coworkers going over paperwork

For many brokers and salespersons in the retail energy industry, monthly commission reporting comes with heartache and pain. How can something that seems so easy to produce and distribute, create major challenges for both retail energy suppliers and brokers, challenges which could potentially have negative economic impacts?

The biggest challenge that brokers face during “that time of the month” for commission reporting stems from the lack of communication from suppliers regarding:

  • Timely payments
  • Billing errors
  • Data integrity
  • Missed enrollments
  • Incorrect commission calculations
  • Account rejection
  • Early account drops
  • Minimum payment thresholds for commission payouts
  • The list can go on….

Unfortunately, brokers often lack proper back office support and consistent communication from retail energy suppliers. In addition to lack of support, there is often a lack of urgency regarding broker inquiries with solutions and/or resolution in a timely fashion.

The Challenge

Part of the challenge is that retail energy suppliers often put some brokers on the back burner while given more value and support to their direct sales teams. In general, retail energy suppliers feel that they carry all of the operational risks and primarily make less margin than the brokers, so the brokers should do the heavy lifting.

Depending on the retail energy supplier, brokers that place a large amount of business with them are likely to get better service and quicker resolutions to customer related issues as opposed to less productive brokers. This approach makes sense as a reasonable way of allocating resources. However, when brokers feel neglected they may not want to place any additional business with that supplier. In turn, retail energy suppliers lose out on potential business the broker could have placed with them.

Communication is Key

Successful commission reporting is derived from excellence in communication from retail energy suppliers on a consistent basis. As a result, one of the primary solutions to commission headaches is for suppliers to invest time into efficient and accurate reporting and communication with brokers.

For example, if brokers receive account details daily, that puts them at ease. However, when suppliers do not communicate it causes frustration, skepticism, and more work for both parties. A failure to communicate leads to a lack of trust that damages the relationship between the broker and the supplier.

Forward-thinking suppliers that utilize broker channels often invest in backend portals that are designed to make the communication process virtually seamless. Unfortunately, if there is little support or training on how to use these systems, more problems are created rather than solved by the portal.

Like anything else, a new user of any product needs to be taught how to effectively use the product. Suppliers who communicate clearly with brokers, not only about account details and data, but also about portals and programs designed to make the communication process easier, are more likely to build a meaningful and mutually respectful relationship with their brokers.

Understanding from Brokers

Brokers are not immune from the pain and challenges of sorting data. For instance, when a broker is working with multiple suppliers, they are receiving various sources of data with inconsistent formatting, so some brokers have more in common with suppliers than they may realize.

As a result, another solution for commission reporting headaches is for brokers to seek greater understanding of the challenges facing suppliers. Brokers should understand that some of the data issues are caused by the numerous systems that are involved in the process; getting accurate data in a timely fashion can be a challenge. In addition, utility data itself is not pristine, and mistakes often start there. A supplier is integrated with an Electronic Data Interchange (EDI) provider, which processes information between the utility and the supplier. Some larger suppliers may even have more than one EDI provider. The more systems that have to communicate, the more room there is for error.

Some companies, both small and large, send commissions via a manual process which leaves room for human error. In some cases, the person in charge of handling accounts is a sales manager that relies on another department that specializes in data which could then delay the response time.

In all of these situations, brokers need to be aware of the potential for unintentional errors that might lead to commission reporting issues. The more aware brokers are of these challenges, the more likely they will be able to work together with suppliers to resolve those problems.

Conclusion

Investing in making commission reporting to be a more effective and efficient process will pay dividends in the long run. Small business issues that cause economic impact to an organization are business issues that need to be addressed first. Suppliers, therefore, need to take commission reporting problems seriously and work on building better communication and clarity with their brokers. It takes a real leader with insight to look under the hood and be honest about what the business issues are. It takes an exceptional leader to then do something about it.

Peter Drucker famously said “the purpose of a business is to create a customer,” and as we know, there is an investment associated with doing this. There is also an investment in maintaining a customer. It is more cost efficient to maintain a customer than to win them back after they have left. If brokers bring many customers, doesn’t it make sense to treat them as a valued customer? And if this is the case, then investing in them would be a wise decision.

Author:
Frank is the Founder & Publisher of Energy Pages. He establishes the direction and tone for the publication. Frank has been involved in the retail energy industry for over twelve years with a particular focus on marketing energy supply. He has a passion for helping others through challenges and connecting with people. Born and raised in New York City, Frank currently resides in Stamford, CT, where he spends his spare time coaching entrepreneurs and continuing education.

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