More Can Equal Less

Driving Cost From Billing, Collections While Improving Customer Relationship

by Bob Guy, CSG Systems

Has this ever happened to you? You’re waiting for a reply to an urgent message you’ve sent, and when it comes, you miss it?

When you do get the message later, you think, “If only they had just (fill in the blank: e-mailed me, called me, sent me a text instead),” and you would have received the message.

Reaching consumers with timely messages about their bills or the utility services you offer is no different. If you choose one-size-fits-all communication, you might be missing the opportunity to better serve customers by getting messages to them how and when they prefer.

The communication channels you offer for billing, collections or other outreach can have a cascading effect on operational costs and customer satisfaction. For example, a company offering only printed communications might drive unnecessary traffic through its call center—where agents are focusing too often on routine billing calls. Another effect is spending too much on postage for mailed communications, which can include other operational cost factors.

Offer customers multiple communication channels. Allowing them to interact with you on their terms can make them more likely to pay bills, pay off delinquent accounts and even receive more service options from you. Payoffs can be tremendous, from collecting payments for outstanding receivables sooner to reducing costs in the call center. It creates more loyal customers.

The bill presentment and payment process will open more options to interact with consumers. While the billing statement is necessary to request and receive payment for your services, it’s also a consistent, monthly handshake with customers. In some cases, a service bill might be the only interaction customers have with you. It’s important to get it right.

The Monthly Bill—Reasons to Offer More Than a Paper Statement

According to a recent Marketing Sherpa study, more than 90 percent of consumers will open a printed transactional communication such as a bill reminder or statement, and upwards of 75 percent will open a transactional e-mail.

The green revolution is everywhere encouraging environmentally responsible tactics such as using less paper and recycling. This can cut a company’s operational expenses effectively while it offers consumers a choice in how they view and pay their bills. On average, about 3 percent of utility consumers receive electronic monthly statements and stop receiving paper statements. This represents consumer desires for multiple bill interactions: how bills are presented and options for payment.

To take advantage of high open-and-read rates for transactional communication across print and electronic mediums, reach out to consumers through custom messaging on statements or outbound e-mail. Follow up with ad inserts or direct mail pieces with personalized landing pages to ensure that key messages are part of your ongoing, monthly billing communication.

Because not all customers want the same experience, using a multichannel strategy can raise your opt-in rates for electronic billing and paper suppression. In addition, offering options that include biller direct and bill consolidation websites, text-to-pay and payment kiosks can encourage customers to opt in and interact more often. In addition, bill consolidation models and solutions directly deliver secure e-statements via e-mail, allowing customers to make payments without going directly to the companies’ websites. The more communications channels offered, the higher consumer adoption rates will rise.

Cutting operating costs is only one reason to drive consumers toward electronic and print channels in combination to interact with their utilities for billing and other transactions.

“Orlando Utility Commission would like more customers to move to electronic billing, however, we found that some customers are hesitant to give up their paper statements,” said Shirley D. Bias, director of customer billing management, Orlando Utilities Commission.

A recent Javelin Strategy & Research report found that nearly one-third of all households in the U.S. still receive at least one statement in both paper and electronic forms. Many of these so-called double dippers receive two forms of billing communication from their utilities. The trend toward electronic billing is not moving as quickly as predicted, and it is up to utilities to provide all the necessary channels that are still demanded by consumers.

When the Check Isn’t in the Mail—The Road to Faster Collections

Another billing type where service providers and consumers benefit from choice of communications channel is collections of past-due bills. Market research repeatedly has shown that mailed delinquency notices aren’t as effective as voice, e-mail and text communication options in helping companies move accounts from delinquent to paid status faster.

To start, know which customers are at greatest risk of defaulting vs. those who are typically late. Also, evaluate how individual or groups of consumers have responded to campaigns encouraging payment. What was the message tone and content used in those efforts? By applying predictive analytics to a customer’s account data, including payment history, service providers can score accounts based on each customer’s likelihood to pay outstanding bills and rank order the customer portfolio by risk. Utilities then can better prioritize efforts to maximize collection resources.

Once you identify high-risk consumers, a multichannel collections and payment reminder campaign can help move consumers toward paid status. Take, for example, the latest Bank of America advertisement campaign. The company has removed the negative connotations associated with receiving a payment reminder or early-stage collection call. Bank of America ads now depict convenience and customer satisfaction, which are associated with receiving a payment reminder via customers’ preferred communication channels. This encourages customers to make payments and creates improved customer experiences.

Leveraging Consumer Attention Beyond Collecting Payments to Effectively Communicate

Once you have multiple communications channels and consumers opting in, the next step is to better leverage those channels. This is done by pushing messages to consumers and allowing them to interact with you.

For example, the arrival of smart grid presents a huge consumer education challenge. Many utility consumers have heard the term smart grid, but ask five people what it means and you’ll get five different answers. And that’s at the conceptual level. What about when the conversation turns to how to read a bill offering more data points obtained from smart meters, how to use energy more efficiently, or how to reduce energy consumption?

Consumers are ready to listen to smart grid information, but their preferences for receiving this information likely will be as variable as the individuals themselves. Some consumers are best reached through monthly statements, but others prefer over-the-phone notifications or electronic communication to their e-mail accounts or even via the Web.

Because roughly 40 percent of utilities have smart grid projects under way, educating consumers will be a priority. In addition to educating consumers about smart grid initiatives, multiple channels will work together to enable consumers to better control their energy usage. Offering energy curtailment alerts and actions across multiple channels beyond the thermostat will be a leap for many consumers. Moving from the thermostat to receiving text messages or voice calls to mobile phones to alert consumers to turn down the air conditioner or give the utility permission to do it if they are not at home will take upfront education and flawless execution on the technology side. Again, the benefits from a customer-satisfaction perspective, as well as a cost-savings perspective, are significant. If consumers can receive more timely energy saving tips or promotions for discounts with energy-saving partners, a utility service provider gains happy consumers while saving operational expenses and boosting revenues.

Smart grid opens up an opportunity to communicate with consumers in new, more meaningful ways. As you educate consumers about this new initiative, also inform them about new ways to receive and pay their billing statements, to take action on overdue accounts and to contact you with customer service concerns. The more channels you offer consumers, the more ways they will elect to interact with you. Expanding communication options increases customer satisfaction levels and curtails operating expenses for utilities across key areas of the business, such as a call center. Utility customers have evolved past the time when a simple bill through the mail would suffice. These customers use a myriad of devices and channels to receive information, including billing statements. Utilities must effectively communicate with customers through multiple channels. This way, consumers will be sure to receive and act upon urgent messages when they’re sent.


Bob Guy is executive director of CSG Systems’ utility practice. He works with utility service providers nationwide to develop strategies and architect solutions designed to provide more customer care options while reducing operational expenses. Reach him at

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