Filling the void
Setting up a new tenancy doesn’t have to be a hassle, says Richard Reed, utility management firms will not only handle the process for you… they will pay you for the privilege.
Utility management companies have offered this service to letting agencies for some time, bundling utilities into one package for peace of mind and taking care of all the admin. The scope of the products keeps growing. Where the focus was on gas, electricity and water, payments such as council tax and broadband are often now included, too.
So how does the utility management process work? The journey typically starts during the void period between tenancies. The agent signs up with a provider, who then takes on responsibility for many, if not all, the regular bills at properties as and when they become vacant.
Some providers work through the agent’s own branding, focusing primarily on the void period, while others make their role more obvious and continue to manage the new tenant’s utility needs on an ongoing basis.
The Negotiator talked to key utility management players to see how their offerings vary and what new products are in the pipeline.
Ittria
Canadian entrepreneur PJ Darling bought the company now known as Ittria four years ago and has transformed it. One of his innovations is to offer a profit guarantee, giving letting agents a fixed amount of revenue every month from the utilities the company signs up.
“They go to the website, put in how many properties they’ve got under management, what services they want, and it comes up with a number – guaranteed revenue and guaranteed savings,” he says. “That number is exactly what they get paid every single month, every year.”
“The commission we can generate is significant. We didn’t want to get into a bunfight as to who pays how much commission, so we just guarantee an amount because we know we do a better job, and that seems really compelling right now.”
Agents go to the website, input properties under management and choose services It comes up with a guaranteed revenue and savings. That is exactly what they are paid every month. PJ Darling, Ittria.
“We have a list of preferred suppliers, we work with them because we like them, they have strong balance sheets and offer good customer service.
A tenant is under no legal obligation to stay with a supplier in a void period. “The tenant receives an email from us using the agent’s branding providing all the meter readings, saying who the existing supplier is, and contact details for the council and the water company, so they have this information before they move in,” he says.
As well as fuels, water and broadband, Ittria also notifies the local council and is aiming to offer insurance soon, while the jewel in its crown is the free tenant referencing service.
The company has also just launched a void bill management service, which analyses every bill generated during the void period to ensure they are accurate, based on past meter readings, and informs the utility if they are not.
Despite Coronavirus, the company has made a decision to keep up the same level of revenue to agents for now. “We said, listen we know you’re not going to be sending us any data in the next two or three months but we are still going to keep sending you the same revenue. It’s a little help for agents and for us it’s a little bit of a loss leader – at some point the market will get back into full swing.”
Just Move In
Just Move In, a utilities provider, is focused on an ethical offering. It deals only with companies offering 100 per cent renewable electricity and is a certified B Corporation. Businesses signing up for ‘B Corps’ are legally required to consider the impact of their decisions on their workers, customers, suppliers, the community and the environment.
Just Move In arranges the basic utilities for tenants on behalf of letting agents, offering broadband, council tax, insurance (FCA regulated), removals and cleaning. “Every service someone takes we pass some of that back to our partners,” says co-founder Ross Nichols.
“We want someone to get the same price they would if they went online themselves – agents have to be confident the customer is getting a great deal.” However, the company will only recommend products that sit within the top 10 per cent of pricing. This may sound counter-intuitive, but it takes the view that if something is too cheap it’s usually got poor customer service or ethical energy credentials, or changing tariffs. He says the Just Move In could generate much more revenue as a business, but its ethical stance has enabled it to work with agencies such as Strutt Parker, Knight Frank and Carter Jonas.
Setting up is easy, we receive the person’s name, address and moving dates. When the agency logs in they automatically see all the information and all the suppliers. Ross Nichols, Just Move In.
“Setting up is easy, they just tell us the move is happening and we manage everything else,” he says.
“They can just log on to the portal and check everything. We receive the name of the person moving, the property address and moving dates, and all that comes onto our system. Every time the agency logs in they will see all the information and all the suppliers automatically.”
Just Move In offers a commission of between £5 and £15 per utility or service, depending on the volume of business.
One Utility Bill
One Utility Bill, a university start-up five years ago, now employs 40 people. Managing bills in shared student digs can be a nightmare and that’s where founders Chris Dawson (right) and Dale Knight saw their opportunity. With VC funding from Northstar Ventures, it is a remarkable success story.
They extend their market from student lets to high-end rentals, a hugely successful leap, offering packages including broadband and TV licences.
“It’s different to other propositions for agents. We have to get our customers a right and fair deal because we have to manage it on an ongoing basis,” says Dawson.
“We do what all utility registration platforms do – register the utility then inform the incumbent supplier that the new tenant has moved in and is now responsible. We tell the new tenant who the suppliers are, what their choices are and offer the opportunity to sign up to our service that bundles everything together.
Not all energy providers are the same in terms of the sophistication of their tech system and their ability to adapt and customise. Chris Dawson, One Utlity Bill.
“We sit between the suppliers and the customers so if a customer signs up to our service they pay us on a monthly basis, we provide all the customer service so they never need to talk to the utility again, they just speak to us.”
One Utility Bill offers two products for letting agents, Notify and ubundle. With Notify the agents don’t need to have any ongoing involvement, and speaks volumes about time savings involved – the most popular offering.
Everyone wins – the tenant wins by splitting bills; the landlord wins as the properties tend to be in better condition as the tenants use more energy and there is less damp and mildew; the agent wins because they earn additional revenue by providing a service.
However roughly 10 per cent of agents prefers a more hands-on approach and chooses ubundle, which offers the opportunity of an ongoing revenue stream by upselling One Utility Bill’s bundles. “It’s a significant revenue generator, particularly in the student market,” says Dawson.
“Everybody wins – tenant wins because they are splitting their bills, which are automatically included in the rent, they don’t have to sort anything out; the landlord wins because their properties tend to be in better condition because the customers use more energy and there is less damp and mildew, and the agent wins because they earn additional revenue by providing a service their customers want.”
One Utility Bill works exclusively with Octopus. The logic is that firstly its electricity is 100 per cent renewable, secondly Octopus’s technology focus allows deep integration with One Utility Bill’s own software, automating processes, reducing costs, which can be passed on to the customer.
“Not all energy providers are the same in terms of the sophistication of their tech system and their ability to adapt and customise. Octopus enables us to offer 100 per cent renewable energy and offer a fair price to our customers,” explains Dawson. The ongoing relationship with tenants means One Utility Bill is highly focused on providing good customer service.
“That’s where we are different our interests are aligned with letting agents’ interests. We have to deliver a good service because we hear about It if we don’t.”
One Utility Bill has 350-400 agents on its books, and pays a commission between £10-£30 per lead, regardless of whether a sale is made.
Spark Energy/OVO
Leading utilities supplier Spark Energy has recently been taken over by OVO Group, but customers will see no change to the service it’s offered for 10 years.
There will be new opportunities for Spark customers such as a 100 per cent renewable energy tariff, a range of additional home services and new digital innovations that support the rental sector.
OVO has also launched Tili, a free digital home-move assistant that agents can offer tenants and will earn them revenue – Tili won a DADI Award in 2019 for Best Consumer Product or Service.
Tili’s Commercial Director Ian Crowther says, “Tili’s benefits are immediately noticeable, with property professionals quickly reducing the time spent managing customers’ council tax and water authority admin – a lifeline for time-stretched agents.”
Tili’s integrated digital communications seamlessly notify end-users about the key progresses in their home-move set-up, all in real time.
Tili’s benefits are immediately noticeable, with agents quickly reducing the time they spend managing customers’ council tax and water authority admin – a lifeline for time-stretched agents. Ian Crowther, Tili.
“We’ve helped over 130,000 people move home, walking users through a quick digital journey to select a great energy provider and ‘phone and broadband packages and television. Agents earn revenue when a customer uses the platform – partners collectively earn £4 million in commission since Tili launched, it’s a win-win.”
Utilita
If you want peace of mind knowing that somebody is looking after the bills, Utilita is certainly worth considering. An energy provider, rather than a management company, it deals direct with landlords and letting agents, installing and maintaining an ever-growing network of smart meters. Even better, there is no standing charge, so when a property is empty during the void period, no costs are incurred.
Historically Utilita has focused on pre-payment meters, but it also provides standard credit smart meters, too.
Louise Walsh, Utilita’s Director of Sales Operations, says the stigma once attached to pre-payment meters has gone, partly because topping up is easily done online. There is also £15 emergency credit, if needed, and ‘friendly credit’ which means there is no disconnect between 2pm in the afternoon and 10am in the morning, or over weekends and bank holidays.
“Ten years ago, four out of five prepayment meters were there because of historic debt issues but what we find now is people actually quite like them because they can see what energy they are using,” she says.
Ten years ago, four out of five prepayment meters were there because of historic debt issues but now people actually quite like them because they can see what energy they are using. Louise Walsh, Utilita.
Letting agents can also take comfort from the fact that they will have a dedicated account manager and business development manager. “They will always know who they are speaking to and they will manage the whole thing from start to finish,” adds Louise.
Utilita is aware of the competition and is looking to bundle other products in the near future. “We are looking at being able to incorporate everything in a ‘split the bill’ type scenario through our online portal,” she says.
Virgin Media
Virgin Media offers a commission to all agents who are recommending its broadband products.
It takes roughly one minute to submit a referral lead to Virgin’s dedicated UK call centre team, who will then contact the tenant and take care of the rest.
Every agent has access to a secure portal where they can track the current status of the leads they have submitted.
“We reward both the agency’s staff who have submitted the lead and we also reward the business for providing all successful referrals,” says Jed Topping, Business Development Executive at Virgin Media.
“We also have a dedicated field team who will provide not only ongoing support and training, but they’ll ensure you’re part of the brand and included in our marketing campaigns, says Jed.
We reward the member of the agency’s staff who submitted the lead to us – and we also reward the business for providing all the referrals that are successful. Jed Topping, Virgin Media.
These have previously included intersting goodies like food hampers, pick-and-mix sweet displays as well as prizes to keep our partners happy.”
The supply and management of utilities in the home has been transformed in the last few years – saving agents and their clients time, energy and worries – the choice is yours!
