New Podcast: Say Goodbye To Late Payments

In the dynamic world of utilities and billing, managing late payments remains a critical challenge. As late payments strain cash flow and customer relationships, it becomes essential for utilities and billers to implement effective strategies to mitigate these issues. In this informative blog post, we present a transcript of our latest KUBRA podcast episode, highlighting key insights and actionable strategies for preventing and collecting late payments.

Stay ahead of the curve by diving into the detailed strategies below. And for those who prefer an audio experience, you can also listen to the full podcast episode. 

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Shaun Jackson:  Well, hello everyone, and welcome to our latest podcast episode. My name is Shaun Jackson, Senior Vice President of Marketing at KUBRA. Today we're diving into a topic that keeps many utilities and billers up at night, and that is the management of late payments.

Recently, we covered this in a comprehensive webinar and want to share some highlights with you. I'm so excited that today joining me is Cali Johnson, Senior Product Marketing Manager at KUBRA, who originally presented the webinar. Cali, thrilled to have you here. Welcome to the podcast.

Cali Johnston: Thank you, Shaun. Really excited to be here and to share some takeaways with everyone.

Importance of Managing Late Payments

Shaun: That's great. I can't wait to hear. So, Cali, let's dive right in. But before we get into strategies, can you explain why managing late payments is such a critical issue for both utilities and billers?

Cali: Definitely. That is the perfect kickoff question. Managing late payments is essential for a lot of reasons. But what all those reasons boil down to is number one, cash flow management, and number two, customer relationships. Having the funds to cover all your operational costs is obviously extremely important. But just as important is avoiding service shutoffs for your customers and impacting that customer relationship negatively. 

When we started putting together the research for our late payments webinar, we found some recent data that said 60% of consumers have paid a bill late. While we might think missed bills are due to a lack of finances, which is a real issue right now, this research found that the vast majority of late payments are due to non-monetary reasons. Things like forgetfulness, billing errors, disputes, and lack of access to the right tools have a much larger impact than we can imagine. But the good news for utilities, billers, and our listeners is that there are really effective strategies that can be implemented to address those non-monetary issues.

Shaun: Wow, that's really insightful. Let's get into those strategies and begin with how billers can prevent late payments before they actually happen.

Strategies to Prevent Late Payments

Cali: For sure. Strategy number one is all about offering a frictionless payment experience. This means removing all the barriers to timely payments and creating a customer-centric payment process. Research shows that more and better payment methods lead to more on-time payments. 

KUBRA confirmed this in our latest Billing and Payment Report, which found that 45% of consumers said improving digital payments would help them make payments on time. To encourage more on-time payments, your payment channel should ideally include multiple options for customers who want to pay digitally, over the phone, and in person. You should cover every payment type, from cash to digital wallet.

Shaun: That makes a lot of sense. For our listeners who may not have the right channel mix right now, do specific channels have a more significant impact on payment timeliness?

Cali: Definitely. There are two channels I'd suggest diving further into because the research tells us they're particularly effective. The first is mobile apps and the second is pay-by-text. 

Utility mobile apps consistently rate the highest in customer satisfaction. According to KUBRA's research, they are now the preferred method for paying bills. JD Power recently reported that utility mobile apps score significantly higher than mobile websites or desktop access when it comes to satisfaction, which translates into more on-time payments. 

The second channel is pay-by-text—78% of consumers say it's the quickest method to reach them. My phone is never more than a few feet away from me, and I usually check my email a couple of times a day, but I always look at my phone when it pings with a text. Although it may not be the greatest habit, a lot of consumers are in the same boat, which makes it such an effective channel. However, only 28% of utilities currently offer pay-by-text, which has huge potential. In the late payments webinar, we also discussed the benefits of digital wallets and retail cash payments, so I'd suggest checking out the webinar recording for more information.

Shaun: Your comment about your phone resonated with me. It's almost like a body part, and you can't be disconnected from it. That makes a lot of sense. Thank you for breaking that down further and mentioning the webinar recording. We'll link it in the podcast description for those looking for more comprehensive coverage of everything we're discussing today. Cali, what is your next strategy for us?

Cali: Strategy #2 is all about offering flexible billing and payment options, such as autopay, budget billing, pick your due date, prepaid metering, and early payment discounts. These options help customers manage their finances better. A study by ESource showed that customers enrolled in budget billing are more satisfied than those on standard billing plans. Making bills predictable and manageable shows you care for your customers and makes it easier for them to pay on time. 

At KUBRA, some of our clients use our boost feature through KUBRA EZ-PAY®, which allows customers to request payment assistance from friends and family. Customers share a link that friends or family can use to contribute to their bill payment. One client saw 330 boost payments in 2023 alone—330 bills that might not have been paid on time without this feature. It's worth exploring, especially for KUBRA clients using KUBRA EZ-PAY but not this feature.

Shaun: That's fascinating. It makes a lot of sense to make it as easy as possible for customers. By offering flexible billing and payment options, we're not just aiming for timely payments; we're fostering a community of engaged, empowered customers. Is that fair?

Cali: 100%. Participating in these programs creates a positive cycle of behavior that benefits everyone. I'd suggest surveying your client base before deciding which channels or options to add. Ask them what they find most helpful before investing in these additions to ensure they're worthwhile for both you and your customers.

Shaun: Makes a lot of sense. We've discussed strategies to prevent late payments; let's move on to strategies for collecting late payments. When late payments happen, what can utilities and billers do to quickly collect them and avoid shutting off service or initiating more intense collections?

Personalized Communication for Collecting Late Payments

Cali: The first strategy is personalized communication. Personalized calls to action result in 202% more conversions compared to non-personalized ones. Utilities and billers have comprehensive customer data to send personalized messages resonating with different segments. 

For example, for typical on-time payers who just had a lapse, a gentle reminder with a payment link using their name might be most effective.

For occasional late payers who often miss bills due to situational factors, increasing the frequency of reminders and encouraging auto pay sign-up can help. 

For chronic late payers facing financial difficulties, urgent and frequent reminders and information on financial aid programs and flexible payment options might be most effective. 

Many clients use Notifi® for this, our alerts and preference management solution.

Shaun: I fall into the typical on-time payers, but I missed a payment recently. Some options to mitigate that would be great. Personalized communications can transform how utilities and billers engage with customers. At KUBRA, we've seen how effective personalized strategies can be. It's crucial to send the right message at the right time through the right channel. For clients looking to implement these strategies, how can they identify and segment customer groups effectively?

Leveraging Advanced Analytics Solutions

Cali: The lack of understanding of your customers is often the limiting factor in personalizing communications. This is where advanced analytics solutions come in. At KUBRA, we launched KUBRA BizInsights™, our business intelligence solution built for billers and utilities. BizInsights analyzes all your billing, payment, and customer data to identify behaviors among on-time and late payers, predict which customers are most likely to miss a payment, and identify other trends impacting cash flow. These insights allow for targeted interventions to turn late payers into on-time payers.

Shaun: Can you share examples of campaigns that a biller could run using this data to turn a late payer into an on-time payer?

Cali: Definitely. For example, occasional late payers likely paying late due to non-monetary reasons may just need more frequent, earlier reminders to pay. BizInsights can identify these payers, and a tool like Notifi can automate personalized billing notifications before the due date. Another example is chronic late payers consistently paying late because they’re waiting for a paycheck. Incentivizing them to sign up for a pick-your-due-date program could help.

Shaun: Great ideas. Tools like BizInsights provide a powerful way to understand and predict customer behavior. Notifi can help communicate with customers and take meaningful actions to prevent late payments and enhance financial health. Did I get that right?

Cali: 100%. Both solutions can work together effectively to prevent and quickly collect late payments.

Shaun: Thank you, Cali, for joining us today. It's been a pleasure and an enlightening discussion. I hope our audience has some juicy takeaways—I certainly do. You've shared four helpful strategies for managing late payments, and the webinar dives into more strategies. To our listeners, check out the full webinar recording for more insights on this topic. Thank you again, Cali. You are welcome to join us anytime.

Cali: Thank you, Shaun. It was a super fun discussion. It was great chatting with you.

Shaun: My pleasure.