Case study on billing: Tennessee utility cuts disconnects by 70 percent

Jeff Warhol, US Netcom

Telephony technology is changing the way many utilities across the country collect on their overdue accounts and how they communicate with their customers in general.

Through automated phone messaging, billing departments are able to send hundreds of payment reminder messages to their customers–a more immediate and cost-effective reminder than the standard mailed notice. And, depending on the number of phone lines possible, utilities can use telephony technology to notify thousands of customers about planned or unplanned power outages–communication efforts that pay off big in positive public relations. Erwin Utilities, an electric utility serving 9,000 customers in Erwin, Tenn., is one utility reaping the benefits of such a system.

Erwin studies billing

Becky Renfro, customer-billing clerk at Erwin Utilities in Erwin, Tenn., has always looked for the easiest, fastest, and most effective way to get her job done. After using The Collector, an automated telephony product from US Netcom, Renfro believes she has found the key to filling her collections box.

“Revenue came in faster than I had ever seen it,” said Renfro, who has worked at the utility for 31 years. “And, it was so simple and easy; I couldn’t believe it.”

With the help of The Collector Payment Reminder System, Renfro has reduced service disconnects by more than 70 percent, saved the utility thousands of dollars a year in postage costs, and cut as many as 15 hours from her work week now that The Collector has made past-due statements a thing of the past.

“I really can’t say enough about it,” Renfro said.

The Collector uses automated telephony technology to contact dozens to thousands of clients with payment reminder notices automatically by phone. All The Collector requires to operate is a touch-phone. After a simple installation, setting up The Collector to notify customers requires two basic steps: 1) users record a message, which is saved to The Collector 2) users key in or download phone numbers into the system.

The Collector will store up to nine recorded messages and up to 30,000 phone numbers. A four-phone line system will deliver up 200 or more 24-second messages per hour. And if the customer isn’t there to pick up the message, The Collector will leave the message on answering machines. While the default calling period of The Collector is 6 to 9 p.m., users may change this parameter as well as the number of times it attempts to deliver the message.

When a called party or an answering machine answers, The Collector plays the message, hangs up, and continues down the list of phone numbers, delivering the message to each phone number in turn. The Collector stops when 1) all messages have been delivered 2) when the pre-set calling period has expired 3) or when the call list has been deleted.

The results of consistent, automated calling

Over a nine-month period in 2003, Renfro used The Collector to make an average of 560 calls each month to overdue customers. On average, more than 70 percent of those overdue customers responded with payment.

“I highly recommend the Collector because of its ability to save time and money,” Renfro told fellow colleagues at a regional meter reading conference. Renfro has also recommended the product to the accountants of Tennessee Valley Authorities. “It’s like having a personal assistant, and it’s very easy to use. The Collector has helped us stay in better contact with our customers.”

Renfro has experienced how much more effective a phone call can be at collecting payment than a mailed past-due reminder. Before acquiring The Collector, Renfro processed three-part statements and mailed them regularly to customers.

“It’s easy to overlook a statement, but I think a phone call really gets your attention,” Renfro said. “After I used The Collector the first time, the payments flooded in. People called the next day and said they’d be in to pay their bill. For us, it has completely eliminated the need for past-due statements.”

Erwin Utilities has reduced its disconnects by as much as 80 percent over the past three years, now that Renfro has partnered with The Collector. This has saved the utility the cost of a service call, and it has saved the customer the extra charge of getting reconnected when they do pay, Renfro said. “It paid for itself in no time flat probably in three months of using it.”

Now that past-due notices are no longer mailed, Renfro has saved as much as $850 per month in postage costs, not to mention savings on the cost of paper, printing, and processing time. “It would take me anywhere from one to three hours a day to process late statements. Now it takes me just two minutes a day to set up The Collector, and it does the calling for me.”

For those customers who claim they hadn’t received a call, Renfro turns to the detailed call report generated by The Collector, which lists the delivery status of each call. “I’m able to show them the exact time and date we called them, whether they picked it up or their answering machine got it. This report has come in very handy when there’s a dispute of any kind,” Renfro said.

For additional ease in checking the call list, US Netcom technical support created an application for Renfro that lists the customer’s name and account number alongside the phone number.

Renfro is enjoying some other unexpected benefits from the telephony product. When utility workers plan to service certain areas, she uses The Collector to notify particular neighborhoods of planned power outages.

“The phone used to ring like crazy before. When people know ahead of time, it’s wonderful. I don’t think I had one phone call the first time we used it to notify customers of a planned power outage.” Renfro also uses it to notify members of board meetings, she said.

“The system can be used in so many different ways to get messages to different groups to our customers as well as our own staff,” Renfro said. “It’s just a smart way to handle communication.”

Renfro regularly sends out this message to hundreds of overdue customers each month with the help of The Collector:

“Good evening. This is an account courtesy call from Erwin Utilities. Our records indicate that your payment has not reached our office. If you have already made your payment, please disregard this message. You can stop by our office at (location). We’re open Monday through Friday, 8 a.m. to 4:30 p.m., and we have a drop box on the front of our building for your convenience. Thank you for your business.”

Warhol is the marketing manager with US Netcom. For more information on The Collector, contact Terry Sims at 800-695-7788 ext. 1147 or
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