Cost to serve is everything a retailer spends to win, price, bill and support a customer, on top of the energy itself. For commercial and industrial accounts, much of that cost sits in manual work: building quotes, reconciling hedges, fixing billing errors and answering questions about the bill. When that work is done by hand, the cost to serve can outweigh the margin on all but the largest accounts.
Where cost to serve hides
Most of it doesn't appear as a line item. It shows up as analyst time, slow sales cycles and margin that quietly leaks away.
- Quoting. Every complex quote needs an analyst to pull data, update a model and check the result. Pricing teams spend that effort on their biggest accounts, and mid-market opportunities go unquoted or get a standard product.
- Reconciliation. Progressive purchasing and hedged contracts mean matching interval data against multiple purchases at different rates, then calculating overs and unders. Done in spreadsheets, it takes days each cycle.
- Billing handoffs. Rates re-keyed from a pricing model into a billing system create errors, rebills and customer complaints.
- Maintaining the tools. In-house pricing models need developers to keep them running, these salaries could be better used for strategic work.
- Customer queries. When a customer can't see how their price was built, every question becomes a manual investigation.
How Factor reduces cost to serve
Factor is a forecasting-led pricing engine for energy retailers, gentailers and C&I energy businesses. It prices live contracts for customers in two markets, Australia and the UK, and is part of Gentrack. It takes the manual work out of each step above.
- Quotes in seconds, not days. A full forecast-to-price run takes about 10 seconds, so a quote no longer needs an analyst to build a model from scratch.
- Mid-market accounts become worth serving. Margin requirements and commercial rules are applied automatically by segment, so smaller accounts with complex setups, such as batteries or solar, get rigorous pricing at low cost.
- Reconciliation runs itself. Factor reads forward contracts from existing ETRM systems through APIs, collects interval data from metering systems and calculates costs against hedges across all of a customer's sites, including overs and unders.
- Clean data straight to billing. Factor produces structured output with volumes, rates, product attribution and reconciliation adjustments, ready for the billing system without re-keying.
- No in-house pricing build to maintain. Factor is a SaaS pricing engine with three subscription tiers, so the team prices energy instead of maintaining software.
- Every price explained. Each number traces back to the forecasts, rates and rules behind it, which makes customer questions and audits quick to answer.
- Fits your existing systems. Factor is API-first and connects to CRMs, billing systems and data platforms, including a managed package for Salesforce Energy & Utilities Cloud.
Most teams are live in two to four weeks, with full support from the Factor team. You can start with one use case, such as bespoke C&I pricing and add more as the savings are evident.
