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New survey shows TPIs at risk of being left behind on technology

Tom Goswell Tom Goswell Consultant
22nd March 2018

The results from our new survey covering opinions of business energy suppliers on third party intermediaries (TPIs) are published today. It is clear that the suppliers strongly recognise the important role of TPIs in the business supply markets, but equally clear that there is much more to be done in the sector.

First on the list is embracing technological change. There appears to be a discrepancy between what suppliers think are the most important avenues of growth (the likes of demand side response services and connected technology are high up the list), and what TPIs can currently offer to customers. There is a technological risk for TPIs – many do not have the in-house expertise to fully understand flexibility propositions – which shows in the slow take up of these services. There are of course TPIs that do offer a wide range of energy services, and these are painted in a positive light by the suppliers responding to our survey. But the feeling from suppliers was that if TPIs are too focused on the “transactional” part of the business, they will be left behind as the market moves at pace towards flexibility.

Another outcome from the survey was the caution with which suppliers approach the TPI sector. For larger suppliers, this tends to take the form of capped commissions, strict credit policies or prescriptive guidelines. Smaller suppliers may be limited simply by their comparatively limited resources, or a desire to only work with TPIs that share their (often strong) ethical values. Either way, there is a recognition of the reputational risk for suppliers of working with TPIs that do not meet their standards.

On a similar note, TPI commissions were a hot topic in this survey. No suppliers felt commissions were fair, although some did say they were representative of the market. There were numerous calls for more transparency, openness and fairness in the market, especially when asking suppliers what would improve their relationship with TPIs, or when discussing regulation of the sector.

Much of the feedback received through the survey focused on where TPIs can do more, but it was made clear that the channel remains suppliers’ most important route to market – indeed, 83% of respondents put TPIs in their top two sales channels. TPIs will continue to be an crucial route to market in non-domestic energy supply, but if they are to thrive in a rapidly changing landscape, it is clear that they will have to move with the times.

Our first survey of suppliers’ opinions on TPIs is available now. To find out more, please contact Robert Buckley on 01603 604400 or enquiries@cornwall-insight.com.

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