by Penni McLean-Conner
As utilities across the country deploy electronic billing for their customers, they are finding that customers appreciate and value having billing options, while the utility benefits from reduced print and mail costs.
Offering customers options increases their satisfaction with their utility provider. The J.D. Power 2006 electric utility satisfaction survey indicates that 13 percent of a customer’s overall satisfaction is determined by his or her satisfaction with billing and payment services, and 18 percent of a customer’s satisfaction with billing and payment services is determined by satisfaction with the availability of different payment options.
Making e-Billing a success
Electronic billing is becoming more popular with customers. Adoption rates average 2.8 percent, with some utilities achieving adoption rates as high as 4 percent, and many forecasters predict adoption rates will continue to climb. In fact, JupiterResearch forecasts that by 2009, 6.4 billion U.S. bills, 50 percent of the total, will be presented online.
Utilities considering e-billing are generally looking at both electronic bill presentment and payment, giving customers the option of receiving their bill electronically and paying electronically. To achieve success with electronic bill presentment and payment, a definition of success is required and a description of the e-bill presentment and payment offering selection of the features, and promotion of the service. Utilities that are offering e-bill should benchmark their performance against their peers to identify the potential for customer adoption and best practices from a promotional perspective.
A successful e-bill project will have clearly defined objectives, generally focused around the goals of increasing customer satisfaction while reducing costs. From the perspective of customer satisfaction, consider more specific objectives around e-bill adoption rates, number of electronic payment transactions, increase in web traffic, and ensuring that customers have secure access. From the cost perspective, consider objectives around reduction in print and mail costs and reduction in payment processing costs.
The most common options for e-billing are the biller direct and bill consolidator models. With the biller direct model, customers directly access the biller’s website for bill presentment and payment. The bill consolidator model involves the presentment of bill information through a third-party consolidator.
Research indicates that offering both biller direct and consolidator models is the route to take to maximize customer enrollment. In Chartwell’s “Guide to Bill Presentment and Payment 2003,” research showed that 2.8 percent of customers subscribe to online billing. Using a combination of biller direct and bill consolidator can increase customer adoption rates to 4.1 percent.
JupiterResearch forecasts that by 2009, 6.4 billion U.S. bills, 50 percent of the U.S. total, will be presented online.
Here are several functionalities to consider when implementing e-billing:
- Ability of customers to receive bill notification via e-mail
- Flexible payment features like the ability to set up recurring payments, store and pay from different bank accounts and pay multiple accounts with one click
- Secure customer identity and data management with the self-service ability to set and reset passwords
- Ability for customers to link and view multiple accounts
- Access to bill history
- Process payments
- Automatic e-mail communication confirming registration and payments or notifying customers when a payment failed
Communicating to customers about the new e-bill offering is fundamental to customer adoption. Leveraging existing communication channels is the most cost-effective option. Marketing through the website and e-mail messages is a low-cost or no-cost effort. Place a promotion right on the home page, or send out an e-mail with a link to a sample electronic bill.
Using bill inserts and bill messages is another low-cost tool and a natural, as customers are focused on the utility bill at the moment of opening it. Utilities have had great success with placing promotional ads on the back flap of the return payment envelope, which customers see as they are making their payments. Other utilities have used the actual bill envelope to note promotional messages.
Target key customer segments that may have a predisposition to electronic processes. Natural candidates are customers currently visiting your website, while others include those on automatic fund transfer programs or budget billing. Customers on these programs have expressed a desire for simplicity and ease of doing business.
As more and more customers elect to receive and pay bills electronically, utilities that are not yet offering this feature should consider it. Not only does customer satisfaction increase, but costs are reduced.
Penni McLean-Conner is the vice president of customer care at NSTAR, Massachusetts’ largest investor-owned electric and gas utility. McLean-Conner, a registered professional engineer, serves on several industry boards of directors, including the CIS Conference, the Consortium for Energy Efficiency and the Massachusetts Technology Collaborative. Her first book, “Customer Service: Utility Style,” has been published by PennWell Books.