Why is customer service important?

In the last issue, I wrote about a utility’s innovative customer service policy of extending $25 courtesy credits to customers who received poor service.

That issue closed with the question “we’re a monopoly – why does customer service matter?” So, let’s examine some of those reasons.

It’s the right thing to do

Even if they can’t take their business elsewhere, your customers deserve to be treated with respect and receive good customer service. Granted, some customers have attitudes that make it difficult to want to help them, but good customer service representatives find a way to remain poised and explain the situation calmly.

It reflects positively on your organization

Excellent customer service reflects positively on your entire organization, from front line employees all the way to upper management. Providing poor customer service is truly a case of one bad apple spoiling the whole bunch.

It’s been my experience that employees who have a cavalier attitude about customer service generally approach the rest of their work in the same fashion. Do you really want a cashier who doesn’t care if they make change correctly or a billing clerk who isn’t concerned with a customer’s bill being correct?

You want your customers to speak well about your utility

Sooner or later, you will request an rate increase. For most utilities, this requires a public hearing, either before your board, or if you are a regulated utility, before your state’s utility commission.

The last thing you want is to have is your customers showing up to protest a rate increase by complaining about how they were treated by your staff.

How good is your customer service?

If you are interested in an objective, unbiased look at your utility’s customer service, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could assist you with the process.

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© 2013 Gary Sanders

Is your utility this innovative?

A few months ago, I called my TV and internet provider to complain about a billing issue. After explaining the situation, the customer service representative resolved the problem and applied a credit to my account.

However, before I hung up, she informed me that she was also going to apply an additional credit to my account because of the problem I encountered. As you might imagine, I hung up the phone feeling very pleased!

Courtesy credits

More recently, I’ve been working with a utility where the office manager has the authority to issue a $25 courtesy credit to any customer to help resolve complaints.

We’ve all seen situations where a customer is charged a late fee in error or a payment was misapplied to the wrong account. What better way to diffuse the situation with an angry customer than to resolve the problem and issue an additional credit as a good will gesture?

How is this relevant to utilities?

Granted, in the situation with my TV and internet provider, I have choices and can take my business elsewhere. Your customers probably don’t have the option of switching to another utility, but that’s no reason not to try to provide excellent customer service.

We’re a monopoly – why does customer service matter?

Be sure to read my next newsletter which will discuss why providing excellent customer service is important, even though you don’t have any competition.

What does your utility do?

Does your utility have innovative or unique customer service policies or practices? E-mail me at gsanders@logicssolutions.com to let me know and you may be featured in a future newsletter!

Is it time to review your customer service policy?

If you haven’t reviewed your customer service policy recently, please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could assist you with the process.

Click here to subscribe to my free e-mail newsletter

© 2013 Gary Sanders

Do you return deposits for good credit accounts?

In the past, I’ve written about requiring adequate security deposits. That issue touched on the subject of refunding deposits for good credit.

Generally, I’m not a proponent of returning security deposits until a customer closes their account. However, there are cases where adopting a policy of refunding good credit deposits makes sense.

Excessive interest on deposits

Some utilities are required to pay interest on deposits. In many cases, the interest rate they are required to pay exceeds what they are earning from investments.

For example, I’m currently working with a utility that is required by state regulators to pay 4% interest. If you know of a bank where they can invest their deposits and earn that kind of return, I’m sure they would love to hear from you!

In cases such as this, if the expense of the interest paid to customers exceeds their annual bad debts, refunding good credit deposits might make sense.

A bargaining tool with your board

Many utilities still do not require deposits of homeowners. I don’t recommend this and am a strong advocate of the best practice of requiring a deposit of every new customer.

If the only way you can get your board to agree to everyone paying a deposit is to refund good credit deposits after a period of time, then it makes sense to do so. There is no guarantee that every account whose deposit is returned for good credit will pay their final bill. However, it is still a chance worth taking over not having deposits for any homeowners, some of whom are likely to become bad debt accounts.

If you do refund good credit deposits

There are several things to keep in mind if you do refund deposits for good credit:

Insure your refund requirements are stringent enough that you aren’t refunding deposits for eventual bad debt accounts. For example, require a minimum of 24 months of good payment history. Each time your customer pays late, restart the waiting period.

Apply the deposit as a credit to the customer’s account rather than sending a refund check. This way you keep the cash as your customer works off the credit and you save your accounting staff the added workload of writing additional checks.

Verify that the customer doesn’t owe you any other bills. This could be utility bills for other accounts in their name or, for municipalities, unpaid taxes or parking tickets. If the customer does owe another bill, apply the deposit to that debt first and only refund the balance.

Finally, if you do refund deposits for good credit accounts, be sure your policy requires that all accounts on the cut-off list maintain a current deposit.

Update your customer service policy

If you make changes in your deposit policies, be sure to update your customer service policy to reflect the changes.

Is it time to review your deposit policies?

If you haven’t reviewed your deposit policies recently, it might be time to do so. Please give me a call at 919-232-2320 or e-mail me at gsanders@logicssolutions.com to learn how a business review could benefit your utility.

Click here to subscribe to my free e-mail newsletter

© 2013 Gary Sanders

What is your utility’s “corporate culture”…?

Three issues ago, I wrote about presenting a more customer friendly utility bill. This led a reader to ask “You advocate no-nonsense, tough policies with customers and yet, you write about being ‘customer friendly.’ How do you reconcile those two positions?”

We often read about “corporate culture” in the business world. I believe that utilities can effectively fashion an organizational culture that includes sound (some would say “tough”) business practices and policies while still being customer friendly.

Adopt sound business practices and policies

Most utilities, whether government agencies, non-profit entities or for-profit enterprises, operate as monopolies. This means your customers can’t take their business elsewhere and you have an obligation to provide a service at the lowest possible rates.

Maintaining the lowest possible rates requires operating your utility as efficiently as possible while protecting against losses. Losses for a utility can include theft of service or embezzlement, but most often are seen in bad debt accounts that must be written off.

Minimizing written-off accounts can be best accomplished by implementing policies and procedures that ensure:

I don’t believe enforcing fair and effective policies and procedures is at odds with being customer friendly if you have communicated these business practices to your customers. Failing to clearly inform customers of your policies and procedures is bad business and borders on deception.

Another imperative to being customer friendly is treating your customers equitably and applying policies fairly to all customers. This includes not granting special favors to influential or politically connected customers or friends and family members of utility employees.

Effectively publicize your policies and procedures

The key to informing your customers of your policies and procedures is to use all possible means to do so.  This includes:

It is possible to be “customer friendly” and operate an efficient utility

What is your utility’s organizational culture? Do you treat your customers fairly and hold them all to the same standards? Do you take advantage of every means possible to communicate your policies to your customers?

If you do all the things listed above, I believe it is absolutely possible to have an organizational culture that allows you to be both customer friendly and still operate a utility that adheres to sound business practices.

How does your utility measure up?

Is your utility is operating as efficiently as possible? Are you are as customer friendly as you could be?

If the answer to either of these questions is “no” (or if you’re honestly not sure of the answer), please contact me by calling 919-232-2320 or e-mailing me at gsanders@logicssolutions.com to see how I can assist you.

© 2012 Gary Sanders

Do you have a formal customer service policy?

Does your utility have a formal customer service policy? If you do, how recently have you reviewed it? Not just read through it, but reviewed it with an eye for revisions that reflect updated policies and procedures?

A formal customer service policy outlines the rights and responsibilities of both your utility and your customers. It describes what is expected of your customers and what actions you will take if they don’t comply. It should also define what your customer’s remedies are if they are billed incorrectly or treated unfairly.

If you don’t have a formal, published customer service policy, you have no way of insuring that all customers are treated fairly. Your customers, in turn, have no way of knowing what to expect from your utility.

Let’s look at a few key elements of an effective customer service policy…

Application for service requirements

When applying for service, do you require new customers to present photo identification or a lease agreement? If so, this should be stated in your customer service policy.

Will you activate service for a new customer the same day if the application is made before a certain time? Or will the customer have to wait until the next day to be turned on? Is there a fee for same day service?

Answers to these questions regarding initiating service should be listed clearly in your customer service policy.

Security deposit policies

Likewise, security deposit policies should be clearly defined. This is especially important if you don’t require the same deposit amount from every customer. For example, if you offer variable deposits based on a customer’s credit rating this should be clearly defined in your policy.

Policies regarding refunding deposits should also be included. Do you refund deposits after two years of good payment history? Or do you hold all deposits until the account is closed? Either way, your customers should be able to find this information in your policy.

Fee schedule

Similarly, your fee schedule should be clearly defined in your customer service policy. Customers should have no doubt how much you will charge if they bounce a check or are cut off for non-payment.

If you revise your fee schedule regularly, your customer service policy should be updated at the same time to reflect the revised fees.

Payment options

While it isn’t necessarily important to list all the different ways customers can pay their bills, many customer service policies include these. What is important, however, is to describe any expectations of your customers if they choose a particular payment option.

For example, if, after a certain number of returned checks in a specified period of time, you will no longer accept checks from a customer, this should be clearly noted in your policy.

Likewise, if you charge a convenience fee for certain types of credit card payments or require good payment history to sign up for bank drafts, these should also be included.

Delinquency and cut-off policies

One of the most important topics to be addressed in a customer service policy is your delinquency and cut-off policy.

How many days from the date of the bill does your customer have to pay before a late payment penalty is applied? How many days after that do you disconnect for non-payment? Will they receive a second notice? How much is the reconnect fee if an account is cut off for non-payment? Is this fee assessed to all accounts or only to accounts that are cut off? Will you make payment arrangements to allow customers to continue to receive service while paying off large bills?

The answers to all these questions should be clearly answered in your customer service policy.

Adjustment policies

If you offer leak adjustments for water leaks, the terms of such adjustments should be stated in your customer service policy. Likewise, if you offer summer sewer adjustments, these should also be addressed.

What if a customer is underbilled due to an error on your part? How far back will bill them and over how many months do they have to pay the difference. On the other hand, if a customer is overbilled, what will you do to correct the overbilling?

Again, the answer to all these questions should be addressed in your customer service policy.

Make your customer service policy available

In an effort to be customer friendly, I encourage you to make your customer service policy available to all customers, especially new customers.

Provide a copy to all new customers as part of a new customer packet. If it is a lengthy document, consider publishing a pamphlet with a synopsis of the key elements and give this to new customers.

And, of course, post it on your website, preferably as a downloadable link so your customers can print the full document if they so desire.

Do you have a formal customer service policy?

Does your utility have a formal customer service policy? Is it up-to-date? Please take a minute to respond to this quick survey on my Facebook page.

Is it time to review your customer service policy?

Is it time to review your customer service policy (or to develop one if you don’t have one)?

If so, please contact me by calling 919-232-2320 or e-mailing me at gsanders@logicssolutions.com to see how I can assist you.

© 2012 Gary Sanders