A guide to better billing
Chris Cullen rounds up five areas better billing could impact the future of the utilities sector.
Today’s customers are far better informed, and suppliers are under increasing pressure to meet higher expectations when it comes to customer service. Despite this, more than three quarters of customers (77 per cent) reported receiving poor service when it came to billing, a key customer touchpoint, in the past year, according to research Echo recently commissioned.
The implications of this are particularly concerning as we found that one in seven would definitely switch supplier if they had a billing issue, whilst almost half (45 per cent) would seriously consider it.
With that in mind, here are five key points for the utilities market to consider when it comes to billing practices and the handling of any billing issues.
1. How people want their bills
In the smartphone era, it likely won’t come as a surprise to find that more than half (57 per cent) of those we surveyed prefer online billing, with respondents citing convenience, speed, and increased control as their main reasons for this.
With that said, we must also make sure that we don’t forget those customers who remain loyal to the traditional postal bill. Our research revealed that some customers would still prefer a paper bill, and this preference is strongest for lower income families (31 per cent among those earning less than £10k a year). Whilst promoting online billing can be beneficial for utilities companies and their customers alike, by introducing compulsory measures such as charges for paper bills, or even moving services entirely online, companies risk disenchanting up to a quarter of their customer base. Great customer service relies on offering customers choice based on their own unique needs and preferences.
When it comes to the payment journey, two thirds of customers (65 per cent) now prefer automated direct debit arrangements, which for utilities companies increases the chances of receiving payment in full and one time. However, this leaves 35 per cent who clearly like the feeling of control that comes from manual payment. Pushing all customers onto direct debit can actually serve to undermine trust and damage relationships.
It's particularly important to remember that there will never be any “one size fits all” solution when it comes to your customer base, and exercising a degree of flexibility can be hugely beneficial for all parties in the long run. A good example of this is to give customers a choice when it comes to payment, ensuring they are on the best tariff for their own unique needs while continuing to provide the broadest range of options that they could use in the future.
3. Better clarity is a must
For one in four customers, the biggest change to billing they want in future is greater clarity, with 70 per cent saying that bills had actually got more difficult to understand in the past few years, or at best had stayed as complex as they had previously been. Basic steps like simplifying terminology and explaining clearly what terminology means can help, while signposting customers to more in-depth online resources and well-trained contact centre staff can add the extra level of detail and support that customers might need.
Don’t assume customers understand common billing terms – they’re still regularly confused by terms used on bills. “Chargeable value” is one of the worst offenders - baffling three quarters of consumers. Even simpler terms such as account balance baffle almost one in three.
4. Communication is key
Knowing when to initiate communication with your customer base can be tricky, as unwanted contact can be both expensive for the business, and irritating to the customer. Success here comes down to knowing your customer, identifying behaviour patterns and giving customers the option to tailor the alerts they receive.
Pre-bill engagement is set to become increasingly important in future and 30 per cent of customers experience this service already – either as a bill due reminder or advance notice of a higher than normal bill. This leaves two thirds of people who still receive no information before the bill lands on their doorstep. This can not only lead to instances of late payment due to human error (forgetfulness, or mix-ups with other bills), but can also negatively impact the customer’s view of the company itself. Especially if customers find themselves being unexpectedly charged more with no explanation.
Simple steps such as reminding a customer when a bill will be due, what the bill is for, how much they will be charged and ways they can save money, is a proactive approach to customer service which will pay dividends in the long run by boosting customer retention numbers and improving a company’s reputation. This doesn’t have to be expensive; low-cost options such as SMS, email and even social can help achieve this.
5. How does the utilities sector compare?
Water billing hit the headlines late last year, when a report by the Consumer Council of Water revealed that written complaints had risen for over half of water companies in England and Wales, with billing and charges accounting for over three in five of the registered complaints. Whilst in the energy sector, lack of customer trust is a widely debated issue, with billing related errors making the news regularly.
Our research demonstrated that in some sectors where there is the most intense competition for customers (such as telecoms and financial services), one in three customers scored billing as eight out of ten or better. Here, the increased competition created by customers having more choice in terms of their service provider, has led to companies focusing on the customer’s exact needs in order to retain their business.
However, our research found that the water sector, where customers have no choice, scores lower in this regard, with a customer approval score of 7.24. Energy companies, despite operating in a competitive market, are even further behind, with an average approval rating of just 7.08 – barely above the lowest-scoring local authority sector.
Service excellence can, and will, act as a key differentiator, and in order to stay competitive, companies must become more customer-centric. The relatively low scores for energy and water companies within our research should act as a warning for providers: when it comes to billing, a key touchpoint in the customer journey, experiences impact the bottom line. Utilities companies need to understand their customer preferences and frustrations, offer customer choice and keep lines of communication open in order to improve customer satisfaction and company reputation.
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