How leading Brokers make the most of SME energy contract renewal potential

Energy contract renewals present a rich pipeline of opportunity for brokers, and managed effectively help to establish long-standing relationships with customers not to mention a healthy proportion of annual revenue. 

Whether you’re an established broker or still finding your feet, our experience and data from over 25 years of energy aggregation shows that there are some clear, easy wins for capitalising on this opportunity. 

We’ll be taking a look at how to handle high-consumption renewals in a future post. In this article, we’re focusing on SME energy contracts and the best practice behaviours and pre-sales checks undertaken by brokers consistently achieving above average renewal rates. 

But first, let’s explore just how big the opportunity is, and what you need to know about the renewal process itself… 

Contract Renewals: A rich pipeline of business opportunity 

When managed effectively, brokers should be aiming to renew around two-thirds of their customers every year.

When working with OnlineDIRECT, our “Ways of Working” quality standards state that Brokers should seek to work renewals and achieve a renewal rate of a minimum of 40% – 75% live rate. 

Making the most of market trends and volatility 

For both gas and electricity contracts (across all suppliers) renewals generally fall around the months of April and October – coinciding with the start of the Summer and Winter trading periods. 

But with budget certainty so important for businesses – especially in such volatile markets as we currently find ourselves – securing energy rates as early as possible helps to avoid any financial surprises due to unexpected market rises. It also removes the risk of falling into out-of-contract rates. 

At OnlineDIRECT we help brokers navigate the market and secure 1,000s of contracts for customers every month by: 

• Identifying the best solution for each individual case 
• Providing market knowledge to assist with the best procurement strategy, and  
• Influencing suppliers to offer best products and rates available 

The most successful brokers in our network are proactive in renewing – ensuring direct supplier teams don’t get the renewal business before they do.  Our data suggests that on average renewal sales happen ~65-days before the current contract is due to end.

Contract Renewal and Termination Notices 

Micro businesses no longer need to provide a termination notice to end fixed-term contracts and have the right to terminate their contracts at any time before the end of the fixed term, without facing undue barriers or penalties. 

Ofgem mandates that suppliers notify micro-business consumers in writing about the approaching end of their fixed-term contracts. 

Sourcing renewal rates for your customers more than 3-months in advance of their current contract end date increases the likelihood of you securing the renewal rather than the supplier’s direct team. 

Prohibition of automatic rollovers 

Before entering into a contract, suppliers must clearly communicate the principal terms to micro-business consumers. This includes key details such as: 

charges and fees, duration of the contract, and conditions for termination. 

 Suppliers are prohibited from automatically rolling over micro-business consumers into new fixed-term contracts without explicit consent. This measure is designed to prevent consumers from being locked into unfavourable terms without their knowledge. 

Consideration factors when renewing SME energy contracts 

Regardless of when you reach out to customers to renew their energy contracts, it’s important to understand their budget, and to be realistic about what can be achieved in the prevailing market conditions – utilising your expertise and knowledge to paint the picture for them. (And don’t forget, our team is here for you to utilise our expertise and knowledge, too!) 

Speaking to your customers in advance of their renewal dates will help you understand their needs, the options they are mostly likely to want to review, and whether a like-for-like renewal is likely to be the best option. 

Factors to consider when renewing business energy contracts include: 

• Customer experience – How satisfied is the customer with the level of service, billing, and support from their current supplier?
• Fit for purpose – Are new products available (from the same or other suppliers) that may be a better fit?
• Contract duration – would a long- or short-term contract be best?
• Payment terms – does the customer prefer or need to pay by BACS or Direct Debit? Would they prefer to be on a variable or fixed price?
• Energy consumption and/or usage patterns – has this changed/be likely to change in the next 12/24/36 months? Has their TCR banding changed?
• Environmental sustainability – Do they need to switch to a supplier that is certified in Green energy as part of their contractual agreements?  Is the customer off-setting their energy consumption with energy generation? (e.g. have they installed/considering installing Solar Panels?)

Staying with the same supplier versus switching at renewal 

Once you understand the customer’s requirements, you can start to look at whether renewing with the same supplier or switching to a new one is likely to present the best option.

Our Beat the Market reports can help you find the best like-for-like deal for your customer. We currently send out this report to Brokers each Thursday, to coincide with when most suppliers’ prices are available.

Over 12,500 Beat the Market emails were sent to brokers in 2024, resulting in over £5million of savings for customers. 

(Already working with us, but not receiving Beat the Market reports? Get in touch) 

Switching energy supplier at renewal

While there are many benefits to renewing with the same supplier, receiving a full quote from multiple suppliers will give your customer a more informed choice regarding prices available across the market.  

As with any contract, it’s worth checking that you are presenting the product(s) that are the best fit for your customer’s current needs and requirements. This is especially the case if the business is nearing high-consumption (500,000kWh/year) where bespoke tenders or even flex procurement may present a better option. 

When renewing with the same supplier, we do see a marginally higher renewal and live rate – but as mentioned above, this isn’t always best for the customer. If their requirements have changed in any way, it always pays to check the market. 

Same-Supplier renewal rate – 51%

Switch renewal rate – 47%

7 contract renewal habits of high-performing brokers 

Although there is never a “perfect” time to renew an energy contract, there are undoubtedly windows of opportunities that Brokers can capitalise on. It’s about understanding your customers’ needs and finding the best option for them in light of prevailing market conditions. 

The Brokers in our network that have the greatest renewal rate success share common 7 common habits: 

1. Be engaged
   Always have a reason to hold a conversation with your customer – by offering advice, solutions and sharing industry knowledge – enabling you to engage, stay close, and can demonstrate value for your offering.
2. Be proactive
   Utilise renewal reporting to engage with customers at the right time – getting ahead of the game and competition.
3. Manage expectations
   Set the scene on the initial contract sign, and agree a window to look at their renewal, this will increase the likelihood of engagement at the renewal time, making the process both agreeable and efficient.
4. Stay informed
   Use market insights (for example our daily Market Report) to utilise and monitor market trends accordingly. This may affect your decision on when to attack the renewal or advise the customer to drive their engagement.
5. Showcase knowledge
   Ensure you have knowledge of all suppliers and the range of products available – from fully fixed, pass-through and even flex markets – and whether your customer qualifies for any government schemes/funding, so you can offer the best solution to match your customers’ individual requirements.
6. Go beyond energy
   By supplying customers with a range of additional products and services outside of the typical gas and electric procurement (such as water, waste and sustainability solutions), you provide greater value to the customer by streamlining their broader utilities procurement and management.
7. Lean on us
   We’re more than just an energy aggregator, we’re an extension of your brokerage, providing a range of back-office services to help gather information, pricing, comparison reports, bespoke needs you may have and more. Our affiliate Partnerships team even handle all contract renewal opportunities for some brokerages – leaving them to focus on higher value bespoke tenders. 

Using Beat the Market, Brokers achieved over £5m worth of savings for energy customers in 2024 

Increasing energy contract renewal acceptance rates 

Good habits are a great starting point when it comes to sourcing and quoting customers at renewal.  But before any new contract will be accepted, your need to ensure that your customer is actually in a position where their current supplier will allow for the switch to take place. 

Gone are the days where renewals do not get credit checked. Suppliers over the years have become more debt focused and this means tighter restrictions. In fact, energy suppliers will generally block switching if there is any debt on the account. 

One of the biggest reasons we see debt building on an account is the result of the customer cancelling the direct debit (DD) payment when the contract is first singed. Payment schedules are often set up early, and if the customer cancels the supplier is unable to take payment.

Regular check-ins with customers to ensure their payments are up-to-date and DDs are in place (where applicable) mitigates the chance of bills going unpaid, helps to build trust, and also ensures they are in a good place to act if a good renewal deal becomes available.

If customers are struggling to pay their bills for whatever reason, early communication with the supplier is always a good idea. And if you need support handling these conversations, or anything else to do with SME contracts, our Broker Support Team is on hand to help where they can.

Pre-Sales support for SME energy contracts 

Regardless of whether your customer is thinking of switching or staying with the same supplier at renewal, we always recommend utilising our Pre-Sales broker support function to understand if there are likely to be any blockers.  

This specialist team can source information and provide a range of checks that will help improve the likelihood of your renewal being accepted including (soft) credit checks and meter checks, and provide reports on accounts that are in debt for some suppliers. 

If you’re not already working with us, you can find out more about joining us by contacting our New Business Team.