Keep running into the same problem with prospective clients. They see the total amount on their bill but when I explain demand charges based on highest 15-minute peak, eyes glaze over. Property manager in Tampa said I dont care about demand or consumption, I just care about the total number at the bottom. How do you explain demand charges to non-technical clients?
How to explain demand charges to clients who only understand kWh
Nancy ? I use the highway speed analogy. Total kWh is like total miles driven in a month. Demand is the fastest speed you hit at any point. The utility charges for both ? how far you drove AND your peak speed. Even if you only went 100 mph for 15 minutes, your insurance company would care. Clients get it immediately.
I use a water pipe analogy. Consumption is how much water you use monthly. Demand is the pipe size needed to deliver water at peak times. The utility builds infrastructure for your peak and demand charges pay for that capacity. A factory using the same total kWh as an office but concentrating it in 8 hours needs bigger infrastructure and pays higher demand charges.
These are helpful. The water pipe analogy might be my go-to. Key realization is I need to stop explaining technical details and start explaining financial impact. Nobody needs to understand 15-minute intervals to understand they might be overpaying.
I disagree with dumbing it down too much. When clients dont understand demand charges they cant understand the value of what youre doing. I spend 20 minutes with a whiteboard walking through their actual bill line by line. Some eyes glaze over but the ones who engage become long-term clients who refer others. The ones who just want a lower bottom line are more likely one-and-done.
Virginia makes a fair point. Theres a balance. I split the difference ? first meeting is the simple analogy to get them interested. If they engage, second meeting is detailed bill walkthrough with their actual numbers. In Tucson most TEP clients are small commercial and need the simple version first or they wont sit through the detailed version.
Im a CPA by training and I explain it in financial terms. Demand charges are like a minimum payment on a credit card ? youre paying for capacity the utility reserves based on your peak usage whether you use it daily or not. The ratchet is like an annual fee set by your highest spending month. My Syracuse clients respond well to financial analogies.