What began as a move to expedite credit card payments has improved revenue and kept the power on for more customers
Sand Mountain Electric Cooperative, an electric distribution utility serving over 30,000 members in northeast Alabama, reports improved payment processing efficiency and reduction of uncollectible accounts in its first year after integrating an interactive voice response (IVR) system from utility-focused software developer SEDC.
The rise in credit card payments drove the utility’s original move to an automated system. “As soon as we started accepting credit card payments, the processing challenges became more than we could handle,” said Lisa Greeson, supervisor of information systems for Sand Mountain. “Lines at cashiers grew. We were spending so much time on the phone, we couldn’t serve our customers.” The federal government’s move to provide social security benefits on preloaded credit cards also drove more members to pay by credit card. “This was a big reason our call volume went up, too,” said Greeson.
When the IVR went live in May 2015, “It took a huge load off cashiers, who no longer needed to key in data manually, one customer at a time,” said Greeson. While a cashier can take only one call at a time, IVR can handle an infinite number of calls simultaneously. A customer calling directly to the IVR number need never face a busy signal, be put on hold or need to be transferred. IVR also met a need to better serve a growing community of Spanish speakers, who can now select that language option instead of waiting for the utility’s one bi-lingual cashier to complete their transactions.
By the second month of use, more than 1,700 customers paid by IVR. Members can also pay via the co-op’s website or at offices across the service territory. As of March 2016, more than 1,990 payments were by IVR. “So usage has been steady and gaining momentum,” said Greeson.
Since Sand Mountain added IVR services for prepay and debt management customers, “Cut offs have been reduced dramatically,” Greeson said.
IVR lets prepay customers opt into a choice of text messages to tell them things like how much power they have used in a given day or to alert them when their balance reaches a certain level. For customers facing a financial crunch, this can help them manage costs and avoid disconnection for nonpayment.
Sand Mountain, which pays roughly two cents a message per customer, sees the expense as a worthwhile investment in empowering consumers, according to Greeson. Before IVR, the disconnect notices — a legally required series of timed, written notices about impending power termination — were the only communication to a customer before cutoff. The text messages give prepay customers who opt in more reminders and more information, enabling them to act — by either cutting their power use or sending payment instantly — to avoid disconnection.
Once cut off, a traditional customer typically must repay the full debt, pay a deposit of perhaps several hundred dollars to reestablish credit and pay a substantial reconnection fee before power is restored. Customers entering the prepay/debt management program can pay lower reconnection fees ($20 to reconnect; $40 into credit) and they regain power first and then repay their debt over time. Sand Mountain has configured their debt management program to allot 70 percent of future payments toward the customer’s actual usage and 30 percent to retiring the unpaid balance. Once the debt is paid 100 percent goes to usage and there are no late or reconnect fees.
When a prepay customer dials the IVR to pay, their account instantly reflects the payment – often allowing them to avoid disconnection. If it is a payment following disconnection, Sand Mountain’s system will automatically restore power within seven minutes of payment. “The phone line is open from 1 a.m. to 11 p.m. daily,” Greeson said. “You could call in a payment at 10:45 p.m. and have power back on before 11.”
Today, 1281 members participate in the prepayment program and 250 in debt management. Since introducing IVR, Sand Mountain’s uncollectible revenue (defined as payments more than ninety days overdue, for amounts of $25 or more) has also dropped by as much as a third.