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Pay by Text

SMS offers an alternative to paper billing. Smart Meters Driving Adoption Customer Engagement Supporting the Payment Process Learning from Europe

Fortnightly Magazine - February 2011

Text messaging promises benefits in customer service and bill-payment efficiencies. Utilities have been slow to take up the opportunities, but successes in other industries and among European utilities is opening the door to SMS transactions for American power companies.

It’s a multi-channel world. Consumers expect to have a choice in how they communicate with companies—by phone, web, email or chat—and now SMS is increasingly becoming part of customer service strategy. We have a tech-savvy generation Y—the ‘millennials’—that are home-owners and who are already used to e-billing and e-payments for Internet and cell phone use, so why not for power and water?

Yet billing for utilities is still mainly carried out on paper—a huge 63 percent for electricity providers, 64 percent for gas and 73 percent for water, according to a recent PayItGreen survey. But with green strategies currently at the forefront of many business agendas, research from NACHA found that twice as many 25 to 34 year-olds are now adopting paperless billing methods, and that consumers who have switched to an e-billing and payments system were reportedly more satisfied than those who continue using paper-based methods.

Many service providers—Internet, phone and financial services—are realizing the benefits of engaging with their customers through new channels, such as short message service (SMS) integrated into their customer service operations. SMS offers huge potential for utility companies as part of a customer service strategy, dramatically increasing the flexibility of their customer service processes and increasing efficiency as a result. So far, however, utility companies have been slow to take up the opportunities.

Technology analysis firm Gartner Group predicts the volume of SMS messages sent worldwide in 2010 will reach 2.3 trillion, with North America seeing the biggest compound annual growth rate between 2006 and 2010 to 318 billion.

Add to this the fact that over the next 10 years, half of all American households will have smart meters installed in their homes, according to figures from the Edison Foundation. Utilities recognize the need to start preparing to deal with these new technologies. Through the deployment of smart meters, consumers will be able to see precise detail around what time of the day, week and year they use the most energy. This increased information will put more pressure on utilities to deal with higher volumes of consumer information and will, in turn, drive the requirement for a new approach to engaging with their customer base.

One way in which they can do this is through new channels such as SMS.

While a recent report from the AITE Group predicts bills paid online will increase by 18 percent between 2010 and 2013, the number of bills paid with a mobile device is forecast to grow by a staggering 377 percent across the same period. By embracing SMS as an active part of their customer service strategies, utilities can

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