White Paper Enhancing the Customer Experience: Strategic Focus on Online Bill Payment and E-billing Generates Returns for AEP
Enhancing the Customer Experience: Strategic Focus on Online Bill Payment and E-billing Generates Returns for AEP In order to facilitate customer satisfaction and cash flow, billers need to make the customer bill payment experience as convenient and simple as possible. This means providing multiple bill payment options that include self-service options, as well as support for recurring, one-time and emergency payments. Billers can reduce costs and enhance the customer experience by making the online channel attractive by encouraging the adoption of e-bills and online payments. American Electric Power (AEP), one of the nation s largest providers of electricity, has achieved great success by designing online bill payment functionality geared to customer preferences and encouraging customers to turn off their paper bills. Focused on Providing Excellent Customer Experiences Headquartered in Columbus, Ohio, AEP consists of seven utility units serving more than five million customers in 11 states from Great Lakes to the Gulf of Mexico. The company issues more than 51 million bills each year, making billing and payment a significant function within its operations. In addition to being one of the most innovative utility companies, with a history of firsts in power generation and transmission technology, AEP is also committed to putting its customers first by providing superior service. To that end, AEP has a team in place to identify ways to enhance customer support and self-service. The dedicated team looks across the company, and out to customers to obtain the insights necessary to deliver improvements. Acutely aware that online account access, billing and payment are mission critical to customer satisfaction, the team focuses on the self-service channel. Understanding the Customer Bill Pay Experience AEP was interested in optimizing usability surrounding its online billing and payments. To transact an e-bill payment, customers had to click a link on the AEP website and connect to a third party website. The customers then had to login to pay their bill. By studying the user experience, AEP determined that customers were confused by the need to know and use two different sets of user ids and passwords to access account information and pay their bill. Customers would click on the pay bill link on the AEP website and then try to use their AEP user id and password instead of the bill pay user id and password and were denied access.
With a culture rooted in using innovation, engineering and technology to provide an excellent customer experience, AEP realized the need to extend this culture into not only developing but also promoting better technology for billing and payments. To reduce customer dependence on call center intervention and more expensive bill presentment and payment methods, AEP started an enterprise-wide initiative to enhance online bill payment and encourage adoption. The initiative was supported by AEP executive management and involved collaboration between customer service and other supporting groups. Harvesting Customer Insights to Build a Better Website Before embarking on a redesign of its website, e-bill and online bill payment functionality, AEP consulted its customers and conducted extensive usability testing. During focus groups, customers expressed preferences for wording related to bill payment, access to bill payment choices and registration processes. From the research, AEP identified deliverables: complement of bill payment options, enhanced the online bill payment experience and accelerated adoption of e-bills and paper turn off through targeted campaigns. Making it Easier for AEP Customers to Pay Bills Online According to the 2011 Household Billing Survey from Fiserv, the majority of consumers who had visited the website of a service provider had done so to pay a bill (Figure 1). These findings align with the path AEP customers were taking when visiting the AEP website. Eighty-four percent of AEP site visitors went to billing and payment related pages. However, a disconnect occurred for some AEP customers because although they could sign in and see their bill at the AEP site, if they clicked the link to pay, they had to have a separate login to actually pay the bill. Figure 1: Two-thirds of Respondents Visited the Site of a Biller to Whom They Make a Payment - Mostly for Billing and Payment For which of the following reasons did you visit a biller s website? Single sign-in for account access and bill pay To pay a bill 70% Simplified bill payment Streamlined e-bill registration Increased findability and customer service functionality To access a monthly invoice or view billing payment or view billing payment history To use online self-service options like service requests or address change To contact customer service 15% 20% 49% AEP is focused on supplying energy and providing customers with an excellent experience across all touch points. AEP partners with Fiserv to provide billing and payment channel technology and supports AEP with a broad, single-source range of billing and payment channels. Together, AEP and Fiserv built a full To learn more about service or get tips To take advantage of marketing offers 8% 7% Source: 2011 Billing Household Survey, Fiserv, Inc. 1
Key to improving the customer online bill pay experience was elimination of the double login and perception of navigating away from the AEP site to pay a bill. Implementation of Biller Direct HV from Fiserv, deployed as a hosted solution, provided the flexibility AEP needed to effectively integrate robust billing and payment functionality with a more intuitive user interface that eliminated the need for additional logins and keeps customers on the AEP website. Deployment of Biller Direct HV gave AEP the ability to improve not only the look and feel of its web site, but also enhance usability to address customer needs and preferences around billing and payments. SMART Options Help AEP Customers Select Best Payment Choice Prominent placement of billing and payments options including paperless billing on the home page, user-friendly layout and language for the billing and payments landing page are components of the AEP website. As a leading utility company, AEP knows that when it comes to enhancing the customer experience, knowledge generates power. AEP uses customer information to deliver a custom experience. Now, when AEP customers log in to view their account, bill payment options are presented in an order that corresponds to their account status. If a customer s payment is due or past due, expedited payment options are presented at the top of the list. they use can change due to reasons such as availability of funds and payment due dates. In fact, 20 percent of consumers will change their payment practices on a month-to-month basis (Figure 2). Almost as many are likely to switch between bank bill payment and biller direct bill payments because they sometimes prefer to pay bills by credit card, while 47 percent do so to make a last minute or emergency payment. To satisfy the range of customer payment needs and preferences, AEP offers: Online billing and payment at its website E-bill delivery at over 3,000 banks and credit unions Recurring payments On demand, expedited payments (non-registered) Mail Payments Walk-in payments (in person) Phone payments (credit/debit cards) Figure 2: Consumers Frequently Change the Way They Pay Monthly Bills What causes you to change how you pay bills? Availability of funds Date payment is due Depends on amount owed Payment would have been late Depends on forms of payment biller accepts 29% 25% 41% 54% 63% Satisfying Customers Billing and Payment Needs Depends on funding account 23% According to the 2011 Household Billing Survey from Fiserv, three out of four online consumers believe it is important for billers to provide multiple billing and payment options. And, although consumers consistently visit biller websites for billing and payment purposes, the funding sources and payment methods Decided to pay biller in person 14% Source: 2011 Billing Household Survey, Fiserv, Inc. 2
In the utility business, recurring payments, on demand payments and paperless billing hold special importance for sustaining cash flow. Recurring payments allow consumers to set up monthly, automatic payments. According to the 2011 Household Billing Survey from Fiserv, 42 percent of consumers who have set up recurring payments have done so using a biller s site and 29 percent use recurring payments to pay their electricity bill. On demand expedited payments satisfy the needs of a variety of consumer segments that prefer to make a payment without registering; customers who are in a hurry, those that need to make an emergency payment, or want to make a one-time payment. There is also a segment of consumers who simply want to avoid the registration process, because it s a one-time occurrence or perhaps because they think it is a hassle (Figure 3). Figure 3: 12.5 Million Consumers Paid a Bill at a Biller s Site without Registering For a Username and Password Why did you elect not to register for a user name and password when you paid that bill? Please mark all that apply I only wanted to pay the bill that way once Registering takes too much time and hassle I don t want to remember another user name and password I missed a payment due date I don t want more email solicitations Source: 2011 Billing Household Survey, Fiserv, Inc. 13% 20% 19% 35% 52% In addition to meeting the needs of customers who fall into any of these categories, on demand payments enable AEP customers facing disconnect to avoid shut-off while also providing an option for those who want to pay using a credit or debit card. While the majority of billers recognize the institutional benefits of e-bills, consumers have been slower to adopt paperless billing than electronic bill payment. Only 38 percent of consumers who receive bills online at a biller s site no longer receive a paper bill. To help shift more customers from paper to e-bill, AEP designed an e-bill landing page that clearly explains the environmental impact of e-bills and features an engaging video. Website functionality enables customers to go paperless in just three clicks. AEP also offers customers who prefer to pay their monthly bills at their financial institution website the ability to receive paperless AEP e-bills there as well. Data from the 2012 Household Billing Survey from Fiserv shows different consumer segments elect to receive e-bills through different channels for different reasons (Figure 4). Consumers who manage their financial lives through online banking prefer to receive e-bills at the same place they pay them for the organization, convenience and personal financial management benefits the service delivers. By offering customers choices to satisfy their individual billing and payment needs and preferences, the survey research found improved impacts on the biller relationship among customers who receive e-bills at their bank website. Additionally analysis from New York based utility Con Edison demonstrated more positive levels of arrears from bank e-bill customers versus paper and biller direct billing customers, most likely due to reminder features within the online banking user interface. 3
Figure 4: Different Value Propositions for Receiving E-bills at Bank Sites and Biller Sites Bank E-bill Users: Which of the following reasons was most important in your decision to begin receiving bills using your bank s bill pay service? Convenience viewing paying bills and clicking to pay in one step I get an email reminder each time I have a new bill due 31% 69% Initiative Makes Electronic Bills the Standard For customers starting service via an AEP website, paperless billing is the default selection. The user is presented with radio buttons, with the paperless option pre-selected. The website provides information about the billing options so customers can make informed decisions. To opt-out of e-bills, the customer must click the paper bill option. To help make my finances more organized 27% Campaigns to Existing Customers Promote E-bill Adoption To receive and pay all of my bills at one site 27% Biller Direct Users: Which of the following reasons was most important in your decision to view bills online at biller sites? Convenience all I have to do is click and pay Viewing bills electronically saves paper and energy I can view the bill online along with an email to remind me to pay 11% 21% 30% AEP was aware that some customers had yet to turn off paper bills due to inaction or a lack of information. As a utility company with a geographically-defined customer base, AEP was not in the regular practice of conducting outbound marketing. To spur adoption of e-bills, AEP worked closely with Fiserv to integrate e-bill messaging and incentives into cross-channel marketing campaigns. Collaborating with Fiserv, AEP developed and implemented marketing campaigns to support AEP s strategic plans. As a result of educating its customers on the benefits of e-bill and incenting them to try paperless billing, AEP has been able to encourage more customers to discontinue their paper bills. No more stacks of paper 11% Growing E-Bills From the Inside, Out Source: 2011 Billing Household Survey, Fiserv, Inc. With 600 employees handling 18 million calls per year across six virtually-operated call centers, it was critical for AEP to engage its customer service associates (CSAs) in promoting the e-bill service. To generate excitement and to help prepare CSAs to serve as e-bill advocates, AEP used employee-focused promotions: 4
e-bill branding contest for associates more than 3,000 employees submitted ideas were submitted for branding the AEP e-bill service. Flip the Switch GO Paperless was selected as the winner (Figure 5). CSA Sweeps and Customer Solutions Center (CSC) promotions newsletters, email and daily bulletins along with contests helped generate excitement and educate CSAs on the e-bill service Energy Assistance Donation Plus Promotion for each customer who activated an e-bill, AEP donated $1 to its energy assistance funds to help families experiencing economic hardship keep their power on, and the customer was entered into a drawing for one of several prizes Figure 6: College Football Ticket Promotion Figure 5: Associate e-bill Branding Contest Winning Entry Customer Enrollment Campaigns Get Personal AEP also leveraged Fiserv s e-bill marketing expertise and best practices to create a comprehensive external marketing program of affinity campaigns and promotions. The programs incorporated community themes. While the results varied by campaign, AEP saw spikes in e-bill enrollment ranging from 28 percent to over 400 percent during specific promotions. AEP also included e-bill messaging in new customer handbooks, customer newsletters and during its on hold recording for customers in the call center queue. Paperless billing messages appeared on paper bills and envelopes and via social media posts. Targeted email campaigns were also very successful. College Football Ticket Promotion using the Go Green, Go Paperless image, AEP promoted e-bill through local promotions giving customers the chance to win college football tickets by enrolling in e-bill; based on the success, AEP used other seasonal promotions to drive residential e-bill enrollment. 5
The Results: Sustained Double-Digit e-bill Enrollment and More Since launching the Fiserv online billing and payment solution and integrated marketing program in May 2010, AEP has achieved significant results. Compared to typical campaigns which deliver a one-time spike in activations, AEP achieved ongoing performance, in terms of increased paperless adoption, from its e-bill initiatives including a 45 percent sustained increase in monthly net growth in residential paperless billings (Figure 7). Figure 7: Total AEP Net E-bill Enrollments (January 2010 December 2010) Additionally AEP experienced a 24 percent increase in AEP website visits during the online billing and payment campaigns (Figure 8). Figure 8: Total AEP Website Visits (January 2010 - December 2010) Total AEP Website Visits Average Post BDHV +24% Average Pre BDHV Jan Feb March April May June July Aug Sept Oct Nov Dec Net E-bill Enrollments Average Post BDHV +45% Average Pre BDHV Jan Feb March April May June July Aug Sept Oct Nov Dec Source: Enhancing the Customer Experience: Strategic Focus on Online Bill Payment and E-billing Generates Returns for AEP, Fiserv Inc., 2012 AEP also realized a 31 percent increase in logins by registered users during the campaign performance time period which helps the company promote other online self-service and marketing programs (Figure 9). Source: Enhancing the Customer Experience: Strategic Focus on Online Bill Payment and E-billing Generates Returns for AEP, Fiserv Inc., 2012 Figure 9: AEP Total Website Logins (January 2010 - December 2010) AEP Website Logins +31% Average Pre BDHV Average Post BDHV Jan Feb March April May June July Aug Sept Oct Nov Dec Source: Enhancing the Customer Experience: Strategic Focus on Online Bill Payment and E-billing Generates Returns for AEP, Fiserv Inc., 2012 6
In addition to higher online bill pay adoption rates, increased website traffic and sustained e-bill enrollment, AEP cited the following top business benefits after implementing Biller Direct HV: Higher customer satisfaction with e-billing Fewer online billing and payment related calls to the customer support center AEP Customers Respond Positively to Enhanced E-billing Solution I just wanted to say I really like the new website. It was very easy to sign up for bill pay and access my information. This is awesome! I really wish others would follow what you are doing. Ohio Customer Follow the Leader: Lessons for Other Billers In less than a year, AEP was able to generate and sustain double-digit enrollment figures in both online bill payment and e-bill. For other billers that are interested in making online billing and payment an enterprise strategy, AEP s leadership in utility company bill payment provides the direction and insight necessary to garner internal support for investment in online billing and payment. To get started, billers can follow AEP s lead and focus on customer service by choosing to work with a proven partner to develop a comprehensive online billing and payment program that combines state-of-the-art technology and cross-channel marketing campaigns. I really love your website and found it VERY helpful. Got some great tips on energy savings while registering my account and setting up paperless billing! Texas Customer I just wanted to tell you how much I love your new website. It is much more user-friendly and easier to navigate. Thank you for taking the time to make my bill paying experience even easier. Oklahoma Customer As a leading provider of online billing and payment technology and expertise, Fiserv can help you build a comprehensive online bill pay and e-bill strategy that generates results. If you would like to learn more, please contact your Fiserv representative. I am very pleased with the new online billing and payment method. It is very simple and easy to navigate. Well done! Virginia Customer 7
About the Author Eric Leiserson is a Senior Research Analyst at Fiserv. His responsibilities include the development of consumer related electronic billing and payment research, adoption strategies and marketing programs for Fiserv. He has conducted numerous primary research projects and webinars in the areas of green marketing, consumer segmentation, longitudinal surveys, web usability and focus groups. Prior to joining Fiserv in 2004, Leiserson held marketing and sales positions at Unisys Corporation and Intuit. About Fiserv As the global leader in financial services technology, Fiserv is driving innovation in Payments, Processing Services, Risk & Compliance, Customer & Channel Management, and Insights & Optimization, and leading the transformation of financial services technology to help our clients change the way financial services are delivered. Visit www.fiserv.com for a look at what s next, right now.
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