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Improving Customer Service
How does a company improve customer service without increasing costs? Bay State Gas Company, a New England gas utility company serving both
residential and commercial customers, used ACH automated direct bill payment to make it more convenient for their customers to pay their bills.
This would allow them to acquire new customers, while retaining existing customers.
Starting in 1989, Bay State Gas started offering ACH automated direct bill payment on a test basis. According to Susan Melo, Cash Management
Analyst, customers were initially notified of the new service through marketing inserts included with their monthly bills. The insert included a form for the customer to complete and return. In 1992, the program was
offered to all customers, again using marketing inserts included with monthly bills.
To increase customer participation in the direct bill payment program, Bay State Gas was one of the first companies to join a NEACH (New England Automated Clearing House) ACH automated bill payment task force in 1993.
NEACH provided Bay State Gas with coordinated mailings to customers and was responsible for making sure forms and marketing literature were accurate
for all participants in the task force. The Association was able to secure discounts for printing and postage and also handled the mail receipt and distribution of returned forms to the appropriate company. Once the
forms were received, Bay State Gas was responsible for setting up the customer on their billing system. Susan says response rates and customer participation increased using the NEACH program.
Currently, five percent of the company's customers use the automated direct bill payment service. Although it has not significantly improved cash
flow, the program has succeeded in improving customer service by offering different payment options to Bay State Gas's customers. Ms. Melo said that analysis of customers using the ACH direct bill payment program
revealed that they were generally the ones who paid their bills when received.
The utility uses a lockbox to receive payments and process payment checks. They no longer pay monthly processing fees on the approximately 9,500
(5%) payments received via the automated bill payment service each month. The customer benefits include convenience, postage savings and check processing savings, without incurring offsetting costs in the form of
other bank fees or third party bill payment costs.
Bay State Gas developed its own software to retrieve information from their internal billing system. The information is then formatted and sent to
their bank for warehousing and processing on a specified date. This allowed Bay State Gas to accurately forecast cash flow for the customers participating in the program.
To process 'Ad Hoc' billings (one time or special payments), transactions requiring a change or expedited processing, the company purchased software
from their bank, BankBoston. This allowed Bay State Gas to process changes and customer requests quickly, something they had not been able to do prior to purchasing the additional software
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