Challenging non-domestic energy suppliers approach to credit...

We’re looking forward to attending Experian’s Non Domestic Utilities Roundtable next month which will bring leaders from across the sector to share best practise on approaches to credit referencing in the energy industry. We believe there is lots to be improved and look forward to getting involved in the discussion.

Most business energy suppliers approach to credit is binary. If the customer meets certain preset criteria the energy supplier will offer a quote or accept a contract, if they don’t then they won’t.

This assessment is normally made based on minimum score and business SIC codes which they consider high risk. Way too simplistic in our opinion.

(Most hospitality SIC codes are still considered high risk by energy suppliers, is this based on up to date data? Or is this a hangover from Lockdwon when understandably these businesses were considered higher risk? Perhaps it’s just the lack of ability to unwind a decision that has been made at larger supply companies in a timely manner?)

Many suppliers share their credit criteria with energy brokers, some do not. For those that don’t, this means energy brokers and customers sometimes only know that a contract has failed credit with a supplier at the point of contract submission (or sometimes a couple of days later once the contract has been manually reviewed by the suppliers credit team). This creates a poor customer journey for the business customer and means the energy broker has to re-do the work and submit a contract to another supplier once it has been renegotiated with the business.

We believe energy suppliers should be much more intelligent with their approach to credit. Risk-based energy pricing should be looked at. If a particularly company is deemed higher risk than another, that should be factored into the cost. Not just ‘pass’ or ‘fail.’ This should work both ways…very creditworthy companies should be given the most competitive prices as they are the lowest risk.

This decision making process should be easily automated. The decision making process for credit should follow a process and if there is a process, it is very easy for us to automate, no matter how many different factors are considered.

Tickd’s energy software platform is capable of risk based pricing, show different prices to different companies. Pass / fail, add in some risk to the price. This can be as simple as pricing getting cheaper as companies have a higher score to different SIC codes having different prices, to a different price if the Director has previously dissolved companies.

Tickd’s system is unique in that it pre-screens every quote it offers for credit, meaning suppliers will not offer a quote if the customer doesn’t meet their criteria, or they will display the relevant quote based on the perceived risk of the company getting a quote. This means that customers don’t waste their time getting quotes from suppliers that can’t take them on, energy suppliers don’t waste their time reviewing contracts for businesses that they aren’t going to take on and energy brokers don’t have to keep renegotiating energy contracts for the same customer.

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