The utility company customer service dilemma
by Phil Hardwick
Published: June 12,2011
Today I received an email that contained the monthly bill from one of the utility companies that provides service to my residence. I immediately went online the Internet to my bank account, verified that my paycheck had been electronically direct deposited, checked my account balance and paid the utility bill. I did not stand in any lines, fill out any deposit slips, endorse any checks, lick any stamps or have contact with another human. Technology has changed my customer service experience with most of my utility companies. And yet, as efficient and positive as it is for me there is another perspective when it comes to customers and utility companies.
Once upon a time when I was working at a large utility company an issue arose about how to persuade customers to pay their bills in ways others than paying a personal visit to a customer service center. Internet transactions as we know them now were still a few years away, but automatic bank drafts were common. Most customers paid by check. Many customers still took the time and trouble to personally visit a utility company’s office or payment center to pay their bills. The cost per transaction for the utility company, and thereby its customers, is high relative to mail and bank draft payments. Customer service representatives must be hired, trained and employed and a physical office must be provided.
I took it upon myself to research the issue of why customers preferred a personal visit to pay a bill. In doing so I learned a lot about customer service.
So I got in the car and drive to the Mississippi Delta – to a town in the heart of the Delta. A lot of customers in the Mississippi Delta still pay their bills in person. After visiting with the district manager and letting him know the purpose of my visit I parked in a chair in the lobby area of the office. I observed and listened as customers came in to pay their bills. For many, there are problems or issues. Some were paying for others. It was fascinating to watch the company’s customer service agent handle each customer’s special situation. For some it was a delayed check that they were to receive. For others it was a story that no one could really believe. Whatever the case, the customer service agent gave an understanding nod and took whatever money the customer could pay at the time. A man came in and paid cash. The customer service agent later told me that he had a regular job, and got paid by check. Nevertheless, he went to the bank and cashed the check, not depositing any money into his meager account. “He doesn’t want his wife to know how much he makes,” she said.
Eventually, the proverbial little ole lady – I’ll call her Ms. Smith – strolled in to pay her bill. I detected a slight bit of stiffness in her leg, as she limped ever so slightly. I wondered why she would personally come to the office to pay a bill. After she completed her transaction I followed her outside, identified myself and asked the obvious question, “Mam, why did you come to the office to pay your bill in person when you could have mailed a check or paid through a bank draft?”
She studied me for a moment, and then said matter-of-factly, “Because Sandra always asks about my arthritis.”
I realized immediately that her financial transaction more than that. It was really a social transaction. Paying her utility bill was only part of the reason that she had taken the time to personally make the short trip to the local office of the utility company. I went back inside and observed Sandra and her interaction with customers. She seemed to know every customer by name, as well as something about them. When a customer had a complaint or issue about the bill she expressed surprise, and said something like, “Oh my goodness. Let’s see what can be done about that.” In short, she had a way of making the transaction a positive experience.
And therein lies the dilemma for today’s utility companies and for that matter other companies that have any kind of a payment center. Companies need to be efficient; some customers want personal face-to-face service.
Utility companies, whether they are private companies, cooperative associations or government-owned utilities, constantly strive to provide the best customer service experience for their customers. For any utility company, customer service is a top priority. Some would say that this is surprising given that utility companies have a virtual monopoly. After all, except in extremely rare situations a customer cannot switch service to a competitor. But the difference in utility companies and many other companies is that utility companies are highly regulated. Many of the regulators are elected officials, and those officials receive contacts from their constituents (customers).
As the transition continues to occur from the personal customer service experience to the more efficient, less costly electronic customer service experience there will certainly be conflict over closing of local offices where personal interactive customer service transactions take place. And even though thousands and thousands of other customers will prefer online transactions, I don’t think the either Sandra or Ms. Smith will like the outcome.
Phil Hardwick is coordinator of capacity development at the John C. Stennis Institute of Government. Contact Hardwick at firstname.lastname@example.org.
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