5 ways to make your utility bill clear as mud

As a member of the American Water Works Association group on LinkedIn, a thread asking what can be improved or help people better understand their utility bills caught my attention. That made me stop and think, which in turn led to a newsletter idea!

Here are five suggestions I have of things not to do if you want your utility bill to be informative and customer friendly…

Show water usage in non-meaningful units

Many utilities read meters and bill in hundreds or thousands of gallons rather than actual gallons (read a compelling reason to change to billing in gallons here). If your utility is one of these, I encourage you to convert the usage presented on your bill to individual gallons, for example 5000 rather than 50 or 5. Even if your bill notes that usage is billed in hundreds or thousands of gallons, it is more easily understood when shown in actual gallons.

Converting usage to gallons is even more helpful if you bill in cubic feet or some multiple thereof, such as hundred cubic feet (CCF). I recommend converting usage to gallons because the average customer understands gallons but may not relate to cubic feet.

Speaking from personal experience, my own water provider (the City of Raleigh) bills in hundred cubic feet. I’ve been in this business for over 30 years and I know that one cubic foot equals approximately seven and a half gallons. Yet, when I receive a bill for 7 CCF, I still find myself reaching for a calculator to convert my usage to gallons.

Why not be customer friendly and provide this conversion to gallons for your customers?

Don’t inform your customers of the draft date

If you offer bank drafts (and if you don’t, read here why you should), does your bill inform your accounts that will be drafted of their draft date? If it doesn’t, I encourage you to start. It’s an easy thing to do and it’s very customer friendly. This is especially true if your draft date varies from month to month.

Nobody likes surprises when it comes to having money deducted from their bank account. Even customers who have granted you permission to draft their account may forget the date. Printing the draft date on their bill may be all it takes to eliminate a phone call to your office. It also may be all the reminder a customer needs to insure they have enough money in their bank account to cover the draft and avoid being overdrawn.

Force your customers to calculate the amount to pay if paid after the due date

I believe in being as explicit as possible when it comes to showing your customers how much they must pay. This is even more important if they don’t pay by the due date and incur a late fee. As we saw in the Utility Fee Survey results, a substantial majority of utilities now charge a late fee as a percentage. Do you trust your customers to calculate the late fee correctly?

Why not make it easy for them and clearly present how much they must pay if the bill is not paid by the due date? Personally, I’m a big fan of the ”if paid by” and ”if paid after” presentation I described in Utility Information Pipeline #19 when I advocated not sending second notices.

Fail to show the number of days of service

Most utilities try to maintain a consistent meter reading schedule and keep the days in each billing period as close to the same as possible. However, due to weekends, holidays, employee absences or inclement weather, sometimes the number of days in a billing period will vary more than the usual day or two.

When this occurs, the amount of your customers’ bills fluctuate accordingly. Of course, when the days of service are less than normal, and your customers’ bills are lower than usual, you’ll never hear from them. But when the days of service exceed the usual number, and your customers’ bills increase accordingly, so do the number of complaint calls.

Showing the number of days of service on your bill helps avoid some of these customer inquiries. Including the usage and cost per day goes one step further, and hopefully eliminates even more calls.

Don’t present historical usage

Another way to help your customers understand higher than expected bills is to show historical usage trends on the bill. This is most often seen in the form of usage history graphs, but even tabular data is better than not showing any usage history.

This can prove to be even more helpful if your customers’ usage trends vary seasonally with heating and cooling for energy services or with watering lawns and gardens or filling pools for water.

Being reminded of how much they used during the same period last year may help your customers understand why their bill is higher than they expected.

How customer friendly is your bill…?

Do you show something on your bill that you think is especially customer friendly? If you do, please take a minute and share your ideas here.

Would you like my opinion?

If you’re wondering if your utility bill is as customer friendly as it could be, I have an offer for you.  Be one of the first five people to e-mail me a scanned image of your utility bill and I’ll be glad to give you my feedback.

© 2012 Gary Sanders

2012 Utility Fee Survey Results – Part III

The 2017 Utility Fee Survey is now open. Please click here to participate in the survey.

 
 
 

Editor’s Note: The 2015 Utility Fee Survey is now complete and you can see the results of that survey here:

2015 Utility Fee Survey Results – Part I

2015 Utility Fee Survey Results – Part II

2015 Utility Fee Survey Results – Part III

This is the last of three consecutive Utility Information Pipelines reporting the results of the Utility Fee Survey. Eighty-eight utilities, from 15 states, ranging in size from 200 to 168,500 active accounts participated in the survey.

The first issue summarized the demographics of the survey respondents as well as water and sewer tap and impact fees. Last week’s issue dealt with delinquent fees and policies. Today’s issue explores the remaining fees.

Clicking on any of the graphs will open a larger image in a new window.

Returned check fees

Of the 88 participating utilities, 86 charge a returned check fee. Returned check fees range from $15.00 to $50.00, as this graph illustrates:

Application fees

In Utility Information Pipeline #10, I wrote about application for service best practices. One of my recommendations was to charge a non-refundable application fee, in addition to any security deposit, to all new accounts. I’m pleased to report that 46 of the 88 utilities (representing 52.3%) responding to the survey charge such an application or administrative fee. These application fees range from $5.00 to $100.00 as shown below:

Meter reread fees

Sixteen of the eighty-eight utilities (or 18.2%) charge a meter reread fee if the customer requests their meter be reread. In many cases, this fee is waived if it turns out the customer was correct and the utility misread the meter. Of the utilities that charge a meter reread fee, the fee ranges from $8.00 to $50.00 as this graph shows:

Meter tampering fees

Fifty-three of the eighty-eight utilities (or 60.2%) charge a meter tampering fee. Six utilities charge the actual cost of repairs or cost plus an administrative fee. The remaining 47 utilities charge a flat fee ranging from $15.00 to $1000.00 as shown below:

Convenience fees

One of my earliest issues last year explained why I believe utilities should accept credit cards. I’m pleased to see that, of the 88 utilities responding to the survey, 55 of them (or 62.5%) accept credit cards. Of the 55 that do accept credit cards, 22 of these charge a convenience fee on at least one form of credit card payments as shown below:

As you can see, six utilities assess a convenience fee for over the counter payments. If you read Utility Information Pipeline #22, you know that, unless you are in a state with specific legislation allowing you to do so, Visa and MasterCard do not allow convenience fees for over the counter payments, so these six utilities are potentially in violation of their agreements with Visa and MasterCard.

The convenience fees charged by these utilities are too diverse in how they are assessed to be graphed, so they are presented here in a table.

Other fees

In addition to the fees that have been described in the three results issues, the survey asked what other fees utilities charge. Below I’ve listed a few of the more creative fees that were reported:

Letter of credit fee

Customers who have moved away often request a letter of credit reflecting their payment history while they were customers. One utility charges a $5.00 fee to provide a letter of credit. Your staff must take time to prepare the letter of credit and send it to the requesting utility, so why not charge a fee for providing this service?

Payment extension fee

Many utilities offer payment extensions to customers who may not be able to pay their bill by the due date. One utility assesses a $5.00 fee per payment extension. Having to pay an additional fee to extend the payment date may well be all it takes to convince your customer to go ahead and pay the bill now. If not, it provides an additional source of revenue when they do pay.

Return trip fee

When turning a meter on, most utilities will not leave the water on if the meter indicates water is running inside the house and no one is home. This requires the utility to make a return trip when the customer is home to turn the meter on again. Several utilities charge a return trip fee to cover the time and expenses involved in returning to the customer’s home.

Same day connection fee

A number of utilities routinely provide next day service for activating new accounts. A few utilities charge an additional fee for same day service and one even charges more for same day service late in the afternoon than they do for earlier in the day.

A special offer

I’m offering a special offer to readers of my blog. If you let me know that you read this here, I will conduct a personalized fee consultation for a 20% discount. That’s $800 rather than the usual $1,000 price for this service.

I will review your utility’s current fee schedule and conduct an in-depth phone assessment to learn more about your fees. You will receive a presentation quality document illustrating how your fees compare with other utilities. Also included will be my recommendations for revising any existing fees and suggestions of new fees you should consider charging. An on-site presentation of the report can also be arranged for an additional fee, plus travel expenses.

If you are interested in this special offer, please contact me by calling 919-232-2320 or e-mailing me at gsanders@logicssolutions.com. Remember to let me know that you read this on my blog when you contact me.

Click here to subscribe to my free, bi-weekly e-mail newsletter...

© 2012 Gary Sanders

2012 Utility Fee Survey Results – Part II

The 2017 Utility Fee Survey is now open. Please click here to participate in the survey.

 
 
 

Editor’s Note: The 2015 Utility Fee Survey is now complete and you can see the results of that survey here:

2015 Utility Fee Survey Results – Part I

2015 Utility Fee Survey Results – Part II

2015 Utility Fee Survey Results – Part III

This is the second of three consecutive Utility Information Pipelines reporting the results of the Utility Fee Survey. 88 utilities, from 15 states, ranging in size from 200 to 168,500 active accounts participated in the survey.

Last week’s issue summarized the demographics of the survey respondents as well as water and sewer tap and impact fees. Today’s issue deals with delinquent fees and policies. Next week the third and final survey results issue will recap all remaining fees.

Clicking on any of the graphs will open a larger image in a new window.

Late fees

Of the 88 participating utilities, 87 charge a late fee. As shown by this pie chart, charging a late fee as a percentage of the bill is the most popular method:

Utilities that assess the late fee as a percentage charge from 1% to 15%, with 10% being the most popular, as this graph demonstrates:

Late fees range from $5.00 to $85.00 for utilities that charge a flat amount. (The utility that charges $85.00 does so in lieu of charging a reconnect fee.) This graph illustrates the late fee flat amounts:

Cut-off fees

Four of the 88 utilities do not cut off for non-payment. All of the 84 that do cut off for non-payment charge a flat amount cut-off or reconnect fee, ranging from $20.00 to $100.00 as shown below:

Of the 84 utilities that cut off for non-payment, 52 of them (representing 61.9% of the responding utilities) assess the cut-off fee as soon as the cut-off list leaves the office. I wrote about this in Utility Information Pipeline #32.

Cut-off fee terminology

As more utilities adopt this best practice, many of them are finding that terms such as “cut-off fee”, “disconnect fee” or “reconnect fee” are becoming outdated. For that reason, the survey asked what each utility calls its cut-off fee. The results are displayed in the following chart:

For the number of responses, including the ten terms included in the “other” category, please click here.

As you can see, reconnect fee and cut-off fee are still the most popular terms, but many utilities have adopted terms that do not refer to cut-off or reconnection. Calling your cut-off fee “delinquent fee” or “non-payment fee” or any of the other terms that do not imply cut-off or reconnection helps to avoid the inevitable arguments with customers who must pay the fee but have not been cut off.

After hours reconnect fees

Of the 84 utilities that cut off for non-payment, 35 of them (representing 41.7%) will reconnect after hours and charge a fee for this service.  26 of the 35 utilities (or 74.3%) will reconnect anytime after regular office hours. The remaining nine utilities will only reconnect during selected time periods as shown below:

After hours reconnect fee amounts range from $20.00 to $185.00 as show by the following graph:

Next week’s issue

Part III –June 12, 2012

Next week’s final survey results issue deals with any remaining fees, including application, returned check, meter reread, meter tampering and convenience fees.

A special offer

I’m offering a special offer to readers of my blog. If you let me know that you read this here, I will conduct a personalized fee consultation for a 20% discount. That’s $800 rather than the usual $1,000 price for this service.

I will review your utility’s current fee schedule and conduct an in-depth phone assessment to learn more about your fees. You will receive a presentation quality document illustrating how your fees compare with other utilities. Also included will be my recommendations for revising any existing fees and suggestions of new fees you should consider charging.

If you are interested in this special offer, please contact me by calling 919-232-2320 or e-mailing me at gsanders@logicssolutions.com. Remember to let me know that you read this on my blog when you contact me.

Click here to subscribe to my free, bi-weekly e-mail newsletter...

© 2012 Gary Sanders