How Data Can Ease the COVID Billpay Crisis for Utilities & Their Customers
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- May 22, 2020 9:07 pm GMT
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Utility companies face an unprecedented economic situation with COVID-19. Record numbers of jobless customers won’t be able pay their monthly bills, which means utilities need to get proactive. Luckily, putting an effective plan in place is easier than you might think.
As the economic effects of COVID-19 continue to unfold, more customers than ever find themselves suddenly vulnerable to missing payments, accruing late fees, carrying high balances and, potentially, having their service terminated. Fortunately, these kinds of penalties are on hold while the pandemic remains at high threat.
But for utility companies--subject to regulation, struggling despite their size and capacity--every penny counts when it comes to recouping lost revenue. Making up for all that money at some later date may sound like an expensive, perhaps even impossible, mission.
Yet we know that strategic, timely outreach, based on targeted, predictive analytics, is the clearest, most efficient path forward to helping both customers and utilities to stay afloat throughout these uncertain times.
A proactive, data-driven plan gets customers enrolled in and engaged with all the support services utilities offer. Enrollment, in turn, ensures that as many bills as possible get paid, so that utilities remain strong.
To achieve this, utilities need one major tool--something that most already have: customer data. We recommend putting your customer data to its best, highest use by following these three steps:
1. Identify Which of your Customers is Most At Risk
Utility companies hold the power to identify who is most at risk of economic hardship as a result of the coronavirus crisis. They can do this by analyzing their customers’ payment history. A careful review of such data will determine who, among your customers, is:
A) most immediately at risk, like a single, young mother raising a child with a disability;
B) who is most likely to stay solvent throughout this crisis, like a married couple both working in tech; and
C) who is newly at risk, like a Millennial who has paid their bill consistently over the past several years but mysteriously missed April 2020’s payment.
Newly at Risk
Analysis of customer data in one U.S. region comparing current payments with the past several years worth reveals a 10 percent increase in customers who had never missed a utility payment before but suddenly couldn’t pay in April 2020.
That 10 percent spike may not sound terribly alarming at first (and it could indicate that government stimulus checks and unemployment compensation are working). But even a small percentage of balances carried over to next month could mean tens of millions of dollars in potentially lost revenue for utilities if the trend continues.
So keep an eye on May, June and July’s customer payment behavior as compared to previous years: we expect utilities to see a continued uptick in the number of customers who will miss a payment for the first time, making it all the more urgent that at-risk customers get the help they need before they go deeper and deeper into debt.
Further analysis we’ve conducted shows that those who were already vulnerable before COVID-19 (i.e., the single mom) are worse off now, even as states begin to reopen and some people get back to work. Hourly wage workers have had their hours cut. Parents, especially ones like our single mother, continue to struggle with the gap in available childcare as they are expected to return to work.
What’s more concerning is that this already vulnerable group’s economic standing will likely worsen in the coming months. As Time Magazine explains in its May 1, 2020 article, “Wages Seized. Bank Accounts Frozen. The Poor Are Getting Poorer as Creditors Pursue Debts:” “The CARES Act has paused federal student loan debt payments and payments on federally-backed mortgages, and various cities and states have suspended evictions. But few states have stopped creditors from moving ahead with wage garnishments, repossessions, and attachments (one-time seizures of bank accounts).”
For people who were already living paycheck to paycheck, barely scraping by, these penalties could put them over the edge, rendering them unable to recover.
Once you have a handle on who is most at risk, it’s time to decide how best to communicate with them and determine what types of information will be most relevant.
2. Optimize Your Engagement Strategies
You likely have customers who love using your online platform to pay bills, or your mobile app to learn about weather-related outages. But many of the people you serve might never engage with you, digitally or otherwise. It’s important to understand why, so that, in dire circumstances such as a pandemic, you can reach them with the services they’ll need.
Higher engagement, as we know, reflects customer satisfaction. And two-way engagement ensures as many payments as possible get collected. But low engagement is a persistent concern for many utility companies, especially these days when customer centricity is everything.
To understand why your customers are or are not engaging with your company and its programs, we suggest asking some basic questions to inform how you might interact with them next:
Does this customer have a computer in their home?
Do they prefer to pay bills via the postal service, the good old-fashioned way?
Do they have a bank account that would allow them to pay with direct debit?
Do they only use a smartphone instead of a landline?
Do they never check their email?
Do they immediately toss snail mailers into the recycling bin?
Do they get their news from printed newspapers, TV, Facebook or Twitter?
Have they shared their most up-to-date phone number with you?
Are they just too busy with work and raising a family to connect with you?
Do they even know you offer tools like payment plans or budget billing?
Are they also juggling a mortgage payment, childcare expenses, credit card or college loan debt?
Have they ever needed energy assistance before?
Are they too proud to ask for help?
Data analysis, enhancement and integration can help you answer these questions, or at least allow you to infer answers based on distinct engagement patterns as you view them over time.
This lets you fill in a more vivid picture of your customers, and once you do that, you hold the key to understanding which methods of communication, as well as what types of messaging, will work best for different customers--especially those who need to enroll in assistance programs or get onto payment plans immediately.
The Perks of Going Proactive
Rather than taking a costly, inefficient, spray-and-pray approach to catching folks’ attention, targeted, data-driven, proactive plans for engagement offer several benefits:
They let you pick and choose who receives news of crisis grants, disconnection moratoria, payment plans, assistance funding, energy efficiency, etc.
They allow you to deliver urgent news through the proper channels so that the right customers are most likely to engage with it (i.e., knowing whether to send information via snail mail, email, text alert, billboard, Facebook ad or through a community partner, like a church, school or local food pantry).
They save your company money (i.e., advertising dollars don’t get wasted on customers who tend to toss snail mailers into the trash without a glance, or on folks who rent their homes and have no control over the fact that heat escapes through their walls).
If analyzing household-level data sounds intimidating, utilities can take a simpler approach to engagement that’s still quite effective. They can zoom out above individuals and investigate whole neighborhoods, Census tracts or even counties, using publicly available data.
Researching, for instance, where mass layoffs are taking place, or where high numbers of people have been infected with COVID-19, and comparing that with overall demographic and employment statistics for those areas, can inform what types of messaging you ought to share with the customers who live there.
Making the most of community partnerships (churches, schools, food pantries, etc.) tells you where customers-in-need most frequently visit. Through conversations with staff on the ground there, you may discover that posting simple flyers on bulletin boards will get the word out more quickly than a postcard would. Or asking social service workers, who have a trusted rapport with the local community, to mention energy assistance programs to visitors might generate higher enrollment in those programs than an expensive digital campaign could.
But don't discount the power of digital. More Americans rely on and engage with text messaging and mobile apps than ever before. Especially now, when COVID has prevented in-person screenings for program enrollment, a digital platform that guides customers through an application can be a literal lifeline.
3. Offer Tools to Help Customers Over the Long Term
It feels impossible to look into the future with any assurance that normalcy could ever resume. But what we know for sure is that there will come a time when late payment forgiveness and shut-off moratoria will end. When that happens, a lot of people will not be able to pay their bills--perhaps not for a long time after they’ve returned to work.
Utilities, thankfully, can work to prevent them from proceeding through the dunning process into the future. Payment plans, budget billing programs and energy assistance give customers more control over their bills and more consistency with what’s due.
Energy Efficiency Matches
Data can reveal households that are good matches for receiving information regarding energy efficiency, weatherization techniques or energy audits; all of which would help customers save on costs far into the future. First-time and long-time homeowners and many commercial partners fall into this category.
But generating buy-in for energy efficiency programs among low-income property owners and landlords of cheaply-constructed rental units should be a top priority. We know that educating landlords and providing access to the tools and resources they need to better insulate and weatherize will ultimately help them improve their property values and lower tenant consumption. In the process, higher efficiency helps vulnerable tenants by lowering costs--and potentially improving their overall health.
The National Institutes of Health confirm this, citing a 2008 energy insecurity study that states: “...children in moderately and severely energy insecure homes are more prone to food insecurity, hospitalizations, poorer health ratings, and developmental concerns than children in ‘energy secure’ homes.”
Data's Role in Workforce Development
Many utilities offer educational programs that train workers to operate in the field. PG&E’s PowerPathway, for example, recruits and trains a diverse workforce, including women and veterans, to service its territory through an eight-week program that’s offered in partnership with community organizations and educators.
The Center for Energy Workforce Development, or CEWD, is an independent, not-for-profit organization, and is the only national program that exists to recruit and train a diverse labor force for the U.S. energy industry. In their 2018 State of the Energy Workforce report, they describe today’s workers as “younger, transitory, more tech savvy, [and] less likely to build a career with one company.” This means finding tomorrow’s technicians and engaging with them effectively for recruitment is essential, and thankfully it can be done with the help of data tools.
Your territory’s customer data can tell you which households have workers living in them who might be suitable for your training program. Those households could and should be targeted with materials as a first step in allowing you to build a labor force from your own backyard.
We know that payment assistance programs are wonderfully useful interventions that keep people afloat through rough times, and we do recommend getting as many eligible customers enrolled as possible through all the channels available at this time. But if we want to do the real work of uplifting vulnerable communities in a way that’s sustainable over the long term, providing access to technology, skills, and ultimately, good-paying jobs through programs like PowerPathway, CEWD and so many other programs, workforce training is the best way to ensure lasting, socioeconomic well-being.
These are just some of the ways data can be leveraged to ease the COVID crisis. As this tenuous situation unfolds, we'll be sure to share further insights on how utilities can put data to its best, highest use: help those at risk.