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Postage and paper price increases push more utilities to go digital with payments

Posted to Questline in the Customer Care Group
image credit: Questline - iStock-1175429167
Esham Ahmed's picture
Marketing Automation Manager Questline

Experienced Digital Marketing Strategist with over eight years experience developing and driving marketing initiatives as well as managing digital project builds.

  • Member since 2022
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  • Jun 20, 2022
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Inflation has caused price increase across all aspects of our lives. Energy utilities are even feeling the pinch when it comes to mailing printed paper bills.

According to PCI Group, a provider of print and mail services that works with utilities, reports that freight shortages, pandemic-related mill closures, rising fuel costs and increased demand for tissue and other paper products have all led to higher prices for print and mail operations.

Based on a market report, all grades of paper are rising in cost with wood pulp averaging $250 per ton — up 25% from previous years. In fact, Nicholas Meade, Senior Economist for the Pricing and Purchasing Service at IHS Markit, has reportedly seen a 30-40% increase in the prices for pulp and raw material of paper since just last summer.

If that wasn’t enough to deal with, the increasing cost of postage to mail paper bills to customers has made the issue even more palpable among all utility companies.

The postage price change, an average increase of $0.04 per send, will take effect on July 10, only 11 months after the last price increase. From $0.55(2021) to $0.58 and now $0.60 (2022 Summer), that is a 9% increase in the past year.

The cost of postage will continue to rise in the coming years, according to Postmaster General Louis DeJoy. Americans should get used to “uncomfortable” postage rate increases as the U.S. Postal Service seeks to become self-sufficient, DeJoy said in May at a Board of Governors meeting, Fortune reported.

“I believe we have been severely damaged by at least 10 years of a defective pricing model which cannot be satisfied by one or two annual price increases, especially in this inflationary environment,” DeJoy added.

Questline Digital has found that the annual cost for most utilities to print and mail paper bills is $6 to $9 per customer. If costs continue to rise, even by $0.05 more per send, a utility that has 750,000 customers could see an added cost of $450,000 each year.

Fortunately, there is an alternative to this skyrocketing expense – replace paper bills with e-bills.

Not only does this switch help cut costs, going paperless is what customers want. According to Fiserv’s Eighth Annual Consumer Billing Household Survey, an impressive 68% of paperless consumers acknowledge increased satisfaction with their biller when they receive electronic statements.

Additionally, eMarketer shares that approximately 3 in 4 adults in the US and Canada across all generations will switch at least one bill to paperless payment in the next year. Millennials are leading the trend—with 87% pivoting to pay at least one bill digitally.

With no sign of inflation rates decreasing anytime soon and COIVD trends becoming the norm, now is the time for utilities to act. Companies that know who, among the people they serve, are most willing to convert to paperless and why, have the power to build customer satisfaction and save a lot of money.

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Questline is a marketing and technology agency that builds engaging experiences throughout the utility customer journey, boosting program participation and overall satisfaction.
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