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Reducing Costs, Improving Service
When Ameritech initiated direct payment options for its customers in 1992 it
started as a program to provide enhanced customer service. The company sent Requests for Proposals (RFPs) to several banks. Chase Bank was chosen as the service provider because the software they developed became the proprietary property of Ameritech. Chase provided the programmers who took their ACH software and provided an interface to Ameritech's internal billing system. Starting in the state of Michigan, Ameritech used the state ACH association's joint application program to insert applications in customers' monthly bills. The same marketing approach was used in Illinois. By the time the service was offered in the state of Ohio, the state ACH association had boxes of applications for Ameritech, even before an insert was included with the customer's monthly bill. Customers had written Ameritech's name on applications received from other companies using the ACH association's marketing materials.
Carolyn Holley, Manager of Electronic Payment Systems at Ameritech, stated that the demographics of the customers using direct payment were
unexpected. The company anticipated that the customers using direct payment would be affluent and in the 30 to 50 year old age bracket. To Ameritech's surprise they found that senior citizens were heavy users of
this service. It is convenient for them to make payments even if they are traveling. Also, young married couples were using direct payment to manage tight household budgets. Ameritech now markets direct payment
services to all customers, regardless of demographics. Benefits to Ameritech include improved cash flow and error free processing. No longer does Ameritech have to deal with encoding errors on checks and incorrect
payments posted to customer accounts for those using direct payment. In addition, Ameritech has been able to reduce staffing costs by combining processes -- using
maging technology to capture information from the Customer's application and downloading the information into the direct payment system.
Mrs. Holley says that convenience is the biggest benefit to the customer. The company believes that getting correct bills to the customers and
posting their payments properly is the biggest facet of their side of customer service. With enhancements added to the system, and once the customer is set-up for direct payment, Ameritech is now able to
electronically post returned items with minimal human intervention, in what was previously a labor intensive process.
Since 1992, Ameritech has added third party bill services, charge-by-phone and a recurring credit card payment to its direct payment processing.
They also market their direct payment software to other companies starting an ACH program. The company is now working with a vendor to capture direct payment applications over the Internet. The information will be
verified by the vendor and downloaded into the direct payment system. Those customers participating in the recurring direct payment program can request to view their bills online via their Internet connection.
Ameritech is preparing to expand this service to include online bills for customers authorizing one-time direct payments. Through the use of ACH services Ameritech is improving customer service while reducing the
costs associated with payment processing.
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