Seasoned expert Gary Sanders has partnered together with MuniBilling to help give readers an in-depth look into the world of Utility Billing Systems.
For today's Ask The Expert blog, we'll focus on The Art and Science of Charging Fees at the Right Time. Gary Sanders takes a deep dive into the dynamics of balancing fee structures to benefit both the customer and business needs.
What are some of the essential fees that you believe every utility should consider implementing?
Every utility should have a late fee to incentivize customers to pay on time, a cut-off or reconnect fee, (although I don't recommend calling it that anymore) to recover the cost of disconnecting customers for non-payment, and a returned check fee to cover the cost and trouble of collecting returned checks.
Other fees I generally recommend, if the utility isn't already charging them, are an application fee to recoup the cost of processing an application for service and a meter reread fee--not so much as a revenue generator, but as a time-saving deterrent.
Based on your recent Utility Fee Survey, to what extent are utilities using different types of fees?
The first three fees I mentioned above are pretty universal, but not so much with the others. Based on the most recent Utility Fee Survey, fewer than half of the respondents are assessing an application fee, and not even 20% are charging a meter reread fee.
Balancing the necessity of fees for business operations with customer satisfaction can be a challenge for utilities. How do you advise companies in this industry to approach this balancing act effectively?
First of all, be sure your staff can effectively communicate the reason for a fee. For example, when asked why there is an application fee, instead of saying, "I don't know, that's a new fee we just started charging", how much more professional does it sound if your customer service staff tells customers, "That's to recover the cost of processing your application, gathering the initial meter reading, and creating your account in our billing system?
Secondly, consider a customer's situation and don't be afraid to occasionally waive a fee. One tip I give utilities is, if a customer complains about being charged a late fee, offer to remove the fee if the customer agrees to sign up for bank drafts. Doing so means the customer will never be late again and that's one more mail or walk-in payment you no longer have to process.
If a company has decided to implement new fees, what steps would you suggest they take to successfully introduce and implement these changes?
As I mentioned above, be sure to train your staff so they can effectively communicate the reason for the fee. It's also helpful to publicize any new fees in advance of their implementation. Put up flyers in your office and post them on your website. And don't forget to publicize it on your social media.
How do you effectively communicate service fees to customers, and what strategies have you found to be successful?
I always recommend posting a schedule of fees on your website. By doing so, when customers complain about a fee, you can direct them to your fee schedule to see that the fee has always been a part of your policy. Also, some utilities find it helpful to provide new customers with a copy of the fee schedule. This way, your customer knows how much it will cost if they pay late or bounce a check.
The 2021 Utility Fee Survey had some very valuable information. How can my utility participate in the next Utility Fee Survey?
That's a great question! The 2023 Utility Survey is going on now and will be for a couple more weeks. If you would like to participate, you can do so by clicking here.
Gary's 40+ years of experience in the industry has granted him valuable knowledge for any billing entity. With the wealth of his knowledge, you can request an Operational Analysis for your organization from him!
You may be wondering, what exactly is an Operational Analysis? Well, it essentially is when Gary looks through ALL of your systems, and interviews your team, to figure out how best you can improve your billing operations.
Here are a few of your organization's systems that Gary will assess:
Service Delivery System
The end goal of this analysis is to figure out how to best save your organization time and money. This could also mean suggesting another company's platform if it's the better fit for YOU.
Gary has hosted his own blog for the past ten years. Some of his more notable credentials are that he has designed, built, implemented, and supported both ERPs and Utility Billing Systems. Thankfully, he's only a hop, skip, and jump away.