Why utilities need to digitize their collections notices
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- Jul 8, 2019 12:15 pm GMT
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While paperless initiatives top the list of digital transformation goals for most utilities, many have yet to adopt this philosophy for collection notices.
Utilities are still sending out the same paper-based collection notices they have for decades, missing out on a simple change that could save costs, get payments faster and reduce the debtors' book.
Research by Mckinsey shows that people are 12% more likely to pay in early delinquency when sent digital collections notices, instead of paper notices, and 30% more likely to pay in the event of late delinquency.
If every other form of communication sent to a customer is digital, why not do the same with collection notices?
The move to digital communications should incorporate all types of organizational communications sent to customers.
Digitizing collections notices will result in a much more consistent customer experience when all other communication is also digital.
Bills have been the priority digital communication for many years, so it makes no sense to send a paper notice to these paperless customers if they’ve missed a payment or even forgotten to pay - which is the case for many customers in early stage collections.
Also worth noting that, if you send your collection notice via text or email, it’s almost guaranteed to land on a device that the customer has on them at all times,unlike physical mail, which goes to their physical residence.
Then consider the collection notices that go unseen because the account holder is either traveling or they were mailed to a different residential address.
Another benefit of digitizing collection notices, whether by text message, email, or a combination of the two, is that the immediate payment of the outstanding amount can easily be facilitated.
Customers can simply click on a link in a text message, or a button in an email and be directed to a payment page.
Customer experience and the bottom line
For an organization the size of a typical utility, collecting payments faster from early and late delinquents can represent a significant amount of revenue. Importantly, this is revenue that can be recouped without having to engage the services of a debt-collection agency.
It’s obvious then that digitizing collections notices is no longer a nice-to-have, but should be a critical part of every utility’s wider customer communication strategy.