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Writer's pictureBill Petrie

Make Sure You Know What You're Selling

It's not what you think it is.


When moving into a new residence, some items must be completed before a house feels like a home:


  • Contacting the city for water and sewage service.

  • Ensuring electricity is up and running.

  • Changing your address with the postal service


In most places, these errands are relatively easy because there is one service provider for each utility listed.


Texas, as you may know, isn't like most places.


Let me be clear: I love Texas. It's the state where I grew up and went to college, and even though I haven't lived in Texas since 1998, the place I still refer to as "home." I share this to explain why I'm about to rant a little on my homeland.


Along with about a dozen other states, Texas has a "deregulated energy market." As you might surmise by the name, that means customers are allowed to choose their energy supplier. Essentially, the selected energy supplier sets various plan terms and features and will bill you for the electricity you consume each month. As a supporter of a free market society, a big part of me loves it when companies compete against each other, as it generally levels the playing field and avoids monopolies.


In Texas, there are 135 active REPs or "Retail Energy Providers" for residents to choose from. On the surface, that seems like overwhelming overkill. It's almost as if Texas is trying to be the state's Cheesecake Factory of energy delivery, but I digress. As you might imagine, these REPs have very targeted marketing efforts to boost their client base and, by proxy, their sales. Here's what I find fascinating: not one of these REPs knows what they are really selling.


To a fault, each REP focuses its messaging on one thing: price. Some offer a lower kilowatt (kWh) rate, others offer "free" electricity between 9:00 PM and 7:00 AM, and others extol the benefits of two free days of electricity every week. Regardless of how you slice it, the messaging is about price and price alone. In my opinion, they aren't selling what the consumer really wants to buy.


You might remember when several of the REPs experienced a power crisis in February 2021. For almost a week, more than 4.5 million homes and businesses were without power, and at least 246 people lost their lives. While electricity is a commodity, it's also a necessity.


On the surface, I understand the focus on cost savings as a marketing message because there's no variance: one form of electricity doesn't taste better, offer faster cooling or heating, or even make lightbulbs brighter. Electricity either works or it doesn't. That's why selling based on cost simply doesn't speak to what truly matters to the consumer: reliability. Of my friends who weathered (pun intended) the massive outage in 2021, not a single one would choose to save $0.005 per kWh over a reliable grid that can handle extreme weather events.


The same applies in the branded merchandise space. So many distributors focus on selling the lowest-cost product rather than what really matters to the end user: effective marketing that moves the target audience. You're not selling a power bank; you're selling connectivity. You're not selling Bluetooth speakers; you're delivering a musical billboard that will broadcast a message for years to come. You're not producing t-shirts; you're creating a keepsake reminding people of a particular event. When branded merchandise is positioned in this manner, your clients will be happy to pay a bit more for reliable advertising.


When it's hot and swampy out, people don't care about the cost – they only care that the electricity is working so they can live comfortably. When a company needs to move an audience to action, price is secondary to a marketing vehicle that truly helps achieve stated goals.


Know what you're selling.

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