If you’ve heard me speak at a utility conference or you’ve been a subscriber to the Utility Information Pipeline for any length of time, you know that I’m an outspoken proponent of assessing the cut-off fee to every account on the cut-off list as soon as the list leaves your office.

As I’ve started to analyze some of the results from the Utility Fee Survey that I’m conducting (if you haven’t yet participated in the survey, please click here to complete the survey), I’m surprised by the number of responses from utilities that still don’t charge the cut-off fee to every account as soon as the cut-off list leaves the office.

Of the 73 utilities that have responded so far, only 42 charge the fee to all accounts.  That leaves 31 (or 42.5% of the respondents) that still don’t charge the cut-off fee to every account when the cut-off list leaves the office. I find it surprising that so many utilities still follow this outdated practice.

Utility Information Pipeline #3 (you can read it here if you missed it), dealt with cut-off policies. That issue concluded with talking about why I believe utilities should follow the best practice of charging the cut-off fee to all accounts at the same time. Based on the Utility Fee Survey responses, I believe devoting an entire issue to the topic is merited, so here are the top five reasons why you shouldn’t give your customers more time to pay…

5. They are already extremely late, why give them several more hours to pay?

Customers who end up on the cut-off list are already seriously delinquent in paying their bill. They didn’t pay by the due date and they ignored any delinquent notice that you may have sent them. Why give them even a few more hours to pay before assessing the cut-off fee?

4. It’s not fair to customers who live closer to your office

It’s inherently unfair to give customers who live farther from your office more time to pay before being charged the cut-off fee. Inevitably, customers who live closest to your office are likely to be the first customers whose service is terminated each month. Why give those customers who live farther away more time to pay. Charging the cut-off fee to every customer on the cut-off list at the same time is, quite simply, more equitable to your customer base as a whole.

3. No negotiating with the field service technician

If each account has already been charged the cut-off fee before the service technician arrives to cut them off, the service technician no longer has to deal with customers pleading not to cut them off. This removes the service technician from the uncomfortable position of having to deal with a customer begging for time to get to the office to pay before cutting them off in order to avoid paying the cut-off fee.

2. Less work and confusion in the office

With a policy of assessing the cut-off fee to every account on the cut-off list at once, this becomes an automated process rather than having to add the cut-off fee to each account after the account has been cut off. Even if you currently add the fee to every account at one time, it still must be adjusted off from accounts who pay before the actual cut-off takes place.

Cut-off day is already a very hectic day in most offices with angry customers flooding the office to pay (and complain about being cut off). Why add to the noise and confusion in the office by having to radio the service technician each time a customer on the cut-off list comes in to pay?

1. More revenue for your utility!

If you charge the cut-off fee to every account on the cut-off list as soon as the list leaves your office, every account is assessed the fee, generating more revenue for your utility. Unless your utility is different from every utility I’ve ever worked with, this is a good thing!

If you aren’t already considering changing your policy to assess the cut-off fee to all accounts, hopefully the above reasons will help change your mind. If you have any questions about cut-off policies, or any other policies, please contact me to learn more about what a business review could do for your office. I can be reached by calling 919-232-2320 or e-mailing me at gsanders@logicssolutions.com.

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© 2012 Gary Sanders