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Stream Energy And Deregulation

Since the start of 2002, the state of Texas has been operating its electrical utilities under a mandate by the state legislature to deregulate the electricity market and enable most residents to choose the company that will supple their energy. The reasoning behind the mandate is to allow a free competitive market to set prices and levels of service instead of relying on electrical monopolies. Under the law, minimum prices were set for the established companies to create a level playing field. New companies were permitted to charge lower prices in order to compete and build a business base. Since the deregulation began, the previously established monopolies have been able to maintain their hold on 70% of the market. A few new companies have emerged, however, including Stream Energy.

New Guy In Town

Operating only since 2005, Stream Energy has established a fresh kind of marketing to build a customer base. Instead of spending money on television commercials or other kinds of traditional advertising, Stream Energy uses a person-to-person network of associates to sell its services to friends, relatives and other contacts. In order to work this way, Stream Energy created Ignite, its marketing company.

Under the auspices of Ignite, Stream Energy recruits associates, independent contractors, to contact people they know and invite them to business presentation. These presentations are held weekly at more than 80 venues in Texas to explain the way the company provides electrical services to homes and businesses.

When new customers sign up to receive services, the associates that originally contacted them receive a portion of their bill payments. They also receive fees based on the number of new customers and associates that they help generate.

The independent associates have their own business plans. They can use the resources offered by Stream Energy to start their own website offering information and actively recruiting customers and new associates.

They also save on their own energy bills. More than 50,000 associates are now working for Stream Energy to drum up business. The company even sponsors a program that allows charitable organizations to act in the role of an associate to raise funds. They can also invite prospective customers to business presentations and develop web sites.

They receive the same payment for every bill paid by customers they recruit each month. This fresh approach to marketing has worked well for Stream Energy in its competition with long-established energy providers.

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