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With the Utility Warehouse, there are two different ways to earn your money directly from signing up customers. There is a third way you can make money from being a distributor, but that does not directly involve signing up customers, it instead involves signing up new distributors, and then receiving a very small % of their customer’s monthly bill, so I won’t go into detail here.
The first way to earn money as a distributor is the sign up commission. This is paid for signing up a new customer. It is based on each service a customer signs up to, ranging from £2.50 for gas or electric to £20 for broadcall (a combined broadband & home phone package). As a distributor, it is in your, and your customer’s interests to get them to sign up to as many services as possible, as this will mean, assuming they signed up for landline, they will receive free phone calls on their landline. From my own research, through talking to other distributors, I’ve found that the average customer signs up for at least three services, and that the average signup commission is £20.
The second way you earn money as a distributor is through the small commission payment paid on each customer’s bill each month. Again, from my own research, talking to distributors, this is roughly equal to 5% of their monthly bill, with the average monthly bill being £100 (as most customers take three or more services).
When you combine these two income streams, you can see how it can quickly become very lucrative. You only need to sign up ten customers a week, and you’ll be adding £200 of residual income to your business each month. After doing this for a year, assuming you’ve averaged ten customers a week, you will have residual income in the region of £2,600. And along the way, you’ll have earned over £10,000 in sign up commission.
Marketing strategies
When you sign up as a distributor for the Utility Warehouse, they send you on a five hour course, designed to help you become a successful distributor. This course is very helpful at making you understand the services, how to sell them compliantly and how to generate your first few customers. However, once you’ve done what they tell you to do, I suspect many distributors run out of steam, having exhausted their list of contacts. So how do generate more contacts?
Door to door – you can if you want, simply go door to door selling. For some people this will work, and will work very successfully. Personally I wouldn’t want to go door to door selling. I once had a lady from Npower knock on my door to try and sell me cheaper gas and electricity, she wasn’t the best saleswoman, and unsurprisingly didn’t persuade me to switch. This was probably due to the fact that she didn’t know the prices of the gas and electricity she was trying to sell, had she known, I may have been more interested. If you are going to go door-to-door, make sure you know your product/service, don’t try and blag your way – in fact, this is a good lesson for any kind of selling.
Radio advertising – in your local area there must be a good local, commercial radio station that will broadcast to thousands of people daily, allowing you to reach your target audience for a small monthly fee. Actually, the monthly fee would probably be in the region of £2,000 knowing what I know about radio advertising (my fiancé is a radio presenter) and its costs. However, if it costs you £2,000 a month, but you are getting your message across to 50,000 on a regular basis, it might just work. You will need to monitor your leads generated, and see how many convert to see if your monthly revenue will exceed the monthly spend on radio promotions.
Newspaper advertising – every town has a local paper of some sort, bigger towns will no doubt be more expensive to advertise in, due to the fact that you will potentially reach a wider target market. You’ll need to work out how many new customers you will need to pay for the advertising to make it worthwhile. My opinion with newspaper advertising is that it could be a waste of time, because unless you have a large ad, that is very bold, it could just get lost in the clutter of all the other ads and articles.
Television advertising – in my opinion, the cost of this would be prohibitively expensive. I know from what my Fiancé gets paid to voice TV adverts that the money is big, we’re talking thousands of pounds just to create the advert, before you’ve even paid for the slots. Bearing in mind what you earn as a distributor is not very large, you would need a lot of new customers to justify paying for a TV ad campaign.
Leaflet drops – this can be a very cheap way to get your message seen by lots of potential customers. I’ve done some research into costings, and have found that leaflets can be produced for less than £10 / thousand, and that it can cost in the region of £35 / thousand to get them distributed. This means you can get your message across to one thousand potential customers for less than £50. At those sort of prices, you will only need to sign up a handful of customers to make your money back.
Networking – get yourself out there talking to people about what you do. There are many ways to do it, the most popular being organised networking meetings in your local town/city. To name but a few, there are BNI, BRE, Business for Breakfast, 4 Networking, Chamber of Commerce, Federation of Small Business, Institute of Directors, NRG and many other business forums that have weekly, fortnightly and monthly meetings, setup with the sole aim of facilitating business networking. I’ve found them useful in the past, this year alone I’ve picked up in the region of £10,000 worth of business by simply turning up and reeling off what I do. I’m no whiz at networking either, just a regular Joe.
Selling strategies
Ok, so you’ve got your marketing sorted, you’re generating lots of leads, now what? You need to convert them, otherwise all the hard work sorting out your marketing has been a waste of time. When you get your basic training as a distributor, you are given lots of good tips to help you close.
I’ve found in my career, that people buy from people. If you’re going to be a successful salesperson, you need to be a good people person. This is more true with Business To Consumer (B2C) selling than it is with Business To Business (B2B) selling. This is not to say that only social butterflies and lovelies need apply, it simply means you may have to change your outward personality to become really successful.
If you understand what type of person you are dealing with when trying to sell to someone, you can ease the sales process by empathising with them. To do this, you need to profile people. Generally, people fall into four social styles:
- Analytical
- Driver
- Amiable
- Expressive
You can probably picture people who would fit the profile for each of these styles.
To sell to a driver, you need to give them options – so that way they feel they made the decision, simple really.
To sell to an expressive, you have to make things fun, they get bored easily and are more interested in having fun, so its best to be upbeat and fun with these sorts.
To sell to an analytical, you need to know your figures, they will probably want to work it out for themselves as well, but don’t give them options! They will over analyse if you give them options and probably never make a decision.
To sell to an amiable, you will need to first get to know them and build rapport with them. Get their trust and they’ll buy from you, if you don’t get their trust or they don’t like you, they’ll probably sign up just to get rid of you, then cancel as soon as they get a chance!
So how does this all help? Well, if you can profile yourself, and you will be able to, you can see which social style you are, and role shift so that you match the style of the person you are selling to.
How do I profile people? Simple. Ask these two questions. Are they assertive or not? Do they display their emotions or not? The table below shows which style they are based on the answers to those two questions:
So, if someone was assertive and showed no emotion, you would profile them as a driver, if they were non-assertive but showed their emotions, you would profile them as an amiable. Its simple really, and it does help you to understand different personalities and therefore make you better at selling to people who are not like you.
Getting referrals
Anyone in business will tell you that the best business is business that comes by way of a referral. Its simple, you do a good job for client, you expect them to tell their friends/family/colleagues about you. It doesn’t always work this way, if you just expect this to happen, it will happen, but it doesn’t happen very quickly. What you should do is ask for referrals. At the end of each sale, once you’ve signed them up as a new customer, you should ask if they can think of some friends/family/colleagues who would benefit from talking to you about your services. This way, you should get a few names from each new customer and therefore get onto what is known as a referral train.
This is a guest post written by Tristan Crickett who is an independent mortgage broker based in Bristol.
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This blog is about business opportunities and ideas that I spot, think of or hear about and think are useful and interesting. It is intended to provide ideas and inspriation for you to help you find the right business idea for you to then grow it into a successful business.
I am a door to door gas and electric salesman and i earn an extremely good wage for working around 3 hours per day and i find what you are advertising a extremely misleading.utility warehouse doesnt pay anywhere near this, how can you justify, 10k and 2600 residual a year suceeding? I belive this scheme is a dangled carrot that nobody ever seems to get, much like how the cobra marketing group works.its a known fact that consumers change there utilitys annualy, so all you will be doing is keeping your residual toped up. I belive that this colum is a marketing scheme in itself, and there is a high turn over of staff (and presumeably you loose your residual if you leave?) as people realise you cant make a decent living out of utility warehouse.just out of interest how many customers and how many years would i have to work to earn £1000 a month residual after tax and NI based on 50 customers leaving per year? and how much would i have earnt in commision in this time?
Josh,
Interesting points, I’ll ask Tristan to respond with an update.
Hi Josh
I don’t actually do any utility warehouse anymore, but the figures they tell us are that people stick with utility warehouse, and they have a retention ratio of 99% – whether or not I believe that is a different matter.
To earn £1000 a month after tax and NI, you would need gross earnings of about £1,300, so divide by £5 to give you 260 individual customers (assume they all pay around £100 a month on their combined bills), or 2,600 group customers (again assumes they all pay around £100 a month on their combined bills).
Just to re-iterate, I no longer am involved in UW, but these are my understanding of the model as of when I was involved in in.
Hi chaps, i am currently a utility warehouse distributor and am doing very well from it, as you say most customers leave after 12 – 18 months, that is not the case i know of distributors that have been in the business for over 5 years and not lost a single customer, again, its not easy and nobody says it is, if you want a top up on your anual salary and are prepared to work a few hours a week and talk to everyone you get the chance to then it is very profitable as a part time job, anybody has any concerns of doubts about utility warehouse speak to one of the many who are doing very well from it. i did and i dont regret it,
Cheers Si
How do you get a chance to sell gas and electric for three hours a week ?
I’m a financial adviser. I use UW as one of the range of things I can do to save people money. I don’t go at it hammer and tongs like some people, just when there is a decent saving to be made, say over £20pm.
There are two types of customer – those that switch every year becuase they shop around and notice that the cheapest supplier from last year is now the dearest.
And there are those that never shop around.
You’d be surprised at the number who don’t.
Anyway, UW seem to have a reasonably good customer retention rate – in the 90% + range.
And they make certain price guarantees – so while they may not be cheapest all the time, they will be close to cheapest.
So, there is much less incentive to change. Also, the package includes telephone and broadband and that commands higher loyalty.
So, to answer Josh’s point’s – Yes, you keep your residual income if you leave. The commission structure described seems pretty accurate, although at the top end of the scale. There isn’t a high turnover of staff, but there aren’t that many distributors who would get 10 customers a week every week.
There is a reason that some distributors do stop bothering to distribute – but I suspect it doesn’t apply to Josh.
There is a reason that some distributors do stop bothering to distribute – but I suspect it doesn’t apply to Josh.
Can you elaborate on this comment please ? Or even explain why you stopped distributing ?
I’ve just started with Utility Warehouse and so far for my 5 customers I have received a £5 Customer Gathering Bonus. Im hoping to get many many more customers this summer, but it proves to be a very difficult task trying to talk someone into joining another provider that are not your family members. Can anyone give me some tips or guidelines to help me out a little?
Much appreciated.
Hi,
This is an interesting post. I’ve been a distributor with Utility Warehouse for about 18 months and have found it a great business to be involved in. Retention is very high, but this depends on the number of services that a customer takes. If they take gas/electric, you’ll find that retention is higher than for the majority of other customers. For customers that combine their energy with telephone and broadband, you’ll probably lose at max 10% of your customers each year, and less if you keep in touch with them regularly.
It’s a good thing to let your customers know that you get paid on them staying as a customer, and that UWDC grows its business by referrals only (ie. no advertising) as this gives your customers/prospects confidence in you. Also reiterate that they contact you if they have a query, not some faceless call centre.
Good luck!
Mark.
A few comments on the above.
First Utility Warehouse distributors are not allowed to advertise on radio, TV or any other national media. All internet advrtising by distributors is also under close scrutiny.
Second, the main point – Utility Warehouse is not in the business of selling gas and electricity – they operate a Discount Club whereby members (not customers) can achieve discounts in various ways against their utiliies bill. (gas, elec, broadband, phones – and hopefully soon water). There are several members who now receive a zero bill or actually have money paid into their account. If you don’t have to pay anything for your utilities why would you switch? On average members are having around £30 per month discounted from their already competitive bills.
The third point is about distributors. Telecom plus plc the FTSE 250 listed parent company promote the UW business through a network marketing business model. The majority of the income of a successful distributor comes from the network of distributors who join their team – income is not dependent on the number of club members an individual distributor gathers but the number their team gather. Now I’ve no doubt that some ignorant peole will start squwaking about ‘pyramid selling’ – well first of all pyramid selling is illegal and a company engaged in it would not be in the FTSE 250, would not have been voted PLC of the year by the Finacial Times and would not be recommended in Which magazine as best in class for all the services it provides. All company sales organisations work on a commission basis – in a car dealership when a front line salesman sells a car, his manager, area manager and regional manager all get a commission but that’s not called ‘pyramid selling’. Network Marketing is a legitimate business model and is used by a surprising number of well known and highly respected companies because it massively cuts overheads allowing prices to be kept as low as possible.
This is great information – I would like to discuss this topic further – Can I link up with someone?
Hi Charles,
Are you already a distributor? If not, then please look at my site (click on my name and there’s an “Earn With Us” button at the bottom of the page).
If you’re already a distributor, then the easiest place to start is to contact your sponsor.
Does this help?
I’m also a UWDC distributor – signed up around two years ago but didn’t really do anything with it for the first year due to other stuff happening.
Been involved with other network marketing companies before and I have to say, UWDC is the BEST I’ve ever come across (and I’ve looked at plenty).
From the distributor’s standpoint, UWDC has huge advantages over other NM companies.
Hi, I run a team of energy advisers for b2b telecoms but wish to break into the residential market for utilities would Telecom plus suit my needs, i.e. sign up customers door to door, Telecome plus look after them so I can get on with introducing more customers? and not have the problems of running a customer service department etc..?
Hi Mick,
T+ could be a good bolt on for you and you’ve outlined some of the advantages already! What part of the UK are you in?
Hi Bri, Scotland.
Would I earn less residual from customers if my reps were members as well ? Or just got them to sign up members for me. I.e. each member they signed up for me was classed as my personal customer?
Hi Mick, not quite sure what you’re asking? If you want to have a chat it will be a lot easier and less confusing! You can email me through my website if you like.
If I sign my reps up as customers will I earn the same or less residual income from their signed up customers?
Or
If they sign up personal customers on my behalf, without them in the loop, would I earn the same or more residual income? than if they were in the loop?
Hi Mick
If you sign up customers yourself you will recieve a higher rate of commission than if your distributors sign them up for you.
However, the ‘bigger picture’ would be that you’d be be better off in the long run by putting them in the loop.
They will be more incentivised to get customers and if they recruit distributors it may balloon properly for you.
The sign up process is easy – just 2 sides of A4 and then you fax it to UW and let them get on with it.
Not sure about door to door rules though.
Alternatively, you could just introduce them to UW and they will do the sign up for you and pass on the majority of the commission with virtually no involvement yourself.
Give me a call and I’ll explain how it works. It’d be a lot easier than trying to do it on here!