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2019 Utility Warehouse Discount Club Review

Utility Warehouse Discount Club

Welcome to my 2019 Utility Warehouse Discount Club review.

This review is based on my own personal experiences as a FORMER Affiliate (2009-10) and as a highly satisfied Customer since 2009 and I aim to answer any questions you may be asking yourself about the Company as either a potential affiliate or customer.

Company Overview

The Utility Warehouse Discount Club is a provider of landline and mobile telephony, broadband, gas and electricity service to UK households and Small & Medium Enterprise (SME) businesses. Additionally, they provide Home and Boiler Insurance to home-owners. They also provide a Cashback Card, backed by Visa, which gives cashback on Customer’s monthly utility bills when used for shopping both in store and online with around 2000 Partner Retailers.

NB: The card can be used Worldwide for purchases with any retailer that accepts Visa, but cash back only applies with the Partner Retailers.

Utility Warehouse is a ‘virtual retailer’ which has no High Street premises and does no advertising. It utilizes a network of around 37,000 self-employed, independent affiliates (known as Distributors) to market its products and services through a Network Marketing (aka Multi-level marketing (MLM)) business model. Affiliates receive commissions on the monthly bills of the Customers they introduce and override commissions on the bills of Customers of the Affiliates in their Team.

Facts And Figures In Brief

Company Name: Utility Warehouse Discount Club
Website: www.utilitywarehouse.co.uk
Address: Network HQ, 508 Edgeware Road, The Hyde, London, NW9 5AB
Telephone: 0333 777 3212
Executive Chairman: The Honourable Charles Wigoder
CEO: Andrew Lindsay MBE (Olympic Gold Medal Winner, Sydney 2008)
Affiliate Membership Price: £25 / £100 / £199.95 Depending on Distributorship
Business Opportunity Rating: 2/10
Customer Satisfaction Rating (My Own): 8.5/10
Trustpilot Rating: 7.8/10 based on Customer reviews as of August 2018
Accolades: Numerous ‘Best Buy’, ‘Best Service Provider and ‘Best Customer Service awards from Which? And Money Wise magazines, and favourable reviews in several national newspapers.

A Brief History

The Company started out in 1996 as Telecom Plus plc, originally selling a product called a ‘Smartbox’, which plugged into a standard British Telecom telephone socket to route Customer’s phone calls through alternative networks to get them at a cheaper rate than through BT. They also sold re-conditioned mobile phones with low cost tariffs.

In 1998, Telecom Plus was acquired by Charles Wigoder, the entrepreneur who had created People’s Phone, the highly successful pioneer virtual mobile network. Wigoder won the Communications category in the London section of UK’s Entrepreneur of The Year awards in 2001.

Under his Leadership, the Company was floated on the London Stock Exchange, has consistently traded in profit and remained debt free, has seen its’ market share increase to over 600,000 Customers, was named Company of The Year at the Quoted Company Awards in 2009, has won Best Value For Money and Best Customer Service awards from Moneywise and the Which? Consumer Association magazine Best Buy and Recommended Provider awards for each of its core services – most recently Broadband in 2018.

Pros And Cons For Affiliates

The Good

PRO #1 Can earn residual income without having to recruit other Affiliates, from their own Customer’s monthly bills.
PRO #2 Essential services which everyone uses.
PRO #3 Large growth potential (within the UK) as the Company has a relatively small market share (less than 2%)
PRO #4 Consistently high Customer satisfaction = excellent retention = income stability.
PRO #5 Affiliates can also hold salaried positions as Trainers and Technical Support Advisers.

The Bad

CON #1 Low commission rates.
CON #2 Can’t earn money straight away (6 multi-service Customers needed to qualify for commissions).
CON #3 Restrictions on how Affiliates can promote the business, relying on ‘Old School’ MLM methods. Online promotion through blogs, etc, requires Company scrutiny as would be expected but charges levied on Affiliates for this are high.
CON #4 Restrictions on other business activities, ie, joining another network or affiliate program can lead to termination even if there is no conflict of interest in regard to products and services.
CON #5 UK based business only with no opportunity for Affiliates to expand globally.
CON #6 Lack of service availability in some areas.
CON #7 Staggering amount of information to learn before approaching potential Customers, requiring attendance at a training event beforehand.

Who Is The Utility Warehouse Discount Club For?

Basically, anybody in the UK who owns a phone, a fridge, a cooker, a kettle, a computer, central heating or a shower!

Customers have the convenience of having all of their essential services (except water) provided by a single supplier and only one bill to pay each month.

Utility Warehouse does not claim to be the cheapest provider all of the time, but it does guarantee that its tariffs will remain in the lower portion of the Market which gives savings ‘across the board’ for multi-service Customers. Customers are able to pick and choose, but the more services one takes, the greater the savings and Utility Warehouse will pay up to £200 in termination charges when moving across from a different supplier.

There is no attempt to lure Customers with eye-catching, cheap, short-term deals which then turn into expensive long term tariffs with complicated contracts. Their pricing is reasonable and consistent and the tariffs easy to understand.

Utility Warehouse will also track a Customer’s service usage and offer them alternative tariffs where savings can be made, unlike other suppliers who place the onus for this on the Customer and are happy for them to continue paying over the odds.

Customers Can Earn Great Cashback Against Their Monthly Bill

The Utility Warehouse Cashback card is not a credit card, debit card or a store card. It is a ‘top up’ card which only works when you have money on it. You can put money onto the card 24/7 either online or via the automated telephone top-up service and you can have an automatic monthly top up of a fixed amount by linking your card to a debit card.

In a way, it is the exact opposite of a credit card since not only are you no charged interest on transactions, you actually earn money on them in the form of cashback!

Utility Warehouse has around 2000 Partner retailers ranging from eateries to jewelers, from hotel chains to supermarkets and DIY stores to Activity Day providers. When the card is used to make in store or online purchases with any of these partners, a percentage of the purchase price ranging from 1% to 11% is deducted from the Customer’s utility bill the following month.

In 2013, we re-fitted our kitchen, bathroom and one of our bedrooms courtesy of Argos and Homebase who are both Cashback partners, and Utility Warehouse credited our account with almost £400, wiping out our utility bills for the next 3 months!

The Cashback Card can be used in any retailer anywhere in the World which accepts Visa whether the Retailer is partnered with Utility Warehouse or not. No cashback will be given if the Retailer is not a cashback partner, but you still have the convenience of being able to use the card anywhere.

If you go on holiday, your card is a very convenient place to put your holiday spending money on, and top up as required and as it is not connected to your bank account, your account will be completely safe if you lose your card.

Utility Warehouse Affiliate Tools And Training

When new Affiliates pay their joining fee, they are sent their business manual with all the T&Cs, along with samples of promotional literature to hand out to prospects, more of which will have to be purchased at the Affiliates own expense once the initial batch is used up.

A replicated affiliate website is also provided. This looks and sounds great but it is identical to every other Affiliate’s website apart from the Affiliate’s bio and a small profile picture.

This means that Affiliates will not be found online unless they pay out a small fortune in Pay Per Click advertising to compete with the fellow Affiliates for the top spot in the search engines.

If you become a Utility Warehouse affiliate, my suggestion to you is that you learn affiliate marketing and build your own personal brand via your own website, linked to your corporate replicated site, where your new customers and affiliates can sign up if you haven’t used the direct approach ‘old school’ marketing methods or shelled out a huge wad of cash on PPC.

I remember the huge restrictions that Utility Warehouse placed its Affiliates over using online marketing. In a way its understandable because its not unknown for Network Marketers to use a little ‘poetic licence’ and Utility Warehouse have to protect the integrity of their brand. Other companies allow it however, be it right or wrong, and I recall Utility Warehouse having a requirement for all Affiliates to submit their own personal online marketing material to Head Office for approval at a cost of an eye watering £500 with no guarantee it would be approved!

TRAINING REQUIREMENTS BEFORE YOU CAN EARN MONEY

New Affiliates are required to attend an induction training shortly after joining before they can qualify for commissions. The training in carried out by experienced affiliates who have reaced leadership positions in the Compensation Plan. Here, new affiliates are taught how to promote Utility Warehouse with the old-school, groan-inducing ‘make a list of everyone you know’, etc, which is the main cause of around 90% of MLM newbies crashing out in their first 3 months.

In my day, the emphasis was entirely on promoting the businesses opportunity rather than the products and services with the constantly repeated mantra ‘Don’t think Customer – think Distributor’ being rammed down your throat. This is logical in so far as if you sign them up initially as a Customer and they choose to become a Distributor at a later date, they can do so under somebody else!

In my humble opinion, that is an awful dis-service to hard-working customer focused affiliates. Technology makes it very easy for a Customer who wishes to become an affiliate some time down the road to be linked directly to the original referring Affiliate. This would prevent unethical practices such as ‘poaching’ by other affiliates and also take away the pressure on affiliates to focus on MLM if they did not wish to do so.

I say that with the conviction of someone who’d had prior experience of Network Marketing and whose enthusiasm had been somewhat dampened by the experience. For me personally, the very attraction of Utility Warehouse was the opportunity to build a residual income from the percentage commission I would earn from Customer’s monthly bills without having to go down the route of ‘herding cats’ trying to build a team of affiliates again.

My Perception Of A Dis-Honest Approach To Prospects

We would be told by our Trainers to approach our ‘contact list’ (the usual friends, family, neighbors, colleagues, the Postman, Milkman, Hairdresser, Uncle Tom Cobbley and all, etc) by asking them to let us show them how to reduce their monthly bills, etc, and then once they’d (usually reluctantly) agreed to let us into their house, we’d be expected to hit them with a MLM business presentation.

I had a major objection to this and I would not do it. I would do what I told my prospects I was going to do and show them how to save money and AFTERWARDS I would inform them that I would receive a commission on their bills if they came on board, and I’d offer to show them how THEY could be the ones earning that commission instead, as a member of my Team.

Some agreed to let me show them how and some weren’t interested. I’m glad to say that my approach was honest from the start and I did nothing to get people to allow me their precious time under false pretences.

To me, that kind of ‘up frontness’ is very important but when I told my Upline that’s what I was doing AND that I was taking ‘No’ for an answer they were not at all happy and basically cut me out for ‘not following the system’, or as I saw it ‘not towing the line’. Que sera sera, and all that!

Support For Distributors

I touched on the ‘support’ I had from my Upline just now. Very pushy people who acted more like corporate Sales Managers than the leaders and mentors they were supposed to be. Maybe I was just unlucky in who I signed up with, but my experience was not unique.

The Corporate support was much better. Within Network HQ there is a group of experienced Affiliates with additional corporate responsibilities whose job it is to help and advise the Affiliate Network with all aspects of the business. I always found them very helpful, knowledgeable, approachable and supportive.

Lack Of Service Availability Can Hamper Affiliates

When I was an affiliate, I lived in rural North Wales, where some services were unavailable. The area where I lived had no mains gas and households used LPG which Utilty Warehouse do not supply. Mobile telephone coverage was also very poor on the network that Utility Warehouse ‘piggy backed’ on and many of the BT exchanges were still using the legacy LLX technology, rather than the more recent LLU technology which meant that affiliates could not offer potential Customers Utility Warehouse’s best deal on landline telephony services.

LLU stands for ‘Local Loop Unbundled’. Basically its the ‘last mile’ of the connection from the BT Exchange to the Customer’s property. When a line is LLU, the Customer’s chosen supplier manages the connection all the way up to their property. LLX lines are only managed up to the BT Exchange, with BT having responsibility for the ‘last mile’, and the charge for that is passed on to Customers by their supplier via their bill.

As Affiliate commissions were paid on a scale according to the number of services the Customer signed up to, these service availability factors would have a detrimental effect on the earnings of Affiliates. If a Customer only took out a single energy service for example, Utility Warehouse would pay zero commission to the Affiliate. That sucked!

So How ‘Independent’ Are Utility Warehouse Affiliates Really?

When you join Utility Warehouse, as with any other MLM company, you are told that you are ‘independent’ and ‘self-employed’ but in reality you are little more than a commission only sales person.

Utility Warehouse will terminate your business if they find out you are involved in any other home based affiliate or network marketing type business, even if there is no clash in terms of products and services. I personally see no reason why a Utility Warehouse affiliate couldn’t also be, for example, an Avon Rep (or any other rep) so long as there was no direct competition between the companies involved. Avon don’t sell telephony and energy services and Utility Warehouse don’t sell cosmetics after all, but hey, I don’t make the rules!

I chose to develop additional income streams and received a rather unpleasant and officious letter from Utility Warehouse beginning with ‘..it has come to our attention….etc’, effectively ‘ordering’ me to end my other associations or have my Distributorship terminated. Since the very reason I’d got involved with this other company was that Utility Warehouse had not lived up to my expectations, I wrote back telling them where to stick it!

Utility Warehouse are by no means the only company that place this sort of restriction on their Affiliates. No company would be able to do this to its corporate employees, so to me its as though these companies feel that they ‘own’ you the moment you sign on the dotted line.

What Does It Cost To Join Utility Warehouse As An Affiliate?

There are 3 ways to join Utility Warehouse as an affiliate, and these are:

  1. Independent Distributor (ID) – £100 (Most common)
  2. Community Fundraiser (CF) – £25
  3. Independent Representative (IR) – £199.95

Let’s look at each of these in turn:

  • Independent Distributors gather their own personal Customers and can also build a team of Distributors if they wish. An ID can earn a one off Customer Gathering Bonus up to £50 depending on the number of services the new Customer takes. After this, IDs are paid an ongoing residual commission based on a percentage of the Customer’s monthly bill. This varies between 2% and 8%, depending again on the number of services taken, but generally averages around £5 per month. Smaller commissions are paid as a percentage of their Team member’s customers, but as the Team grows and its structure develops, rank advancement bonuses are paid, as well as car and travel incentives. Pretty much standard practice in the MLM world.
  • Community Fundraisers are charities or community groups who can raise funds by encouraging their supporters to become Utility Warehouse customers. The commission rate is 5% ongoing and the £25 joining fee is rully refundable if 12 customers are signed up in the first 90 days.
  • Independent Representatives are business owners who can generate an additional income stream by introducing their customers, staff or contacts into Utility Warehouse.

My Final Word On The Utility Warehouse Discount Club

Although this is a 100% reputable company offering a completely legitimate business opportunity, I would give it a wide berth because of the poor commission rates and the stipulations for even for qualifying for the commissions, the restrictions the Company places on its supposedly ‘independent’ affiliate’s other business activities, the over emphasis on MLM and the reluctance of the Network Leaders to support customer-focused affiliates, the negative impact of lack of service availability in some parts of the Country and the fact that although there is plenty of scope for UK wide growth there is no scope to build outside the UK.

Customers are given an incentive to refer people, and this comes in the form of a £10 voucher for evey new customer who joins through them on sign-up and every year on the anniversary. Customers can choose between M&S or Sainsbury’s.

All the new Customer has to do is quote the referring Customer’s account number when they sign up.

At A Glance

Company Name: Utility Warehouse Discount Club
Website: www.utilitywarehouse.co.uk
Address: Network HQ, 508 Edgeware Road, The Hyde, London, NW9 5AB
Telephone: 0333 777 3212
Executive Chairman: The Honourable Charles Wigoder
CEO: Andrew Lindsay MBE (Olympic Gold Medal Winner, Sydney 2008)
Affiliate Membership Price: £25 / £100 / £199.95 Depending on Distributorship

Verdict

Business Opportunity: 2/10
Customer (my own personal rating):
8.5/10

I hope you’ve found this 2019 Utility Warehouse Discount Club review informative.

If you are looking for a business opportunity that is TRULY home based and can generate multiple passive income streams through your computer, or if you are a struggling network marketer looking for new ways to generate leads after exhausting your ‘list’, then please check out my Number 1 recommended product here.

Thanks for stopping by.

I welcome comments and feedback from my readers and if you have any questions at all, please put them in the comments box below and I will do my best to get back to you within 24 hours.

Your friend and mentor

Richard

 

 

 

 

 

 

 

Richard Brennan

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