Digitizing Collections Notices Is Vital To The Future Of Utilities, And Here's Why

By Mia Papanicolaou

Many utilities have done great work of moving customers to digital communications for their bills and payment confirmations. However, an important part of the billing cycle is often left to paper — the collections notices.

This is a missed opportunity to save costs, get payments faster, reduce the debtors' book, and keep the customer experience consistent in terms of communications being sent out.

While paperless initiatives and digital transformation are in the top list of goals for most utilities, many have yet to adopt the philosophy for collection notices sent out for payments that have passed their due date.

Instead, they continue to send out the same paper-based notices they have for decades. In doing so, they’re missing out on a simple change that could have a positive impact on their bottom line.

Research by McKinsey shows that when sent digital collections notices, people are 12 percent more likely to pay in early delinquency than when receiving paper notices, and 30 percent more likely to pay should it reach late delinquency.

The move to digital communications shouldn’t be siloed in terms of the types of communications sent out.

If every other form of communication you have with a customer is digital, why not do the same with collection notices?

Eliminate Complexity

It’s also worth remembering that digitizing collections notices helps make for a much more user-friendly customer experience.

Consistency is key. And if you’re communicating with customers, don’t move to another medium if they’ve missed a payment or even forgotten to pay — which is the case for many customers in early-stage collections. Furthermore, 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.

In fact, research has shown that 97 percent of people open every single text message they receive, and that emails are now opened more regularly on mobile than on desktop.

Compare that with physical mail, where piles of envelopes can quickly stack up. That’s to say nothing of the collection notices that go unseen until it’s too late because the account holder is traveling or because the notice is for a second property and hasn’t been sent to their primary address.

Another benefit of digitizing collection notices — be that using text message, email, or a combination of the two — is that the organization can facilitate immediate payment of the outstanding amount.

Customers can simply click on a link in a text message, or a button in an email, and be taken straight to a payment page.

Customer Experience And The Bottom Line

With the right communication strategy feeding into a good customer experience, people are more likely to pay.

For an organization the size of a typical utility, increasing payments 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 considered a critical part of every utility’s wider customer communication strategy.

Mia Papanicolaou, COO of Striata, heads up the North, Central and South American operations, providing strategy and direction for both internal teams and clients alike. Papanicolaou is a regular speaker on digital customer communication and improving the customer experience. She started her career in South Africa in the media sector before moving to the electronic messaging space, where she served as business director for email marketing eMessageX. She joined Striata in 2006 as Head of Email Marketing. Papanicolaou moved to the UK as Head of Operations in 2010, after which she transferred to the U.S. in 2013 to take up the post of General Manager of the region.