Future of I&C Sales & Marketing: Third Party Intermediaries

Table of Contents

• DATAMONITOR VIEW
  • CATALYST
  • As energy purchasing becomes more sophisticated, energy buyers are turning to third parties for assistance.
  • SUMMARY
  • A market is created within liberalised energy markets for TPI switching assistance. As competition increases and products become more sophisticated, TPIs are able to build stronger and longer-lasting relationships with buyers, to an extent commoditising the supplier.
  • METHODOLOGY
• ANALYSIS
  • Buyers in newly liberalised markets will tend to seek assistance with switching.
  • The differing structures and features of an energy market will determine the degree of TPI activity.
  • Encouraging free market competition promotes TPI sector development.
  • TPIs act as buying groups to give power to smaller customers.
  • The existence of a wide range of suppliers enhances TPI's broking power.
  • A three way relationship forms between buyer, supplier and TPI
  • The trilateral relationship between buyer, TPI and supplier has conflicting interests and influences.
  • Successful suppliers will accept the TPI channel and will also seek to connect with the largest buyers directly.
  • Buyers respect the impartiality of their TPI and value their relationship with them more highly than with their supplier.
  • As the energy market matures, buyer expectations of their TPI also evolve.
  • TPIs attempt to control much of the interaction between suppliers and buyer.
  • TPIs increasingly take their share of a supplier's service and revenue streams.
  • The geographic spread and site size mix of buyers must be matched by the suppliers that wish to serve them.
  • Additional complexity, cost and product options will ensure a continued market for TPIs
  • It is challenging to build up a skill set previously outsourced.
  • UK buyers now have stronger relationships with their TPIs than with suppliers.
  • The volume of TPI business is unlikely to shrink, however, consolidation within the industry could be expected.
  • The continuing need for new products ensures a sustained demand for TPI services.
  • Significant TPI growth in Central and Eastern Europe is unlikely in the next two years.
  • Datamonitor believes that there is potential for complete utility out-sourcing to develop.
  • Ask the analyst
  • List of Figures
    • Figure 1: Factors promoting and hindering TPI activity
    • Figure 2: TPI sector development versus Market Competitive Intensity
    • Figure 3: Service, Revenue and Commodity flows between the Supplier, Buyer and TPI
    • Figure 4: The evolution of buyer expectation towards their TPI
    • Figure 5: TPI intervention by supplier competency
    • Figure 6: Customer Identification Matrix
    • Figure 7: Supplier vs. TPI ratings and CSAT ratings for UK TPIs
    • Figure 8: Forecast European I&C switching rates, 2008
    • Figure 9: Utility out-sourcing flower