Picture a lightbulb popping on above someone’s head. It’s a classic image denoting a good idea, and many utilities are having this exact moment now as digital transformation in billing and payments comes to what is arguably the original connected ecosystem — the utility grid.
Surveying more than 100 billing and payments executives at utility companies sending over 30,000 bills monthly, PYMNTS’ study “The Digital Payments Edge: How Utility Companies Can Succeed In The Digital Payments Revolution,” an ACI Worldwide collaboration, found that 93% of these experts see digitizing as their best bet for revenue growth in the next five years.
How that pans out depends some key variables, according to Andrew Sajeski, vice president of solution consulting at ACI Worldwide. Noting that his own utility company (which shall remain nameless) recently “upgraded” its mobile app — only to remove facial recognition login — he said there’s a fair amount of confusion over the consumer experience in utility bill pay.
“Especially with younger generations, what is their mobile strategy? How are they leveraging that to communicate with their customers, not just from a payments standpoint, but in general?” he said. “Are they letting them know of power outages or meter readings or things of that nature? From a payment standpoint that’s huge, but how are they making it easy?”
Along those lines, important questions utilities need to ask themselves include, “Am I still just doing [automated clearinghouse] and card? Am I bringing in alternative payment methods like PayPal, Apple Pay, Google Pay?” Sajeski said.
Other factors to consider, he added, include whether utilities should leverage digital self-service options in addition to their traditional offerings to help customers who’ve fallen behind on their payments due to the pandemic and the strain of inflation on household budgets. Since they effectively have a captive customer base — few if any markets have competing gas and electricity options — utilities must focus on the experience of captive customers as a matter of efficiency and their Net Promoter Scores.
“It comes back to that customer-first mindset. We know one of the things that motivates utilities is how they rank from a customer satisfaction standpoint,” he said. “Digitization is part of that.”
Research backs him up. According to “The Digital Payments Edge,” 97% of utility billing and payments executives said digitized billing and payments would enhance customer satisfaction.
Get the study: The Digital Payments Edge: How Utility Companies Can Succeed In The Digital Payments Revolution
Powering Better Experience
Among other key findings is that some utilities report a tech deficit internally, where legacy tech stacks and a shortage of technical staff can make progress a slow slog.
Midmarket providers need a digital assist far more than their counterparts serving major metros and entire regions, Sajeski said, and they need to decide which digital path to pursue.
“When you look lower down at the middle market folks who would need more technical teams if they wanted to try and do this themselves, what they need to do is look outside. They need to look to an ACI or to their ERPs [enterprise resource planning vendors]. We work very closely with the ERPs to have integrated solutions.”
Integration takes several forms. Sajeski said some utilities come to ACI for its application programming interfaces (APIs), which are known to be robust and not difficult to add to stacks.
For consumers, he said, “they want to know that you have a full digital offering, especially in something like utility, where people might pay a little bit more attention. My rates, my bill went up this past month. Why? What are the insights that you can offer so they see how did [their utility use] compare to this time last year?”
What comes of this is new forms of self-service that reduce call center costs and increase customer satisfaction — a double-whammy of positive impact that can be unexpected. And it starts with a mobile-first strategy that leverages smart integrations with the ways customers pay already.
“People don’t always want to download an app,” he said. “You can do a lot of communications with the consumer through Apple Pay or the Apple Wallet or Google Pay where you can give them latest information on their bill, you can send them notifications about outages, you can give them options for payment, and they didn’t need to download anything. It’s native.”
See also: Utilities Amped Over Cash Flow Gains From Digitized Bill Payments
Leveraging Digital Self-Service Options to Drive Down Arrearages
In utilities as elsewhere, proper use of data drives decisions that save money and make money.
Platforms like ACI take customer data, divine new usage patterns as work from home and offices trade places, for example, and identify the latest trends to the utility, which has wide-ranging implications.
“Once we have that data, we can present it any way they want it and provide that full experience for the customer. We’re not going to be doing things like helping them with turn-ons and shutoffs, but there’s plenty we can offer to give that digital experience to consumers.”
From the perspective of utility efficiency and associated cost savings, Sajeski said the right self-serve solution could spell a 20% reduction in call center staffing.
Some customers have fallen behind in utility bills over the pandemic, and he said it’s an optimal time for utilities to consider installment payments more along the lines of a digital, self-service experience than traditional payment agreements.
ACI developed a tool called Virtual Collection Agent during the 2008 credit crisis, which Sajeski feels could be put to good use in collecting past due balances in a way that pleases customers.
Noting that human collections agents are trained to interact in helpful ways, he said, “they don’t call with one option. They have a conversation with the customer to try to understand the needs of that customer and give them a series of options to help them get back on track. Our Virtual Collection Agent does the exact same thing.”
“What the utility doesn’t want to do is end up having to charge off any of this stuff because they were never able to collect it,” he said, and that’s where digital is paying off as both cashflow facilitator and customer satisfaction driver.
See also: 55% of Utility Company Executives Say Digitization Is Key to Industry Growth
NEW PYMNTS DATA: THE TRUTH ABOUT BNPL AND STORE CARDS – APRIL 2022
About: Shoppers who have store cards use them for 87% of all eligible purchases — but this doesn’t mean retailers should boot buy now, pay later (BNPL) options from checkout. The Truth About BNPL And Store Cards, a PYMNTS and PayPal collaboration, surveys 2,161 consumers to find out why providing both BNPL and store cards are key to helping merchants maximize conversion.
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