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Utilities: It’s Time to Put Your Arrears Behind You

Its Time to Put Your Arrears Behind You

As the economic crisis caused by the COVID-19 pandemic left many utilities customers financially insecure and unable to pay their bills, states across the country issued unprecedented moratoriums on utility shutoffs. But, as the pandemic continues, many states are beginning to lift those moratoriums, leaving customers responsible for paying back the $40+ billion in debt they owe to their utilities billers.

And while utilities companies have doubled down on customer-centric programs over the past decade or so, they face a crisis of their own in terms of acknowledging customers’ sensitive financial situations while still collecting late payments. That said, utilities will only succeed in collecting overdue payments if they are able to implement efficient ways to inform customers about their options and help them navigate arrears management programs, while also recognizing the hardships of the past year — a feat that may be accomplished with a few steps:

Acknowledge the human side of the issue.

Utility companies are accustomed to sending bills and having customers pay them. But COVID-19 has impeded some customers’ abilities to do so, with 28.2 percent of Americans reporting decreased income during this time, and nearly 15 percent saying the pandemic led them to miss bill payments, according to the recent ACI Speedpay Pulse. As people are faced with prioritizing which bills to pay, utilities don’t always come out on top of their list. Often, the consequences associated with missing a payment for other major bills such as mortgage (foreclosure), rent (eviction), cars (repossession) and credit cards (increased interest) are seen as more detrimental than that of not paying a utility bill, especially when there is a moratorium in place.

Because of that, utilities should keep customers’ concerns at the forefront and shift towards more sensitive communications that show an understanding of these concerns. Doing so will ensure that billers are acknowledging these uncommon times while offering solutions that make customers’ bill prioritization easier.

Spark a culture shift.

With the state of today’s customers in mind, utilities must adjust operations in order to develop a next-level relationship with customers — this starts with a culture shift in the organization. It’s all about anticipating customers’ needs and finding a way to address them in order to meet financial requirements.

For instance, as many customers continue to struggle financially, they may feel more comfortable sharing their personal financial concerns or addressing past due bills with an automated system rather than over the phone with a live agent. Utilities should be sure to offer digital options that improve the customer experience.

Additionally, in tough times, the traditional 30-day billing cycle may not be feasible, especially for customers who are faced with prioritizing which bills to pay each month. In these instances, utility companies may consider reevaluating the billing cycle or providing more flexible options that better coincide with customers’ ability to pay off their debt.

Embrace new technology.

To truly achieve a customer-centric company culture that works towards collections management, utilities must consider adopting technology that will help them streamline their operations while providing excellent customer service. Currently, arrears management in the utilities industry fails 60 percent of the time, on average — a failure rate that will only be made worse by the trend of utilities loosening their credit policies. Utility companies need other options in their toolkit to manage this growing debt crisis.

Utilities have the ability to reverse their arrears management failure rate by leveraging automated solutions that benefit both the needs of the company and the customer. Instead of relying on an inflexible, one size fits all program, the ACI Virtual Collection Agent™ (VCA) is a much smarter way to provide a more personalized, solutions-oriented approach to helping billers manage their debt configurability and performance data, and present the right offer to the right customer every time. VCA also offers real-time billing cycles and information, while always maintaining a next-level customer service experience. Offering self-service tailored programs that are flexible enough for your diverse customer base is crucial.

The pandemic has been a catalyst for changes in many industries in order to adapt to customers’ needs — and utilities is no exception. With the more than $40 billion owed, utility companies can hope to collect these payments by showing a clear understanding and sympathy of customers’ unique situations (and in doing so, creating a more customer-centric culture), as well as implementing new technologies that help do the job.

Interested in learning more about ACI’s Virtual Collection Agent? Learn more here.