04.06.11Charles Speidel, VP Market & Business Development, CSG Systems

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The business case for driving consumers to electronic channels is clear; however companies have been unable to significantly increase the adoption of paperless billing services among the majority of their customers. Industry analyst and direct interviews with utilities reveal that less than 10% of utility customers have taken advantage of paperless billing. Most utilities cite three barriers to adoption including privacy concerns, the transition from paper to online record keeping, and adjusting to electronic vs. paper-based notifications. These roadblocks are challenging but can be overcome by executing on three tried and true measures -- 1) educating these consumers on the value, safety and security of paperless billing including the concept of the electronic file cabinet, 2) accurately segmenting and capturing profiling information to reach the right set of consumers with the right messages, and 3) communicating the benefits, which can take several forms including incentives for consumers to make the transition.

CUSTOMER EDUCATION

Going paperless seems simple enough in concept, but when it comes to reviewing and paying bills, many consumers still prefer a paper version to ensure the safety and security of their transaction. It all comes down to making the customer experience simple and easy, while making them feel comfortable enough to make the move. Utilities can address this concern by outlining the online bill paying process and the security features set up to prevent fraud. Introducing the concept of a "digital locker" can also help address privacy concerns. By design a "digital locker" is unique to each customer and contains information about their account and preferences that can only be accessed by the utility. Underscoring the fact that all of the customer's records will be safely stored by the Utility and not shared with any outside party can reassure consumers that eBilling is a practical and secure alternative to paper billing.

Utilities also need to educate consumers on the overall value electronic communications can provide. Paperless initiatives have a number of benefits, most notably cost savings, but they also give the consumer an opportunity to "go green." Plus it helps the Utility to focus on efficiencies which is very important in helping to manage overall energy costs. By sending a bill in an electronic format the customer also has the option to set up their own electronic filing system on their home PC rather than dealing with paper filing cabinets. eBilling specifically provides customers with notifications and alerts for when a bill is due. These built in reminders are extremely valuable as many consumers avoid eBilling offers for fear they will "forget" or "miss" the payment deadline.

With e-communications, consumers also have the opportunity to share their preferences for how they want to be communicated with, via which channel, the frequency of contact and the content they prefer to see. As people are faced with paper junk mail and email spam, the option to control the amount and type of communications from a particular company is especially empowering.

In turn such communications also allow the Utility to provide customers with the ability to gain immediate access to additional information that would be of interest to them. For example, by embedding links within the e-mail customers can access a more detailed view of their actual usage by day or hour, or learn more about how they can take steps towards improving their overall energy efficiency resulting in a lower bill.

PERSONALIZATION AND CUSTOMER SEGMENTATION

This type of personalization is critical to not only ensuring customers continue to "opt in" for electronic communications, but increasing their overall satisfaction level. Each customer has individual preferences and needs. For Utilities to be more successful with their e-channels, they need to more deeply understand each customer and how they prefer to be communicated with.

For example, the inbox doesn't just live on a PC. Smartphones and the mobile web haven't hindered the power of email communication, but rather bolstered its importance. By determining if customers are mobile, email communication can also be tailored for mobile devices to further personalize the consumers' experience.

Once you've determined the preferred method of communication with the customer, the next step is make sure you capture that information and determine what to communicate. Understanding the history of interaction with the customer and their overall activity translates into a more comprehensive view of that customer, a more satisfied customer and a deeper, more profitable opportunity. Has the customer participated in rebate programs in the past? Have they been an early adopter of new services? Have they paid their bills on time? Where you proactive about alerting them on outages or budget overruns and did they engage? Gathering such critical data, segmenting customer "types", and personalizing the experience enables the Utility to turn good customers into great ones.

CUSTOMER INCENTIVES

The Chartwell Group recently noted that if utilities can get half their customers on electronic bill statements and 75% of them paying electronically, they'll save millions of dollars. That's a great incentive to get Utility companies moving towards electronic channels, but what about the customer? They too need a reason to change their behavior and move towards services such as paperless billing.

Of the Utility companies that have successfully moved customers towards electronic channels, many have found the greatest rate of adoption comes from recognizing that not all customers are the same and each responds differently to incentives. Some will respond to a "green" initiative or lowering their "carbon footprint" while others just want to be conscientious about their energy use. Some may like the convenience related to their life style or appreciate budget billing features to better manage costs. Financial incentives are also a powerful motivator as people often respond to the opportunity to participate in a promotional sweepstakes. Some or all of these motivators may be effective, but only if the utility makes the transition easy and actionable. It also needs to be sustainable so that the customer does not go back to paper bills otherwise the desired cost savings for the utility cannot be achieved.

By educating customers on the benefits of electronic communications and providing incentives to participate, utility companies can not only introduce services such as paperless billing, but develop more engaging, profitable, and satisfied customers.

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