1. 2016 Benchmarking Insights Conference Boulder, CO
Billing
2016 Benchmarking
Insights Conference
Boulder, CO
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2. Agenda Overview Coverage of the Study for Billing
Process Model for Bill For Service
2016 Key Findings / Points of Emphasis
Performance Profiles
Cost and Service
2016 Benchmarking Results
Functional-specific findings (Cost, Volume, Practices)
Areas of Focus and Opportunity

3. Overview

4. 2016 CS Benchmark Questionnaire structure
Field Service
Change of Account
Billing Field Orders (meter investigations)
Credit Field Orders
Order Management
Customer Contact
Contact Center
Local Office
Self Service
Contractors
Credit Inbound calls
Revenue Management
Credit Office and Outbound calls
Credit Field and Inbound Contact Policies
Revenue Protection: Office and Field
Back Office
Billing
Billing Field Policies
Payment Processing
Meter Reading
Manual
Mobile AMR
Fixed Network AMI
CS Support and CS IT
Employees: Safety, Staffing
Customer: Customer Satisfaction, First Contact Resolution, Customer Experience, Key Account Management,
Energy Efficiency , Outage Communications
Areas excluded:
Meter Change-out

5. Bill for service Determine Rate And Create Account In Customer System
Read Meter
Process Meter Read
Create Bill
3% of every bill going out the door requires manual review; emphasis on ebill adoption compared to amount of growth – not in alignment; about ½ of bills are being corrected in office. What types of corrections are happening?
no change to cost over five years. The customer getting the bill is the evidence that you fixed the issue. Most work errors by first in / first out. From customer service point of view.
Estimations are growing – related to exceptions correct in office? Meter reading is 99% accurate, but processing 3% of bills, estimating 4.5%.
Ensure Accuracy And Send Bill

6. Key Findings / Points Of Emphasis
Volume
4% of all bills have an exception worked
eBill adoption continues a slow steady climb for most
Cost
Costs are consistent
Service
Exceptions aren’t being worked by bill cycle everywhere
Paper bills have an opportunity to improve
3% of every bill going out the door requires manual review; emphasis on ebill adoption compared to amount of growth – not in alignment; about ½ of bills are being corrected in office. What types of corrections are happening?
no change to cost over five years. The customer getting the bill is the evidence that you fixed the issue. Most work errors by first in / first out. From customer service point of view.
Estimations are growing – related to exceptions correct in office? Meter reading is 99% accurate, but processing 3% of bills, estimating 4.5%.

7. 2016 Benchmarking Results

8. Billing Performance Profile
Cost, exceptions and paperless performance are steady
Estimation levels are higher (change in panel)
2015YE
2014YE
Mean Q1 Q2 Q3
Bars
Billing Cost
Billing Cost Per Account * Commodity
$7.09
$5.44
$5.85
$6.65 29
$6.05
$5.03
$5.70
$6.56 16
Billing Cost Per Bill
$0.70
$0.48
$0.54 28
$0.75
$0.55
$0.63
$0.73
Postage Cost per Paper Bill
$0.430
$0.400
$0.418
$0.448 27
$0.435
$0.378
$0.443
$0.465
Service Measures
Bill Accuracy - Percent Of Bills Adjusted After Sent To Customers
0.778%
0.180%
0.398%
0.502% 22
0.240%
0.098%
0.159%
0.309% 8
Internal Measures
Percent Of Bills That Are Estimated
14.99%
1.94%
5.06%
26.24%
4.39%
0.82%
1.28%
4.19% 14
Non-Paper Bills Issued
19.2%
21.7%
17.7%
16.3%
18.5%
22.6%
16.1%
14.4% 17
Percent of Bills mailed within billing window
97.6%
99.2%
98.0%
97.9%
99.0%
100.0%
99.7%
99.4% 13
Demographics
Billing exceptions processed as a % of Total Bills
3.9%
1.6%
2.0%
3.8%
3.5%
1.2%
2.2%
4.6%
Bills Issued per Account
11.34
11.80
12.01
12.12
11.22
11.59
12.00
12.18
Billing FTEs per 100,000 Accounts * Commodity
4.34
2.13
3.99
5.49
3.03
1.83
2.68
4.10 24

9. Cost comparison Total 2015 CS Cost Excluding Write-offs Billing
Community Mean = $7.09
Community Composite
Community Composite
Billing represents 19% of all customer service spending. That’s the 3rd highest cost area. So it’s reasonable that companies are trying to reduce this area. Of Billing costs, 44% are labor and 46% are postage. So naturally, companies are looking hard at reducing spending in these two areas.
Costs are per Accounts * Commodity

10. Quartile performance remains consistent
BILLING COSTs
Mean costs have risen 17%
Billing Costs per Account * Commodity
During that same time period, Billing Cost per Customer has remained flat with some fluctuation, but no real increase or decrease. At the same time spending in other CS areas is (increasing/decreaseing/flat?)
Mean
$7.09
Quartile 1
$5.44
Quartile 2:
$5.85
Quartile 3:
$6.65
Quartile performance remains consistent
BL Page 3 – FL5

11. Drivers of billing costs
Labor and postage dominate the per bill costs (mean down 6%)
45% Labor - 49% postage
Billing Costs per Bill
Billing Costs Allocation
Mean
$0.70
Quartile 1
$0.48
Quartile 2:
$0.54
Quartile 3:
BL Page 8 – FL5 / BL5
BL Page 12 – FL5

12. Impacts on costs (labor and postage)
It isn’t one or the other (labor or postage), it is the combination that will drive costs lower (labor and postage)
Driver Of Labor
Driver Of Postage
BL Page 8 – FL5 / BL5
BL Page 12 – FL5

13. Non-paper penetration and demographics
Paper only is still dominant at 81%
Companies 28, 40 & 50 automatically sign new customers up for Ebill
Bill Delivery Methods (% of Bills Issued)
When signing up a new customer, what is the standard approach? 28
Electronic bill: the customer has to opt out
10.71%
Paper bill: the customer has to opt in for electronic bill
85.71%
Methods for signing up new customers? 25
CSR attempts to sign up customer
84%
CSR provides info while on the phone
80%
Provide info about electronic billing in IVR messaging
32%
What are the actual cost savings associated with an increase in customer adoption? The average utility issues 18% of bills electronically. That equates to 3 million bills a year. At 43¢ per stamp that’s a savings of $1.27 million. That’s real money and a savings the average utility has already seen.
BL Page 15 – BL5

14. Electronic Bill Adoption
5 companies primarily utilize as the delivery method
Percent of Bills Issued Electronically
In the past 5 years, electronic bills issued has increased from 10% to 17%. That’s a 70% increase. But in the last
Mean
19.2 %
Quartile 1
21.7 %
Quartile 2:
17.7 %
Quartile 3:
16.3 %
Growth continues at the same steady pace (4% from last year)
BL Page 16 – BL5
BL Page 15 – BL5
= Auto Enroll In eBill

15. Typical High Level billing process (Pre-bill)
Read Meter
Conduct Pre-Bill Process
Accept Read
Generate / Distribute Bill
Read Meter
Manual Review
Accept Read
Most of the work associated with calculating and printing a bill is automated. So you’ve already invested in a CIS or billing system that does a lot of the work for you. So the people that work in billing are handling what? Exceptions.
Exceptions drive cost – but are they getting you anything. Bang for buck of handling exceptions. Cost for handling – how much was noticeable to the customer.
Take 10 exceptions from each person each day; chart where each exception and where it goes.
Then take all the manual
Did you save a phone call – you estimated the bill and now they call – if it had been inaccurate would they have called.
Schedule
Order
Generate Order

16. Billing window performance
Even with a range of 1 to 5 days in the billing window, all but 6 companies deliver bills “on time” 98% of the time
Mean
94.0 %
Quartile 1
98.6 %
Quartile 2:
98.0 %
Quartile 3:
97.3 %
BL Page 77 – BL190
BL Page 76 – BL190

17. BILLING EXCEPTIONS PROCESSED
3.8% of all bills are being handled manually.
The average utility handles 352,105 exception per year.
Exceptions as a % of Bills
Exceptions Handled
Mean
3.88 %
Quartile 1
1.57 %
Quartile 2:
1.96 %
Quartile 3:
3.83 %
Mean
352,105
Quartile 1
139,592
Quartile 2:
245,698
Quartile 3:
554,939
The average utility works 400k exceptions a year. That’s about 3.5% of bills that are being handled manually by all of those billing folks.
BL Page 42 – BL90 / BL5
BL Page XX – BL90.1

18. BILLING EXCEPTIONS Cycle Time
Office based investigations are typically done in 3 days
Field based investigations take 9 days
The average utility works 400k exceptions a year. That’s about 3.5% of bills that are being handled manually by all of those billing folks.
BL Page 65 – BL150
BL Page 66 – BL150

19. ORDER THAT BILLING EXCEPTIONS ARE PROCESSED
The bill is the “evidence” that you took care of the issue.
Calls, orders and more exceptions are the result if not completed.
Total Respondents 27
First in
37.04%
Last in 0%
Priority based upon amount
3.7%
Priority based upon customer type
Based upon billing cycle
BL Page 53– BL115
Errors – first in first out – number of times the customer has to call to address a billing errors
Most calls to the call center generate a back office order

20. BILLING FTES to Exceptions Handled
Billing organizations are staffed to handle exceptions within billing windows (Field Organizations typically are not)
More Exceptions Larger Staff
FTEs per Account * Commodity
% of accounts looked a
Mean
4.3
Quartile 1
2.1
Quartile 2:
4.0
Quartile 3:
5.5
Fewer Exceptions Smaller Staff
SF Page 54 – SF40
SF40 to BL90

21. Bill Design

22. Bill redesign is an initiative for 42% of our companies
Have you redesigned your bill format recently? 28
Yes paper bill
17.86%
Yes electronic bill
Planning for the future
28.57%
No neither
57.14%
BL Page 80– BL250
Errors – first in first out – number of times the customer has to call to address a billing errors
Most calls to the call center generate a back office order

23. Bill Design – The Good
A well-designed utility bill enables customers to easily identify and understand key information, such as the amount due.
Charges should be clearly stated and understandable for all.
Use of color and font can draw attention to ‘need to know’ information the customer is typically searching for when scan-reading their bill.
Including graphs and images to present data can encourage customer engagement. Utility bills without graphs and images may contribute to reduced interest levels.
‘Need to know’ information that customers generally look for should stand out more, making it is easy to find. Less important information should not distract customer attention away from key information.
Important information should be on the front of the bill and lower value information should be located on the rear of the bill ideally.
Source:

24. Bill Design – The bad
Important information can be buried within a myriad of text causing customers to lose interest or misunderstand their utility bill.
Small font on a utility bill can make it hard to read for some customers and cause them to potentially contact the utility company to gain further information, increasing the utility company’s ‘cost to serve’.
Using unexplained jargon within a utility bill can add to customer confusion and may lead to customers possibly failing to act on consumption information to find an optimum tariff and / or being expensive to serve by regularly contacting the company to query information.
Source:

25. Bill Design – Key Points To Consider
A simple, well explained bill can reduce customer enquiries to utility companies’ call centers and build strong customer relationships.
Good utility bill design makes it easier for customers to understand key information, such as their usage, the amount due and potential ways to save money.
Utility bills should avoid jargon words and including large groups of text which are difficult to comprehend at first glance.
Utilities have a responsibility to review and improve bill design where possible.
“A bill is a key communication tool for utilities and careful consideration should be given to design.”
Source:

26. Sample Bill - CPS

27. Sample Bill – PSE&G

28. Sample Bill – PSE&G

29. Sample Bill - Lakeland

30. Sample Bill - Tacoma

31. Sample Bill - Tacoma

32. Sample Bill Tacoma

33. Sample Bill - DTE

34. Sample Bill - DTE

35. Sample Bill – First energy

36. areas of Focus and opportunity

37. areas of Focus and Opportunity
Volume
Billing Exceptions Processed (BL90) – know how many and what type of exceptions you’re handling.
Cost
Billing Labor (FL5) – what are getting for your labor spend?
Service
Continue to re evaluate your bill

38. Thank You for Your Input and Participation!
Your Presenters
Ken Buckstaff
Debi Cook
Gene Dimitrov
Rob Earle
About 1QC
First Quartile Consulting is a utility-focused consultancy providing a full range of consulting services including continuous process improvement, change management, benchmarking and more. You can count on a proven process that assesses and optimizes your resources, processes, leadership management and technology to align your business needs with your customer’s needs.
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