Keep reading for free consulting!

I’ve participated in lots of sales training over the years. In a consultative sales environment, where the seller makes an effort to learn about the buyer’s needs before recommending a solution, one of the things we’re taught to avoid is “free consulting”. Free consulting is considered to be giving away information and advice that a prospect would otherwise pay to receive.

Truth be told, a lot of what I write about in this newsletter could be considered free consulting, but I do it to educate my readers and establish both my and Logics’ credibility in the utility billing software marketplace.

Observations from 2017 Utility Fee Survey

Keep reading because I’m about to give away some “free consulting” based on the results of the 2017 Utility Fee Survey. The last Utility Information Pipeline, which was the third and final installment of the Fee Survey results, included returned check fees.

One of the surprising observations was how many utilities either charge more or less than the maximum allowable fee for their state. Of the 117 utilities completing the survey, 27 utilities (representing 23.1%) charge less than the maximum allowed for their state and 26 (or 22.2%) charge more.

The graph below illustrates the utilities that do not charge the maximum allowable for their state and how much their fee is below or above the maximum allowed (clicking on the chart will open a larger image in a new window):

Free consulting

Here’s the free consulting… Take a moment to verify if your returned check fee is the maximum allowed in your state and, if you are charging less than the maximum allowed, increase it at your first opportunity!

Why would you charge less than the maximum allowed for customers who intentionally write bad checks to your utility? (You can always waive the fee if your customer has a convincing explanation of why their check bounced.) If you’ve been reading the Utility Information Pipeline for a while, you know I am a proponent of charging user fees to generate revenue wherever possible and returned check fees are no exception.

If you’re charging more than is allowed

If your returned check fee is more than is allowed for your state, I recommend reviewing this with your attorney to determine if your customers have any legal recourse against your utility for overcharging them.

What is allowed in your state?

Here is a guide by state and here is a more in-depth analysis, including references to the statute that governs returned check fees in each state. If you have any doubts about what you are allowed to charge in your state, I suggest consulting with your attorney.

Is it time to review your fees?

If you haven’t reviewed your fees recently, there’s no time like the present! If you have questions about the fees you charge or would like assistance reviewing your fee structure, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review might benefit your utility.

NRWA WaterPro Conference

Will you be attending the National Rural Water Association WaterPro Conference in Reno? If you will, or know someone who will be, please make plans to attend my presentation Improving Revenue Collections for Utilities at 4:00 pm on Monday, September 18.

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© 2017 Gary Sanders

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

How do you handle temporarily inactive accounts?

I had a Town Manager who attended my recent presentation at the North Carolina Rural Water Association Annual Conference contact me with a question. He wanted to know what I recommended regarding billing for temporarily inactive accounts.

Snowbirds

If you have seasonal customers, you know the issue he was inquiring about – snowbirds from colder climates who go south for the winter (or, conversely, winter homes in warmer climates) or summer homes where your customer only wants the utilities on for the summer months.

The dilemma facing your utility is should you continue to bill the base charge each month, even if the customer has no usage?

Recovery of infrastructure costs

One clue as to how to handle this is understanding the rationale behind your base charge.

For many utilities, the base charge is designed to recover the investment you have in providing service to the property, regardless if there is usage. You must maintain the infrastructure and service lines year-round and you have an investment in a meter at the premises, even if no one is living there.

If this is the case for your utility’s base charge, you have every reason to continue to charge the base charge, even if the account is temporarily inactive.

Fees in lieu of monthly billing

An alternative to billing the customer each month is to charge a fee to turn the service off and another fee to turn it back on (based on the user fee concept that you are performing a service for this customer that wouldn’t otherwise be required).

The idea here is the two fees combined should cover your staff’s time and effort to disconnect and reconnect the service as well as recoup what your customer would have paid if they left the service on with no usage and paid the base charge only.

How does your utility handle this?

How does your utility handle temporarily inactive accounts? Please take this quick poll.


 
Once you’ve taken the poll, you will be able to see the results to see how other utilities responded. I’ll publish the final results in the next issue.

2017 Utility Fee Survey

The 2017 Utility Fee Survey is ongoing. If you haven’t already completed it, please click here to complete the survey. It should take less than five minutes to complete. For an idea of what to expect from the survey, here are the results of the 2015 Utility Fee Survey:

If you have any questions, please feel free to e-mail me at gsanders@logicssolutions.com or call me at 919-232-2320.

I’m hoping for as much participation as possible in the survey, so please feel free to pass this on to your colleagues at other utilities.

Thank you in advance for your participation in the 2017 Utility Fee Survey.

Reviewing your policies?

If you’re in the process of reviewing or updating your policies, 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 are your repayment plan policies?

Once again, one of the listservs I subscribe to provided the subject matter for a newsletter. This time it was a town manager asking about policies allowing repayment plans.

Due Date

A previous Utility Information Pipeline described the distinctions between extensions, installment services, and payment arrangements. This issue will examine some of the requirements many utilities impose on customers requesting a repayment plan.

Limited number of repayment plans

Most utilities impose a limit on the number of repayment plans a customer may have within a given timeframe. For example, only allowing two extensions per calendar year or twelve month period.

The rationale for this is, under normal circumstances, your customers should be able to pay their bill by your established due date. Customers who habitually request additional time to pay are abusing the system.

No history of dishonored payment plans

For most utilities that offer repayment plans, failing to honor a previous payment plan automatically makes a customer ineligible for future payment plans. If your customer failed to live up to their agreement, why allow them to take advantage of you again?

Signed agreement

Perhaps the most important part is to require a signed agreement stating the repayment terms and consequences of failing to honor the agreement.

This signed agreement should include promised payment dates and amounts, along with any interest or finance charge to be assessed. As with any legal document, it’s always wise to consult with your attorney when drafting the document.

2017 Utility Fee Survey

The 2017 Utility Fee Survey is still open. If you haven’t already completed it, and would like to participate, please click here to complete the survey. It should take less than five minutes to complete. For an idea of what to expect from the survey, here are the results of the 2015 Utility Fee Survey:

If you have any questions, please feel free to e-mail me at gsanders@logicssolutions.com or call me at 919-232-2320.

I’m hoping for as much participation as possible in the survey, so please feel free to pass this on to your colleagues at other utilities.

Thank you in advance for your participation in the 2017 Utility Fee Survey.

North Carolina Rural Water Association presentation

If you or any of your co-workers or board members will be attending the North Carolina Rural Water Association Annual Conference, please be sure to attend my presentation on Improving Revenue Collections for Utilities this Thursday, May 18 at 8:30am.

If you or someone from your utility does attend, please be sure to introduce yourselves!

Need assistance?

If you’re considering offering payment plans or are unsure if your delinquent account policies are adequate, 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 should your customer service policy include?

Happy New Year!

Let me start by wishing you and yours a Happy New Year for 2017! 2017 marks the 6th anniversary of the Utility Information Pipeline and I look forward to another year of offering insights into how your utility can operate more efficiently and better serve your customers. As always, if you have suggestions or ideas of a topic for me to cover, please email me!

Last issue

The last Utility Information Pipeline included the results from a poll asking if reader’s utilities have a formal customer service policy. It went on to explain why I believe having one is important. I promised this issue would address what should be included in a customer service policy.

Elements of a formal customer service policy

Let’s take a look at some key items that should be included in a customer service policy…

Application for service

For starters, your customer service policy should include what is required of a customer applying for service. What forms of ID do they need to provide? Are they required to pay a security deposit or an application fee?

Security deposits

If you do require a security deposit for new customers, the amount of the deposit should be plainly stated in your customer service policy, as should any nuances in how the security deposit is determined.

Do you charge a different deposit for renters than homeowners? Do you perform a credit check to determine the amount of the customer’s deposit? Do you retain the deposit until the customer leaves or do you refund it for good credit customers? All of these should be clearly defined in your customer service policy.

Rates and fees

Your rates and fees should also be set forth in your customer service policy. In addition to rates for the services you provide, your customer service policy should also include any fees, such as returned check fees or any other fees you charge.

And, of course, be sure to update your customer service policy each time your rates and fees change.

Due dates and disconnection for non-payment

The section most often referred to in many customer service policies is the one dealing with late payments and disconnection for non-payment. Be sure your policy clearly states how the due date is determined and how much the late fee will be if not paid on time.

If your utility cuts off for non-payment, your policy should also accurately describe when an account is subject to disconnection and how the cut-off fee is charged.

Payment options

How many ways can your customers pay their bill? Do you charge a convenience fee for credit card payments? Can your customers pay their bill online? What must your customers do to sign up for bank drafts? All of these questions should be answered by your customer service policy.

Budget billing

Does your utility offer budget billing? If you do, your customer service policy should explain the details of how the monthly payment is calculated and the requirements for customers to sign up for budget billing.

Disputed billings

Your customer service policy should outline what options are available to customers who believe their bill was incorrectly calculated. It should also describe the details if you offer leak adjustments or summer sewer adjustments.

Do you have a formal customer service policy?

If your office needs assistance developing or updating your customer service policy, 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.

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© 2017 Gary Sanders

Why don’t you have a formal customer service policy?

The last Utility Information Pipeline included a poll asking if reader’s utilities have a formal customer service policy. Here are the results of that poll (clicking on the chart will open a larger graphic in a new window):

Poll results

Surprisingly, half of the utilities who responded do not have a formal customer service policy. Of those that do, two thirds haven’t updated it in a long time, leaving just 17% who have a formal customer service policy and update it regularly.

Importance of a customer service policy

I’ve written previously about customer service policies, but have never written about why I believe it is important to have one.

Everyone knows the rules

A formal customer service policy sets forth your utility’s policies and procedures and lets customers know what is expected of them. It also provides guidelines for your employees to use when evaluating a customer’s situation.

Customers don’t like it (nor should they) when they perceive to be treated differently from other customers. Having a customer service policy insures all customers are treated fairly, including everything from how much of a security deposit they must pay to who is cut off for non-payment.

Staff empowerment

Having a customer service policy, and enforcing it for all customers, empowers your customer service staff to make routine policy decisions. No one likes to have their decisions overturned by their boss, especially if it appears to be an arbitrary or if favoritism is involved.

Employee morale improves when your staff knows they will be supported in enforcing your policies. Customer service representatives are empowered when they know management stands behind them and will treat all customers fairly.

Next issue

Now that you have a better understanding about why having a customer service policy is important, the next issue will go into more detail about what should be included in your policy.

Do you need assistance developing a customer service policy?

If your office needs assistance developing a customer service policy, 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.

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© 2016 Gary Sanders