Having built three telecoms companies alongside long-term partner Alan Shraga, Simon Payne has helped scores of resellers make personal fortunes. Now the duo have invested in a new wholesale model to help channel players cash-in on low energy prices.
Comms Dealer caught up with Fidelity Group CEO Payne at the Comms National Awards in London and questioned him on the new Fidelity Energy project he will be introducing to potential ICT reseller partners at this year's Comms Vision. "When Fidelity Group was launched I planned on it being a group of companies offering a range of services," he said. "The Energy project is the first service to sit outside of telecoms and datacoms. Selling to existing clients is easier than selling to new ones, and I am inspired by the Virgin model that facilitates lucrative cross-selling. So we rolled out the energy service though our Fidelity Group customers. In time, I was planning to launch wholesale services in water, insurance and waste etc, but I am now motivated to do that much sooner."
As with any industry there are normally only a few industry leaders who drive the pace and direction. Payne was fortunate enough to meet one of these leaders, Paul Havell, who is now Managing Director of Fidelity Energy. "Paul knew all the right people I needed to complete the foundations of the business, and his knowledge of pricing and service delivery is critical to win end user customers," added Payne.
"Timing is everything. The energy industry is intensely price-lead because there just isn't any post-connection service required. Unlike telecoms where there are always issues on the board, we don't have any with our energy clients. So, with sales relying heavily on price, the low price today plays an enormous factor in the ability to win the client.
"Everyone knows that petrol and energy prices have fallen over the past year. They are still at an all-time low. That means almost every customer we visit is paying 50 per cent more than they could be if they changed provider. For comms resellers who have been in the industry a long time, the sale is about as easy as selling a Mercury Smartbox. It is a window of opportunity and every day that passes the window closes further."
Payne also pointed out that there have been energy dealers around since deregulation, so the business of selling energy for a commission is not new. What's new is selling energy using the existing brand of wholesale partners. "Historically, to sell wholesale energy you need a licence, and that is a complicated process that takes more time than this window of opportunity will allow," added Payne.
"Fidelity Energy has created a solution that ticks the boxes for our wholesale partners. There are variants of the solution that can still incorporate the up-front cash components that Alan and I are offering to motivate partners. I suspect the reason why no-one has tried to fill the gap is because it is quite a unique model used by the telecoms industry. My conversations with the energy companies were all similar, with them expressing surprise that there was demand for the hybrid style solution."
Any reseller adding energy provision to their portfolio will generate 'a lot of cash', claims Payne, potentially some up-front, and very quickly. Also, a cross-sold service makes the customer stickier. "We have three different offerings and they are all familiar territory for telcos," commented Payne. "Dealer, wholesale and wholesale white label. We can have a partner operating under the dealer model set-up within a day.
"We use our well proven ANVIL billing platform as the backbone engine that drives the service, commissions and data flows etc. A wholesale partner takes a couple of weeks as marketing, branding and documentation needs to be organised."
Once up and running, Fidelity Energy partners will be saving their customers money on energy bills. "Beyond that simple message, they can choose green sources and benefit from remote controls and detailed monitoring that comes as part of a smart connected world," added Payne. "We are not pioneers in this field, but none of the clients who we have connected to date are using the technology."
There is no reason why a telco with a similar size client base to Fidelity (£8 million last year) can't achieve the same results in the same time frame. Fidelity Energy will top £1 million profit in its first year of trading. That can be copied immediately by everyone, says Payne. "In the same way that traditional telcos are converting clients to hosted telephony, the same is happening with the migration towards low prices in energy," he added. "Every month more customers will renew at the new low rates, and if they haven't renewed with you then you've missed the window."