Hi chatmasta, Kevin from Utiliz here. How did your business do? Splitting savings is always a hard pricing model to sell. Our unique angle is that we don't just switch customers to the best plan once, we remain their agent, track the market daily and switch them whenever a new opportunity comes up. We do that in return for a low, transparent, annual fee from our customers instead of taking a hidden spread on the rate. In deregulated states one can almost always find short term 3-6 month rates lower than the incumbent's rate, often as much as 20-30% cheaper, so our service can pay for itself in as little as one month. Brokers who can bring large aggregated loads can negotiate better than retail rates, even with their supplier commission. Because we will be a zero-commission broker for the suppliers (we're paid by our own customers), as we scale we'll be able to negotiate even lower rates for our customers. Not sure how long ago you were looking at this space but many suppliers now have some mechanism to help with automation of bulk switching and for those that don't we are building the tech.
It was a small shop run by two guys, mostly drawing from their first and second degree connections. But they had hundreds of customers and were making in the mid five figures per month IIRC. Take that with a huge grain of salt.
People were more than happy to pay a percentage of their savings, but that might have been due to personal relationships with the founders and the fact that these people were pretty rich already.
And yes, the ongoing relationship you mention helps. That gives an answer to "why wouldn't I just do this myself and keep 100% of the savings?"
Chatmasta, you are 100% correct. There may be times where the best rate we can find is publicly available but the service aspect will retain customers in this case, especially as we are charging a reasonable flat fee. However as we are a broker we have access to private rates and as our book grows so will our ability to negotiate discounts thus making us more sticky. A core part of the beta is a 'how much did I save' feature which will make cancelling a tough choice. Thanks for your comments!
