5 easy ways to get more bank draft customers

Recently, during a sales presentation, I came to the bank draft tab in Logics’ Utility Management application. I asked, as I always do, if they accepted bank drafts. The City Administrator spoke up and said he wished 99% of their customers were bank draft customers. When I asked why not 100%, he replied “There’s always that one percent that won’t do it, no matter how much sense it makes.”

After everyone stopped laughing, one of the office staff asked if I had any ideas how to increase bank draft participation. Interestingly enough, I had just finished the first draft of an ebook entitled 5 Surefire Ways to Save Time Processing Payments. The first of the five ways is bank drafts and the chapter goes on to list five ways to promote bank drafts.

Here they are…

1. Waive the first late fee in exchange for signing up for bank drafts

Whenever a customer calls to complain about being charged a late fee, offer to waive the penalty if they sign up for bank drafts. Once they are a bank draft account, they will never be late again!

2. Offer incentives to sign up

I know of utilities that offer a one-time $5.00 credit for signing up for bank drafts. Others give a $1.00 per month credit for the first year the customer is drafted.

3. Ask every new customer if they want to pay by bank draft

Have you applied for a life insurance policy recently? Insurers practically make issuing the policy contingent upon the insured agreeing to pay by direct debit. Why not deal with new customers applying for service the same way? There’s an age-old adage in sales, “assume the close”, and the same technique can work for signing new applicants up for bank drafts. Why not hand them a bank draft form along with the application to sign?

4. Include a signup form on your website

Ideally, your customers should be able to complete an online form with the bank draft information. But, if not, at least post a downloadable sign-up form on your website so your customers can complete and return it to your office.

5. Promote bank drafts on your utility bill

Does your utility bill have a section for comments you can enter each billing? Why not use this to publicize bank drafts along with whatever other announcements you have that month? If you print full-page bills, you can also include a bank draft sign-up form as an insert with the utility bill.

How do you promote bank drafts?

What does your utility do to promote bank drafts? Do you have a unique or innovative way of encouraging your customers to sign up for bank drafts? Please leave a comment at the bottom of this post for other readers to see.

2017 Utility Fee Survey results

The next Utility Information Pipeline, to be published on July 18, will include the first set of results for the 2017 Utility Fee Survey. The survey technically closed at the end of the day, June 30, but I haven’t started recapping the results yet.

If you haven’t participated and would still like to, you may click here to complete the survey. It should take less than five minutes to complete.

Trying to streamline payment processing?

If you’re looking to reduce the amount of time it takes to process payments, or streamline any other part of your operation, please give me a call at 919-232-2320, or email me at gsanders@logicssolutions.com for more information about how a business review could help you review your entire office operation.


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© 2017 Gary Sanders

What is your policy regarding loose coins?

You’ve probably read articles online or seen television news accounts of irate customers protesting a bill by paying entirely with coins. If you haven’t, just Google “coins as payment protest”. There’s even this story about a Michigan woman paying her entire $569.81 adjusted water bill with coins!

Listserv inquiry

A post from earlier this summer in a listserv I follow inquired if others in the listserv had policies prohibiting customers from paying with an excessive amount of coins. Apparently the poster has experienced this problem, or is at least interested in not experiencing it in the future!

Are you prepared to keep it from happening?

In an earlier Utility Information Pipeline, I wrote about a utility that doesn’t accept cash at all, so for them this wouldn’t be an issue. However, if your utility is like most I’m familiar with, you still accept cash and, without a policy to stop it, could be susceptible to an angry customer trying to pay with all coins.

Most banks won’t accept an excessive amount of coins for deposit unless they are rolled. So requiring any payment in coins (in excess of the amount of a roll of that denomination) to be rolled does not seem unreasonable. Also, entirely reasonable in my opinion, would be a limit to how much in rolled coins can be tendered for a single transaction.

How do you handle loose coins?

How does your utility deal with loose coins? Please take this quick poll.


Once you’ve taken the poll, you can see the results to see how other utilities responded. If you have a loose coins policy, please feel free to post the specifics of your policy in the comments. Click here to see the results.

Are your payment policies up-to-date?

If your payment policies are outdated, or if you think you could improve on how you take payments, please give me a call at 919-232-2320 or email me at gsanders@logicssolutions.com for more information about how a business review could help improve your operation.

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© 2016 Gary Sanders

Save time processing bill pay checks

The last Utility Information Pipeline examined the Eighth Annual Billing Household Survey from Fiserv. One of the more interesting statistics from the survey was a graphic showing the preferred payment methods of online households.

The number one choice was paying online at your website. Number two was paying by check, followed closely by paying online at your customer’s financial institution’s website.

Online banking checks

When your customer pays online at their financial institution’s website, you recognize this because you likely receive a computer printed paper check with no bill stub included.

These online banking checks can be an annoyance because, as mentioned above, they arrive with no bill stub enclosed. This means you must rely on your customer to have entered their account number correctly. If not, time consuming research is required to locate the account number. Additionally, many customers, because they “paid online”, assume you will receive their payment immediately, not realizing a paper check must be printed and mailed.

I bank with Bank of America and they have recently changed their online bill pay process to more clearly identify which payments will be delivered electronically or by check. See the screen shot below for an example of a payment which will be delivered by paper check:

Online Banking Screenshot

Most banks don’t print their own online banking checks, preferring to outsource this process to a check processing service such as CheckFree or a division of MasterCard. These check processing services then print and mail the check to your office. However, if they detect additional checks scheduled to be mailed to your utility in the next day or two, they will often hold all these checks to mail in one large envelope, further delaying the delivery of your customer’s payment.

Electronic payment delivery

These check processing services deliver payments electronically to large volume payees such as large utilities, credit card and mortgage companies, but typically print checks for smaller volume recipients.

Fortunately for smaller utilities, there are payment processing vendors who expedite the process by aggregating payments from the check processors, deposit the funds in your account, and provide a file to be imported into your billing software.

Let’s examine some of the benefits of using an online banking check consolidator…

Improved cash flow

Rather than waiting a week, or longer, after your customer initiates payment to receive a check, with a payment consolidator you receive your funds much sooner, sometimes the next day.

Saves staff time

With a payment consolidator, you receive a file to be imported into your billing software. This saves the time of manually entering each payment.

If your customer entered an incorrect account number when setting up your utility as a payee, the payment won’t import correctly. Payment consolidators provide a way to enter the proper account number and have the system automatically correct the account number going forward. This saves your staff the time involved in researching account numbers each month.

Better customer relations

Because you receive the payment sooner, fewer customers receive late fees or are disconnected for non-payment, resulting in improved customer relations for your utility.

Are you interested in using a payment consolidator?

If you are still receiving online banking checks as paper checks, please give me a call at 919-232-2320 or email me at gsanders@logicssolutions.com for more information about how a check consolidator could improve your operation.

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© 2016 Gary Sanders

How to make your customers happier

For the last eight years, Fiserv, a global company in the financial services industry, publishes an Annual Billing Household Survey. This survey reports trends in how consumers receive and pay their bills.

Past Utility Information Pipeline articles referenced this survey in 2012 and 2014. The Eighth Annual Billing Household Survey is now available and this issue will highlight a few statistics from it.

Customers want choices

This graphic, from page 20 of the report, highlights how offering different billing and payment options impact customer satisfaction (clicking on any of the graphics will open a larger image in a new window):

Customer Satisfaction Factors

Multiple payment options

Almost as if it were written for the audience of this blog, consider this quote from the graphic on page 21 of the report:

“The expectation of multiple payment options does not vary depending on the type of biller. In fact, consumers expect a local utility to provide the same options as a national wireless carrier or cable provider.”

As the graphic shows, 79% of customers expect your utility to provide the same options as much larger national companies:

Expectation of Multiple Payment Options

Preferred payment options

According to the survey respondents, as shown in the graphic below from page 8 of the report, the majority of online households prefer to pay their bill at your website, ahead of paying by check:

Online Household Payment Methods
In third place is paying the bill online at the customer’s financial institution website. The text accompanying this graphic says:

“Between the Seventh and Eighth Annual Billing Household Surveys, there was a 72 percent increase in consumers making payments at both biller and financial institution websites. Paying bills at a financial institution’s site also grew significantly by 55 percent.”

Clearly, the trend is toward paying bills online, whether that is your website or the customer’s financial institution’s website. The next Utility Information Pipeline issue will deal with automating payments made by your customers using their bank’s online bill pay.

Paperless billing

The final statistic I want to highlight is how important paperless billing is becoming to customers. The graphic pictured below, from page 14 of the report, shows that 79% of households receive some of their bills electronically, and 25% receive all bills paperlessly.

Paperless Billing Preferences
In addition, only 22% have no interest in going paperless! Clearly, paperless billing is the way of the future.

Are you offering your customers the choices they want?

Are you offering your customers all the payment options they desire? Are you offering paperless billing? If the answer to either question is “no”, please give me a call at 919-232-2320 or email me at gsanders@logicssolutions.com to learn how a business review could help you learn how your office could better meet your customer’s needs.

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© 2016 Gary Sanders

Do you track this?

I’ve begun reviewing the responses to the Utility Staffing Survey. If you haven’t completed the survey yet, there’s still time to do so by clicking here.

In addition to asking how many staff in various capacities are employed by each office, the survey asked questions about labor intensive practices such as payment processing and bill printing.

One of the those questions asked what percentage of payments were received by each of the following methods:

  • Walk-in
  • Mail
  • Bank drafts
  • Online
  • Phone

Walk-in payments

One of the most interesting observations from the survey was the wide range of responses in the number of walk-in payments received. On the low end, several utilities reported receiving less than 5% of payments from walk-in customers while on the opposite end of the spectrum one utility reported receiving 90% of their payments as walk-in payments!

The graph below illustrates the responses of the percentage of walk-in payments for those utilities who track this (clicking on the graph will open a larger image in a new window).

Percentage of Walk-in Payments

Surprising responses

Other than the wide range in the number of walk-in payments, one of the big surprises of the survey was that a few utilities don’t track payments by source. They track how many payments are made in cash, by check and credit cards, etc., but they don’t know how many checks were received in the office compared to in the mail.

Tracking payments by source

If your goal is to reduce the amount of walk-in traffic (in 35 years in this business, I’ve never heard a utility wish more customers would pay in the office!), doesn’t it make sense to measure this statistic in order to track trends?

If your software is configurable to allow tracking payments in more detail than just cash, checks and credit cards, I encourage you to make use of this feature. If you’ve started initiatives such as online bill pay or IVR phone payments in an attempt to reduce in-office payments, the only way to know if these initiatives are working is to track the volume of walk-in payments.

Do you need help reducing the number of walk-in customers?

If your utility needs assistance evaluating ways of reducing walk-in traffic, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help your utility.

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© 2016 Gary Sanders

Cost of doing business or charge a fee?

Just yesterday, another post surfaced on one of the listservs I subscribe to about charging a convenience fee for credit card use.

Credit Cards

There are two prevailing schools of thought on credit card use and the resulting fees:

  • The cost of accepting credit cards is a cost of doing business and the utility absorbs the fees
  • The cost of accepting credit cards is a burden that should be borne only by customers who choose to pay by credit card and those customers should pay the fees

Before making a determination if your utility should charge a convenience fee, you must first evaluate why you accept credit cards.

Cost to be absorbed by the customer

Utilities that charge a convenience fee view the fee as a way of recouping the cost of the credit card transaction without spreading this cost across the entire customer base. A common refrain from utilities like this is “it’s not fair for all customers to pay for those customers who want to pay by credit card”.

If your utility chooses to accept credit cards only because a few, vocal customers have requested it and not because you see the value to your organization in doing so, then charging a convenience fee makes sense.

However, this logic fails to take into account the costs associated with other payment methods. Accepting a payment by cash in the office costs considerably more (wages for the clerk to taking the payment and making change, balancing the cash drawer, preparing a daily deposit and taking the deposit to the bank) than processing a bank draft. Would it be fair to charge customers paying in cash extra? I think not.

Cost of doing business

Utilities choosing to accept credit cards and absorb the fee generally feel they are providing a service for the customer and reducing their own workload at the same time.

One response to the listserv post I mentioned above noted a decrease in the number of customers on the cut-off list as a result of accepting credit cards.

Many utilities view accepting credit cards as a way to grow without adding staff and reducing walk-in traffic (especially if they offer online bill pay or IVR phone payments).

What other utilities do

If you’re interested in seeing how other utilities handle credit cards and convenience fees, the 2015 Utility Fee Survey results recaps how many utilities accept credit cards and how many of those charge a convenience fee.

Free rates dashboard webinar today

I’ve previously written about the Utility Rates Dashboards from the Environmental Finance Center at UNC. The EFC has just released the 2016 North Carolina Water and Wastewater Rates Dashboard and will be sponsoring a free webinar today at 3:00 pm EDT introducing the dashboard. If you’re interested, click here to register for the webinar.

Do you need help evaluating credit cards and convenience fees?

If your utility needs assistance evaluating credit cards and convenience fees, or any other way of reducing walk-in traffic, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could help your utility.

Staffing survey deadline

The deadline for the Utility Staffing Survey is Friday, April 15. This survey is designed to determine what is adequate staffing for a utility office. If you haven’t already participated in the survey, please click here to complete the Utility Staffing Survey. This should take less than five minutes to complete. I will publish the results in a future Utility Information Pipeline.

Thank you in advance for taking the time to complete the survey. Please feel free to share the survey with your peers at other utilities.

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© 2016 Gary Sanders