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Utility Bill Payment Systems: What Customers Did You Forget?

We spent time with many utility companies at EMACS, Utility Payments and Northeast Utilities Credit & Collections conferences this fall. You told us about the importance of raising eBilling adoption, integrating mobile bill payment with other channels and streamlining electronic bill payment systems, but the topic we heard the most was meeting customers where they want to be met. One size does not fit all customers when it comes to billing & payment preferences, especially those customers who have become delinquent and gone into collections.

ePayer Landscape of Customer Preferences

Most utilities recognize that some customers seek convenience first and foremost (Convenience Seekers), while other customers are willing to invest the time to build an eBilling relationship (Relationship Builders). But because you also have Payment Avoiders and they have different needs, does your bill payment system afford you the ability to provide a unique customer experience to those that need it?

Who Are Payment Avoiders?

Payment Avoiders are those people who are casually or habitually late with their payments and incur penalties and fees with their accounts. Many are delinquent and must work with the utility to get their accounts back in good standing. They value low-conflict experiences. 15% of customers are Payment Avoiders at a typical utility, but this ranges from 2% to 40%, according to research firm Aite Group.

High Cost of Old Approach to Collections  
The way utilities have typically collected late payments is costly to the utility and can damage the customer relationship. This group is expensive to serve, as they account for a disproportionate share of the incoming phone calls and rolling trucks to shut off service.

Utilities recognize that customers like to pay their bills on the web, but when it comes to delinquent customers, it seems that some have forgotten customers’ preferences for online self-service. When customers become delinquent they usually begin receiving phone calls from collectors, sometimes at very inopportune moments, which has the potential to damage the customer relationship. Those utilities who do accept payment arrangements online have been limited in their ability to deploy collection strategies tailored to different customer scenarios.

Benefits of Web-Based Collections
When utilities recognize customers’ preferences for resolving their delinquency on the web, they collect more delinquent debt. One of the largest organizations in the country deployed a robust debt collection website that emulated the intelligence and interactions of their best collection agent and found that 45% of website visitors had not been contacted in the past 180 days. The site enabled consumers to apply for and receive special repayment offers based on the organization’s specific collection strategies and performance data. An integrated bill payment system that recognizes if a customer is a Relationship Builder or a Payment Avoider when they log in and automatically route them to a user experience tailored to their situation has been proven to reduce gross write-offs by 10%.

When a bill payment system addresses all of the customer preferences, it will collect more delinquent debt, satisfy more customers and increase consumer adoption of low cost electronic channels.

Utility Bill Payment Systems: What Customers Did You Forget? by Phil Spradlin

Payments Expert

ACI Worldwide powers electronic payments for financial institutions, retailers and processors around the world with its broad and integrated suite of electronic payment software.