How To Master Pricing for Your Customers with an Energy Pricing Matrix

3 min read
13 December, 2022

Navigating the numerous different energy pricing to find the best low-cost option for your customers can be exhausting. While leveraging a quality energy broker software can help tremendously mastering the difference between pricing matrix and custom pricing should be every broker’s goal as well. With a specialized understanding of how the industry adjusts, displays, and negotiates pricing, you will be able to establish a strong and loyal customer base

Energy Pricing

Finding the lowest offer for energy is difficult. With hundreds of suppliers offering different rates and packages, it can be hard to determine which is best suited for each customer. That’s why it is so important to understand the energy pricing matrix. Seasoned energy brokers will be able to determine if a customer, and their needs, are more suited for custom or matrix pricing. Understanding what goes into pricing energy is crucial to get your customers the best package. Knowing what is considered when calculating the price will help you ask smarter questions and be better positioned to help your customers make a decision. 

Energy prices are known to vary, but in a normal market, prices should stay within a specific range. Dramatic price changes can be easily provoked by numerous factors. Weather directly affects energy consumption, and though it is predictable to a degree, it can suddenly change. Extreme weather, like hurricanes and blizzards, can cause the price to skyrocket if the electricity facilities are damaged. Politics can also affect the price of energy, whether it is through regulations, political unrest, or trade agreements, it can immediately cause pricing to shift.  

What Is an Energy Pricing Matrix?

Matrix pricing is a generic rate posted by the energy supplier that can be sold to customers. These prices are updated on a regular basis and are specific to one utility. During this selling process, receiving a quote from suppliers can be bypassed because this is a pre-approved price determined by the seller. As a result, energy brokers can close the deal on the spot. The supplier’s matrix can change based on the average load factor for a specific utility. 

Your load factor can affect your ability to use matrix pricing. If you use under 1,000,000 annual kWh or 100,000 annual CCF of natural gas, then the pricing matrix would be the perfect solution for you. Not only will you save time by not having to request custom pricing, but you can be assured that you are not overpaying. 

What Is Custom Pricing?

Custom pricing is unique to each customer because it is based on their personal load profile. The buying process for custom pricing tends to take longer because the supplier must evaluate the customer’s credit history, load factor rating, energy consumption history, and more. An experienced broker can look at a person’s profile and determine if they need to request a custom quote. Typically, if your load factor is greater than 50% then you would be best suited with a custom package. 

If you use over 1,000,000 annual kWh or 100,000 annual CCF of natural gas, then you will be required to get a custom quote. Most large businesses operate with custom pricing provided by their suppliers. If a supplier were to offer matrix pricing to a large organization, it would be a risk and they could end up losing money. Without closely evaluating the customer’s load profile, they cannot offer a calculated price that benefits both the user and the supplier. This cost-to-serve factor is crucial for any supplier. 

How Does POWWR Help Brokers With a Pricing Matrix? 

POWWR’s energy broker software, Broker 360, helps you generate sales and increase your profit by providing a system that ensures a more successful transaction. By decreasing the number of hoops you have to jump through, you can be reassured that the possibility of contract rejection is greatly reduced. We help you keep track of important deadlines and create campaigns that will help you learn important information about your clients. 

Above all, we give you access to clients that you were not already working with, expanding your connections, and increasing options for your clients. If you want to work more efficiently while providing your clients with the best service, book a demo of Broker 360 today!

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