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Energy Insights

Does Loyalty Pay in the Australian Business Energy Market?

In the ever-evolving landscape of the Australian business energy market, companies are constantly vying for your loyalty. From enticing offers to loyalty programmes, energy retailers are pulling out all the stops to keep you from switching to their competitors. But does this loyalty truly pay off in the long run, especially for businesses with high energy consumption?

The Allure of Loyalty Discounts

Just like your favourite coffee shop offering a free cup after every ten purchases, energy retailers are no strangers to loyalty discounts. These incentives, often tied to long-term contracts, can range from cut-rate deals to cash rebates. However, while these offers may seem attractive on the surface, it's crucial to delve deeper into the fine print.

The Catch with Cut-Rate Deals

Cut-rate deals are often seasonal, with prices fluctuating based on factors beyond the retailer's control. While these deals may initially seem like a bargain, they could end up costing more in the long run. Once the initial contract period ends, you may find yourself locked into a higher than market rate. It's essential to be fully aware of the terms and conditions before signing on the dotted line.

The Potential Pitfalls of Bill Discounts

Bill discounts for early or on-time payments are another common incentive. While these can be beneficial for businesses with high energy usage, it's important to keep track of your usage and bills. Frequent debits and credits can make it challenging to keep track of your actual energy costs.

The Temptation of One-Off Gifts

Energy retailers are increasingly offering one-off gifts or vouchers to entice customers to sign long-term contracts. While these offers may seem appealing, it's important to consider whether these benefits outweigh the potential fluctuations in electricity costs.

The Counterview

Switching energy retailers can be challenging for commercial energy customers. Factors such as not knowing the details for supply point, different contract end dates, and a multitude of different ABNs and company names that have sprung up because of business growth, can complicate the process. Energy Action has developed a software solution, Utilibox, designed to streamline this process. Utilibox houses all the necessary data to make your procurement process agile, letting you take advantage of changing market conditions. For those not using a software solution to manage their energy expenditure, it's crucial to allocate sufficient time to gather the necessary information for obtaining pricing and potentially making the switch.

The Bottom Line

While loyalty to a single energy retailer may seem like the path of least resistance, it may not be the most cost-effective strategy in the long run. Regularly comparing offers from different retailers can help you stay ahead of the game and capitalise on better pricing for your energy needs. After all, in the competitive world of the Australian business energy market, your loyalty should be rewarded with more than just a discount – it should be rewarded with consistently fair and competitive pricing.

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