The intersection of payments and customer satisfaction: more options improve experience
- Aug 2, 2022 6:09 pm GMT
There's no question that the utility sector has been sluggish about innovating to provide excellent digital customer experiences. Though most companies have begun prioritizing their digital capabilities, growth remains slow. According to recent research from ACI Worldwide, despite the fact that 53% of billers surveyed can accept and process all digital payment methods, only 12% actually do. Long known as an industry averse to risk, key trends are forcing utility companies to rethink the digital experience. As is true for almost all industries, from traditional institutions to digital disruptors, utilities are now directly compared against best-in-class online providers like Instacart, Amazon, etc., driving a need to provide easier, more intuitive customer experiences.
Until recently, a single online payment option was acceptable for utility companies, but today’s providers stand to gain critical benefits by enabling convenient self-service options and increasing customer engagement. This year’s J.D. Power 2022 U.S. Utility Digital Experience study found that a lack of innovation across customer engagement channels in utilities is occurring at the expense of customer satisfaction.
To deliver the experience that utility customers want, organizations must understand their customers' habits around payments and motivators for on-time payments. Accurate insights into preferences could mean the difference between receiving consistent bill payments and not receiving payments at all. It could even mean customer attrition in some cases.
How payments improve customer satisfaction
Nobody enjoys paying bills, but increasing convenient self-service check-out options has tangible benefits for both the customer and the biller. As more customers adopt automated payments, employees previously tied up with customer service requests can focus on more satisfying and higher priority projects, reducing burnout and fatigue. For customers, automated payment reminders prove vital for decreasing late payments:
- Proprietary research in 2020 found that 60% of people said yes when asked if they have ever forgotten to submit a payment on time, resulting in late or missed payments.
- In 2021, that number was cut in half—only 30% of customers had paid late. Notably, 84% of these respondents received automated reminders via the channel of their choice.
This data speaks for itself, demonstrating that targeted payment reminders are a valuable tool for decreasing late and delinquent payments.
Before upgrading its technology, the Lockhart Power Company relied on antiquated payment processing capabilities, leading to various challenges, including:
- A poor user experience driven by limited payment options
- Lack of self-service functionality which increased staff workloads
- The absence of e-payment options led to slower collections
- Sensitive payment information remained susceptible to unauthorized access
Lockhart needed an innovative digital payment platform to address these issues and improve its approach to payment processing. After identifying and implementing a solution to address the payment-related problems, adoption was swift: 10% in year one, 19% in year two, and as of 2021, the company had achieved a 182% increase in e-payment adoption.
Contributing to these results included enhanced user experience related directly to improved self-service options and collections efficiencies. This increase in e-adoption and omnichannel payment methods are consistent with proprietary research that found that 80% of payers prefer to make payments on digital channels citing convenience as the top reason (43%), followed by the flexibility to pay whenever and wherever they choose (19%).
Improving revenue with frictionless payments
The concept of friction is often used to describe touchpoints along the payment route that cause unnecessary challenges. Points of friction are frustrating and can also be a significant barrier to the adoption of self-service options like online or automated payments. To effectively conserve time and resources, billing organizations need to capitalize on opportunities that result in efficiency, and identifying and eliminating friction points prove mission-critical for success. Below are two examples of eliminating friction and increasing customer experience.
1. Simplifying the online payment process. While the most popular method for paying online is via computer (43%), mobile payments are not far behind (35%). An omnichannel approach to the online payments process provides customers with the same experience regardless of where and how they want to pay. Providing a variety of payment options is important but true value comes from simple and intuitive experiences.
Take, for example, logging in to an account. As the first step of the process, logging in must be easy, or you’ll lose your customer right here. If customers hit login walls, they’re unlikely to see the payment through, and the opportunity to collect revenue is gone, leading to more unnecessary spending. Frustrated customers will call or visit your office, wasting time and resources due to friction. Ditching login walls and other friction points are worth the effort.
2. Offering paperless billing options. Customers only have so much time and patience, especially when it comes to an unpleasant task like paying a bill. Suppose options like paperless billing are not promoted clearly and often. In that case, it’s unlikely customers will enroll, forfeiting an opportunity to increase on-time payments, provide an exceptional experience, and reduce print and mailing costs. Furnishing a clear path for self-service enrollment options pays off: include QR codes or web addresses on physical bills and ensure enrollment routes are obvious on the company’s website and along the payment route (i.e., payment screens, confirmation screens). Not only should it be easy to find where to enroll, but the process should be quick and painless and begin immediately.
Achieving billing nirvana
While each organization is unique, some aspects of the payments process correspond across industries. For instance, most companies would likely agree that in a perfect world, billing and collection would include:
- Customers making payments on time every collection cycle, decreasing the volume of late and delinquent payments
- Fewer phone calls or in-person visits to make payments or ask questions about the billing and payment process
- Eliminating manual processes that monopolize staff time and budget, like sending paper bills or reconciling books
It’s easier than ever for consumers to get things done whenever and wherever they want. Convenient self-service check-out options are key for satisfying today’s customers who expect effortless functionality regardless of the task. Self-service eliminates manual tasks on the utilities' end and satisfies customer demand, bringing the industry one step closer to achieving “billing nirvana.”
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