The SME approach – an interview with small business energy expert Peter McLeod
7 min read
04 September 2017
Energy expert Peter McLeod advises on the right way to approach a supplier for SMEs, without getting taken for a ride.
SME business owners have to make decisions all the time, and nobody wants to be worrying about utilities. Total Gas & Power SME director and energy expert Peter McLeod advises.
It’s understandable that entrepreneurs would rather focus on the creative side of their enterprise and work on growing their business, instead of wasting time wondering which supplier they need to hire to keep the lights on.
Keeping on top of utility providers is vital to the successful running of a business – but just because it’s necessary doesn’t mean it should be a burden.
We caught up with energy expert Peter McLeod, director of SME at Total Gas & Power, who has the responsibility of serving customers in the small and medium sized business market segment. He outlined the SME approach to finding a supplier, and offers some advice on tackling the energy market.
Why is it important for SMEs to choose the right energy supplier?
Typically, a smaller business energy user will sign an energy contract at best once every year, more often than not for much longer. The average customer is signing contracts way beyond two years – up to five or six years, even – so it’s important for them to feel confident that they have done the right thing.
My experience of small business owners is that they are very busy people, they are time poor, and the last thing they need is to be worrying about whether they’ve made the right decision – or making decisions too frequently. They need to find a partner they can trust, so they know they are getting good value for money and can focus on running their business.
What are the differences likely to be between an energy product for SMEs and one for larger companies?
There are some threads that are consistent, but for us as a business we made a very conscious decision to split our business into two very distinct segments. We’ve got what we call “major business” which is large, industrial customers and public sector, and then the SME business.
We’ve done that because we see that there is a difference in the needs of these two segments. We want to be a trusted supplier regardless of customer size, but how that manifests itself can be slightly different.
Large businesses need someone that understands the complexities of the energy market and a supplier that’s flexible enough to move with them when their needs change – even anticipating the changes on the customers’ behalf. So for them it’s about flexibility and transparency. For SMEs, it’s about being straight-forward, and easy to understand – we think of all the complicated things for them. However, we certainly don’t hide anything – we are transparent about what makes up the energy bills for example.
What are the pitfalls for an SME owner to look out for when it comes to choosing an energy provider?
Whether your business is small or large, you need to make sure that partners can flex with you. Make sure your suppliers specialise in business energy and understand that your requirements can change.
It’s also important that an energy provider can offer a choice of products to an SME owner – if you want a fixed-term contract because you want price certainty, or if you want a more flexible product that moves with the market, or if you want a green energy product, there should be those options. Some businesses pride themselves on the fact that they only use renewable gas and electricity – and we’re proud that we can help them to make this choice and showcase it to their customers!
Every small business owner should feel they have some kind of choice and be engaged in the conversation about what is right for them – rather than have something forced upon them.
What should an SME prioritise when choosing a provider?
This comes down to personal preference, or rather business preference, because if there was one answer to that then we would have a single product that every SME bought.
I’ve worked in and around SMEs for 20-odd years, and one of the reasons I do it is because I love the diversity, there is no typical SME, and as a result, business requirements are also diverse.
I think there’s a need for business owners to know their own priorities, so they can articulate to a provider what things they are really bothered about. Often in a market like energy, people choose based on price, and all other things being equal, why wouldn’t you? But the truth is providers are all different, whether that’s through the green products they offer, the style of account management or customer service that’s provided. There’s no point choosing the cheapest one only to waste valuable time trying to deal with issues later down the line.
To choose the right provider for your business, you should score the importance of the following elements out of 10 before you go to market:
– Can they help you find the right product for your business needs?
– Can they offer you cleaner or greener electricity and gas?
– Will they offer you advice on how to reduce business outgoings through energy efficiency?
– Do they offer opportunities to meet with them face-to-face (such as at exhibitions)?
– Are they business energy specialists?
– Do their customers receive regular, helpful communications aside from your bills?
– Will they service your account in the way you want to be serviced?