11.12.09Maggie Boys, Senior Associate, Research, E Source

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Residential customers want to give you their money. That's the good news. The bad news is utilities are making it hard for customers to hand it over. Research conducted in 2009 by E Source shows that the payment feature on both utility web sites and interactive voice response score at the bottom of usability ratings. The difficulty in finding or making a payment through the web and interactive voice response (IVR) hinders the use of these self-service channels.

Even though customers have been moving away from mailing their payments since 2004, self-serve bill payment on utility phones and web sites has remained relatively flat over this period. In 2008, 4 percent of residential consumers said they pay their energy bill through their utility's web site, compared to 2 percent in 2004. However, in 2008, 11 percent of consumers indicated that they pay their energy bill through their bank's web site. That percentage was up from 7 percent in 2004. For all other payment methods surveyed, there was no significant change between those years. Why is it that while mail-in payments are falling and those at bank web sites are on the rise, online payments at utility web sites remain essentially flat?

Similar issues are found with IVR payments. E Source 2008 market research found that only 16 percent of survey respondents who had used an IVR, or a mere 3 percent of consumers overall, had used an IVR to pay any monthly household bill. If the self-service on the IVR and web site is supposed to take a burden of routine calls, like making a payment, away from call centers, neither web sites nor IVRs are fulfilling their potential.

In 2009, E Source reviewed the IVRs of 95 utility companies and the web sites of 100 utility companies in the U.S. and Canada. In each of the reviews, we looked at how user-friendly the payment features were. Based on these reviews, we have some ideas about why these two self-service channels are not attracting more users for bill payment, as well as how utilities might save money and increase their customers' satisfaction with this IVR feature.

Although 71 percent of utilities offer callers the ability to make a one-time payment over the phone, "make a payment" features had the worst average usability rating of the 13 features reviewed in E Source's 2009 study. Nearly one-fifth were rated "very poor." The disappointing ratings were despite the fact that the feature was one of the easiest to find on utility IVRs, indicating some unusual problems with the feature. For the web, the story is much the same. Usability scores of one-time payment features averaged a score of 2.6, compared with a 3.3 average for the most usable features.

Common failures

While the IVR and web are two distinct and separate channels, our research indicates that the same underlying reasons undermine the success of self-service payment. Often, issues having to do with the outsourcing of payment services to a third-party provider are a major source of troubles for these two payment features.

Seduce and abandon. Most problematic are systems that lead callers down the garden path toward a payment task and, just when customer think they have arrived, the system tells them to go somewhere else, whether it be a different phone number or web site. Usually, this is because the utility uses a third-party provider to process these payments.

The best systems provide an automatic transfer to any third-party payment agency. Utility companies should not assume that customers will remember to look up a special bill payment number. For consumers, the only value of customer service technologies is added convenience. It's reasonable for customers to expect the convenience of a one-call utility customer service IVR with a payment feature built in.

Online, the transition to the third-party site is automatic but not without its own problems. Reviewers did not appreciate being surprised by third-party payment providers, especially if the page has no resemblance or ties back to the originating utility. Our reviewers had a more positive experience at sites that explained the customer would be directed to a different site.

Fees. Having to pay for the convenience of paying a bill with a credit or debit card is a leading impediment to self-service payment. Our reviewers expressed disbelief when they first saw the convenience fees, some as high as $4.95, to make a payment with a credit card, which was the payment method of choice by those who like to earn reward points or frequent flyer miles. The expectation to pay a bill for free is based on our reviewers' experiences with all of their other service providers.

While paying a fee for credit card payments may be irksome, it is inevitable for many utility customers. When this is the case, best practice is to tell the customer early on if a fee will be assessed and how much. If there's no fee, both the IVR and web site need to give that reassurance before the customer starts the process of bill paying. Otherwise, a customer may spend a lot of time pursuing a payment option only to abandon it several steps into the process because of an unexpected fee.

Conflicting stories. Another major impediment to usability of the payment features is inconsistency between the utility and the payment provider on important matters like whether the customer will have to pay a fee for the convenience, what types of payment are acceptable, and the like.

What is it called? When a customer wants to pay the bill, they think in terms of bill payment, not necessarily in terms of the brand name the utility may have created for the payment option, nor in terms of the name of the third-party provider. However, these names are often used repeatedly without regard to how the customer may perceive them. With names such as EZ Pay, ZipPay, SpeedPay, Bill Matrix, and CheckFree, it is often difficult to determine which one is the option to use. As one web reviewer put it: "The name 'Bill Matrix' had no meaning for me, and was thus confusing." Simple, descriptive names that clearly describe the payment option, such as Pay by Phone or Pay Online resonated best with our reviewers.

Who are you, again? Some less successful bill payment features irritated reviewers by requiring them to enter their account information more than once, first on the utility's IVR or website and then again on the third party provider's. Online, this issue also occurs when a customer who is already logged in to the utility's web site must log back in again to make a payment. This is especially apparent when the utility uses a third-party provider for one-time payments.

Especially egregious are web sites that ask a customer to enter basic personal information as well as banking information in order to make a payment. As one reviewer said, "My account number should have been sufficient for their purposes." Best practice requires the customer to only identify himself once, whether it is through caller authentication or through the customer logging in to the web site. In addition, over the phone, it is best to offer customers more than one way to authenticate themselves -- account number or phone number were the most common ways.

In the "what were they thinking?" category, one utility we encountered required customers to report their payments after they make them on the IVR. The watchword for all IVR and web features should be customer convenience! Reviewers were astonished that this step was required when a hefty "convenience fee" was asked of them, adding insult to injury.

Obviously, there are situations in which a utility's relationship with its third-party provider or billing engine administrator is so bad that it requires customers to call back and notify the utility of what it should know, but that isn't an excuse for inconveniencing customers in this way.

Do it yourself

Accepting payment from customers through self-service channels only benefits the utility if the applications are convenient enough for customers to use them. Many utilities are suffering under the burden of surprisingly inconvenient payment features on IVR and web, especially when they depend on third-party providers.

The remedy for self-service ills is doing it yourself -- that is, by customer service and IT managers' using these applications periodically to pay their own bills. Managers who do so and find themselves saying something like, "Eh, it works -- it's confusing/annoying, but it works" should understand that they just scored their feature's usability as poor. Is poor usability good enough to make your customers want to come back and serve themselves again? Would you?

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