How can I reduce walk-in payments in my office?

Recently, a customer inquired about ways to reduce walk-in payment traffic in their office. Unfortunately, there are no easy answers to this question because several key factors are out of your control.

Factors impacting walk-in traffic

In my experience, the biggest factor affecting walk-in traffic is the demographics of your customer base. Utilities that serve older or more low income populations tend to have more walk-in traffic than those serving younger or more affluent communities.

Another factor that seems to impact walk-in payments is the location of your office. Offices that are in the central business district of most small or mid-sized cities and towns are likely to have more walk-in traffic than if they were located farther out of town.

But there are a few things you can do that might entice your customers not to visit your office to pay each month.

Bank drafts

Simply put, bank drafts, or ACH payments, are the easiest way to collect payments. You collect your customer’s banking information, create an ACH file, send it to the bank and your billing system creates payment transactions for each bank draft customer. If it’s not that simple with your billing system, it’s time for new software.

Do you aggressively market your bank draft program to your customers? Some utilities ask every new customer if they would like to sign up to pay by bank draft. Have you purchased a life insurance policy lately? That’s exactly how they do it.

Periodic bill inserts is another way to publicize and market your bank draft program. Be sure to include a bank draft enrollment form with your bill insert.

Online bill pay

An integrated online bill pay system not only provides your customers with a convenient way to pay, it also can answer many questions that would otherwise require a call to your office, reducing both walk-in traffic and phone calls. Does it get any better than that?

An effective online bill pay system should provide answers to the questions most frequently asked of your customer service staff:

  • How much is my bill?
  • When is it due?
  • Did you receive my last payment?
  • Can I pay online or over the phone?
  • How does my usage compare to previous billing periods?

IVR payments

Another way to limit walk-in payments is an IVR (interactive voice response) system. Interactive voice response systems provide a way for your customers to pay by phone even when your office is closed.

After all, what have you accomplished if you offer phone credit card payments as a way to reduce walk-in payments and it takes a customer service representative longer to process a payment over the phone than it did face to face?

Convenience fees

Any discussion of credit card payments always leads to questions about convenience fees. Should you or should you not charge a convenience fee?

In my opinion, if you are implementing online bill pay or IVR payments as an alternative to walk-in payments, then you shouldn’t charge a convenience fee. If you truly want to see a decrease in foot traffic in your office, you should do all you can to encourage your customers to pay through other means, including removing any impediment such as adding a convenience fee.

Are you ready to try something different?

If you are interested in reducing walk-in payments, or solving any other customer service issues, please give me a call at 919-232-2320 or e-mail me at to learn how a business review could assist you with the process.

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© 2013 Gary Sanders

Are you considering offering budget billing?

Every now and then I get inquiries from utilities asking about starting a budget billing program. In a previous issue, I discussed why customer service is important, even to a utility with no competition.

Budget billing is a customer service convenience that provides a way for your customers to avoid seasonally high and low utility bills. They pay a more manageable amount that is easier to budget for, hence the name budget billing.

This issue will examine different budget billing methods and, hopefully, will help you decide if you should offer budget billing.

Budget billing methodologies

Budget billing programs generally fall into one of two categories – equal payment plans and levelized billing. Let’s start by looking at each and what differentiates them.

Equal payment plans

An equal payment plan establishes a flat amount that your customer pays for 11 months before “settling up” in the twelfth month.

The monthly budget amount is based on an established usage pattern, usually the previous year. In fact, many utilities will not allow a customer sign up for budget billing until they have at least 12 full months of usage history. A common practice is to factor in a nominal increase over the previous year’s historical average to allow for possible rate increases and changes in the customer’s usage patterns.

In the settlement month, the customer pays their actual charges plus or minus the accumulated budget billing balance. The budget billing balance is the net difference between the actual charges and the budget bill amounts for the previous 11 months. The budget billing balance can be positive or negative, depending on whether the customer’s usage has increased or decreased over the past year.

Levelized billing

As the name implies, levelized billing levels out the monthly bill amount, but it will still vary from month to month. Many levelized billing programs compute the monthly payment by averaging the previous 11 months plus the current month’s actual bill amounts.

Because levelized billing continuously averages the monthly budget amount, there is no need for an annual settlement month. Customers on levelized billing settle only when they discontinue budget billing.

Which is better – equal payment plans or levelized billing?

This is a trick question, because one really isn’t better than the other – it’s all about preferences.

From personal experience as a utility customer, my preference is an equal payment plan. For both electric and natural gas, my wife and I participate in equal payment plans and we like knowing exactly how much our utility bill will be each month.

Should you offer a budget billing program?

My recommendation is, if your utility provides an energy service (electricity or natural gas) then, yes, offering budget billing would be a convenience for your customers and I encourage you to do so.

However, if you are a water and sewer utility with no energy services, I don’t recommend offering budget billing. Even with summer irrigation, water bills typically don’t fluctuate enough from month to month to justify the overhead of administering a budget billing program.

Are you considering implementing a budget billing program? Please give me a call at 919-232-2320 or e-mail me at to talk about how I can help you get started.

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© 2013 Gary Sanders