the sales team are aligned with your new personas, they will not bring any benefit. Planning out a basic script for different customer groups will assist your sales team in offering the most relevant services and information to those buyers. Keeping this aligned with your personas with regular updates should also be a part of the regular review process. Getting your sales team together to discuss these will help them stay focused on the customer too.

 

3. Information gathering

This should be integrated into your regular activities, so it happens more or less in the background. The point is to form a picture of what concerns and priorities the market has and to group these together into distinct personas that together match the overall landscape of the energy buyers and prosumers looking for your services. You can use various sources for this information, including existing client databases, interviews (in-person, video call, or phone), structured surveys, interaction at events and trade shows, website contact/inquiry forms, and industry research. Although industry research is very valuable, you should consider that information coming from potential customers who have already found you may be more representative of your target market. There is also variation from country to country.

 

4. Detail

It is much easier to market to a group of customers with a detailed buyer persona, because you can be much more specific in offering solutions that really match them. Priorities can vary widely across different buyers; a school for example will be less focused on making profit than a chicken farm, and the latter will be more interested in synergies achieved by combining with an EV fleet, heat pumps/storage or energy trading.

The takeaway: The right information at the right time

With a clear insight into your customer situation, their motivations and priorities, we can formulate effective personas for marketing and service solutions that match their needs. An economy of information is essential to achieving Clarity, without overwhelming the customer with information that doesn’t match their need ‘right now’. As we will see in a future lesson, we can refine this further by mapping out the buyer journey and thereby ensure we’re giving the right information at the right time. Ensuring that the customer sees you as a resource will encourage them to form a long-lasting relationship that can lead to future contracts, upselling and cross-selling opportunities in the future.

Retail organisations rarely find this information accessible but understanding these factors might help you in making recommendations to your customers. This is especially important when winning new clients, and it will strengthen your company’s position in the long run.