7 Ways aging US Utilities can collect money faster
In our business we come across a wide range of utility profiles; Large, small, electricity, water, gas, and telco. The American market strikes me as a particularly ba
- Payment methods: seems obvious but the more payment methods you can provide the easier it is for your customers to pay. Checks are evil, they need to be manually processed, often travel snail mail, take days to clear.
- Incentives: Incentivize your slow paying customers with special offers for converting to Automatic Payments
- Monthly Billing: Ensure you send out your bills often – quarterly bills are going to be three times as large as monthly bills. Choose billing and metering systems which promote monthly cycles. This can bring forward collection of 1/3 of your quarterly income by 60 days, 1/3 by 30days. Extrapolate over the year and your cash at bank trend will look considerably more predictable and less bumpy. This method also reduces bill shock.
- Email Billing: Every time you contact a customer either inbound or outbound it’s an opportunity to move them to email only billing. Your postage may cost you up to a $1.50 depending on the country and location. This can mean a per customer saving of $18 per customer per year. This is another obvious big big deal in net margin terms. If your customer service team don’t feel good about moving people to online billing incentivize them. look at it this way, in the example above you’ve saved $18 in year one on a customer that may have an average tenure of 4 years depending on demographic that’s over $70 saved- Consider incentives to customer service of a dollar for every customer they cut over – good CSRs will see this as a huge opportunity to increase their take home income and will convert customers over every hour of every day. This is a big win for your business and the team when they see their pay hit the bank account.
- Consider the customer experience of making a payment. Most people put the time consuming tasks to the in-tray or to do list and the simple things they just knock off immediately. Make sure your user can click a button and throw in the fewest keystrokes to complete a payment. Consider capturing bank details for auto pay or pay on 2 way SMS. This is the process of sending a customer an SMS saying “your water bill for $90 is due today reply “Y” to have it automatically drawn from your saved payment settings”. The results will amaze you. Be creative !
- Reminder Automation: Act quickly with your reminder treatments, make it clear that late payment is frowned upon. Be certain that late payers are bombarded the second they are late. Follow up with an SMS and a phone call the day the fall into overdue and they will start paying you on time to avoid the embarrassment of taking your call next time. It still astonishes me the amount of water boards that go through their outstanding customer list once a month and actively withhold reminding certain customers because they are old friends or serve us coffee or is a nice person. Everyone should be reminded that they have not paid their bill.
- Teach customers your bill is one that they pay first and don’t delay.
When I consider the American market place, I continue to be amazed at how many people pay by check and how many utilities have operators sitting in dark rooms processing checks all day. If this is your office, frankly you are part of the problem, it’s time to take a lead, disrupt your status quo and introduce better solutions to your business. Be proactive and start teaching your customers and your management / board that the world has already changed and they need to get on board.
Final note: Customers that are in financial hardship present different challenges, I will post an article on this special class of customer another time.