by Michelle Flint, CheckFree, and Terry Manley, Madison Gas and Electric Co.
Every interaction with consumers is an opportunity to strengthen relationships and maximize business profitability. Every bill received, payment made, or visit to your website should be utilized as a valuable “marketplace” to promote strategic adoption of the online channel; beginning with online payment and ultimately resulting in paperless billing.
Online bill payments adoption is now entering the mainstream, with at least three-fourths of online households paying at least one bill online, according to recent studies. It seems more consumers now recognize the benefits of online bill payment, among them the convenience of paying bills anytime and anyplace; the cash and time savings associated reducing clutter and no longer having to buy stamps; enhanced financial control to schedule payments on the due date; and fewer concerns regarding identity fraud.
While many utility customers pay bills online, the industry’s challenge is to encourage consumers to take the next step by receiving bills electronically, turning off the mailed paper bill entirely. On average, only 10 percent of consumers actually do paperless billing. At the same time, the industry has a compelling reason for increasing adoption — that is, a growing consciousness for the impacts we are making on the environment.
Paperless billing certainly has ample room for growth. Comprehensive approaches to planning and executing e-bill marketing strategies can significantly increase e-bill activations. Partnering with CheckFree, Madison Gas & Electric’s (MGE) efforts followed such a strategy. The Wisconsin-based utility company implemented a multi-pronged approach to transition many of its consumers to paperless billing. As a result, MGE was able to get 31 percent of its 135,000 eligible residential customers enrolled, which amounts to almost 42,000 total e-bill participants.
MGE entered the campaign with a goal of a 3 percent adoption rate increase in the first year and to increase it 2 percent annually for the next three years. The company’s ability to increase volumes rested on three tactics:
1. Targeted marketing;
2. Strong environmental messaging; and
3. Distributing e-bills beyond mge.com such as at financial institutions.
Before moving forward with its targeted marketing campaign, MGE and CheckFree worked with local research firms who found that women between the ages of 24 and 49 were more likely to respond positively to electronic billing and payment messaging. Accordingly, MGE developed targeted TV advertising promoting the mge.com e-bill service.
The research also showed that college students were likely to adopt electronic billing solutions. Such consumers are highly wired and completely comfortable with new technology. MGE targeted this group through advertisements in university newspapers and through popular online media outlets.
While reaching out to specific demographics was successful, MGE found that an overarching campaign to all their customers proved equally rewarding. MGE marketed the benefits of e-bills consistently in its mailed “bill package,” consisting of the envelope, return envelope, statement and inserts. Delivering this consistent message through billing inserts contributed to increased adoption rates.
MGE also found success by educating consumers on the positive environmental impact of paperless billing as a way to drive e-bill adoption. Helping the utility in their efforts was the fact that environmental awareness and sentiment have become more mainstream and education about the environmental impacts of switching to paperless billing is readily available.
Finally, MGE was able to grow adoption by delivering e-bills via CheckFree’s network of financial institutions, which moved the effort beyond offering access to billing information at mge.com. MGE was able to meet consumers at their point of preference so customers could consolidate all their finances at one central banking location.
The tactics helped MGE achieve its 31 percent electronic billing adoption rate and surpass annual goals. By embarking on a paper suppression campaign to educate consumers about the benefits of online bill presentment and payment, and to encourage them to stop receiving paper bills, the program resulted in:
* Reduced costs associated with paper bill handling and payment.
* A reduction in payment processing costs and a faster receipt of funds by MGE.
* The homepage link to MGE’s “Online Bill Payment” page is the top requested link on the company’s Web site.
With the increase in e-billing adoption, MGE was able to promote the intangible by increasing the public’s perception of the company as an environmentally responsible community partner. MGE proactively communicated that if all of their customers paid their bill online, more than 50 tons of paper could be saved per year.
With these initiatives, MGE was able to help consumers undergo a successful transition from paper bills to electronic billing. Even though adoption of electronic billing has been challenging for the utility industry, through a combination of targeted marketing, strong environmental messaging, and delivery of e-bills through both biller and banking channels, MGE has demonstrated a successful model for growing electronic bill presentment.
Michelle Flint is vice president and general manager for the e-bill business line within the internet banking and electronic payments division of CheckFree, now part of Fiserv. Flint is responsible for the overall strategic direction and business unit operations that enable clients to meet key business objectives and optimize the on-line channel through the facilitation of bill delivery and payment products and services. Prior to joining CheckFree in 1998, Flint spent 10 years within the banking and credit card industry in key management positions with Global Payments, First Data Resources and Bank South.
Terry Manley is responsible for customer communications at Madison Gas and Electric Co., the utility that provides natural gas and electric service in south-central and western Wisconsin. He’s lived in the world of advertising and promotion for more than 30 years, almost 20 of them at MGE. He leads teams that develop and implement communication campaigns for many of MGE’s nationally recognized programs, including electronic bill payment. Terry has a B.S. in marketing/advertising from Indiana University and is a member of the University of Wisconsin E-Business Consortium, a university-industry initiative that offers companies opportunities to share, explore and learn best practices in e-business.