Reducing revenue loss in utility collections with intelligent communication tools

Imagine a utility company grappling with payment delinquencies, costing them millions in potential revenue loss. According to recent industry data from the National Energy Assistance Directors Association, nearly 20 million US households were behind on utility payments as of March 2023¹, with total utility debt reaching $19.5 billion. The costs of disconnecting and reconnecting services—ranging from $100-300 and $40-100, respectively—only add to the financial burden. Intelligent communication tools can help mitigate these challenges by automating and streamlining payment processes, reducing delinquencies, and improving overall revenue recovery.

This situation calls for innovative solutions to address these financial burdens and improve customer relationships. 

Intelligent communications are changing the game, preventing payment delinquency, and increasing collections 

For utility companies, the impact of delinquent accounts extends far beyond simple unpaid bills—it is a significant drain on resources and customer goodwill. Recent industry data reveals that 6%² of delinquent accounts become unrecoverable debt, while the average utility debt per customer from the top 10 utilities is approximately $5,200³, representing a substantial loss. 

Intelligent communication tools like Conversations are helping to transform how utilities approach customer interactions, billing processes, and debt management. These AI-driven systems offer personalized, automated solutions that can significantly impact a utility’s bottom line, offering a lifeline to both utilities and their customers.  

These intelligent tools are yielding tangible benefits that directly impact the bottom line and address critical operational challenges. This includes 

• Reduction in call center volume: With 25-35%⁴ of calls being billing-related, automating these interactions can lead to significant savings. Some utilities report a 20%⁵ decrease in billing-related calls, freeing up resources for more complex customer needs. 

• Delinquency reduction: Utilities can expect to see delinquency rates drop below 10%, with bad debt minimized to 3-4%⁶. This improvement not only boosts cash flow but also reduces the resources needed for collection efforts. 

• Disconnection avoidance: A 25% reduction in disconnection visits⁷translates to substantial savings in operational costs and helps maintain positive customer relationships. 

• Aging accounts: Lowering the number of overdue accounts aging by 10% improves cash flow⁸ predictability and reduces the risk of unrecoverable debt. 

Enhancing customer satisfaction through improved billing communication 

The J.D. Power 2024 U.S. Electric Utility Residential Customer Satisfaction Study reveals that overall satisfaction with electric utilities has declined for the fourth consecutive year, dropping to 707 on a 1,000-point scale⁹The most significant declines occurred in billing and payment (-11 points) and customer care (-11 points), driven largely by rising costs. The study highlights that the average monthly residential electric bill reached $182 nationally in 2024, the highest amount ever recorded by J.D. Power.  

According to Mark Spalinger, director of utility intelligence at J.D. Power, utilities can improve satisfaction by implementing strategies such as outage text alerts, infrastructure update emails, and proactive communication about ways to save energy costs. 

By offering flexible payment options through user-friendly interfaces, utilities can increase enrollment in payment plans and improve overall customer satisfaction scores. 

For example, Conversations enables fast, 1-to-1 personalized engagement across multiple channels. This allows utilities to have simultaneous interactions with individual customers, providing personalized experiences that replace generic messaging with tailored dialogue. 

Conversations has also been shown to reduce call center operational costs, while providing 24/7 customer support, and offer quick reporting and updates without phone calls. 

By leveraging advanced analytics to examine payment patterns and customer data, Conversations can identify at-risk accounts and initiate proactive outreach.  

Proactive communication strategies—such as personalized bill reminders and outage alerts—are key drivers of customer satisfaction, helping utilities maintain trust while reducing overdue payments¹⁰.  

Conversations offers user-friendly payment reminders and early warning systems, coupled with customized mitigation strategies for addressing billing issues and missed payments. This approach not only improves operational efficiency but also strengthens customer relationships by addressing billing concerns before they escalate. This approach can significantly reduce the number of accounts that become delinquent, improving both the utility’s financial health and customer relationships. 

Implementing these tools is faster than you think  

One of the most compelling aspects of modern communication tools like Conversations is its rapid implementation timeline. Many utilities find they can have these systems operational within a few weeks, often seeing positive Return on Investment (ROI) within the first year of operation. 

Conversations offers rapid deployment with an intuitive low-code interface that can integrate into existing legacy systems. Its pre-set, and easy to customize messaging workflows, allow utilities to launch new services rapidly, easily adapting to customer needs and market conditions. 

The future of financial communications and payment systems 

As we look to the future, the role of intelligent communication in utility operations will only grow. Gartner predicts that in 2025, 40% of customer service organizations will become profit centers by becoming de facto leaders in digital customer engagement¹¹. 

For utilities, this means that investing in advanced communication tools like Conversations is not just about reducing costs—it’s about positioning for future growth and customer-centricity.  

These platforms are designed to streamline operations, reduce costs, and delight customers with intelligent automation specifically for utility providers. 

Conclusion 

As the utility landscape evolves, those who adopt intelligent communication solutions like Conversations will lead the charge into a more efficient, customer-friendly future. These improvements in digital payment adoption and customer satisfaction align with broader industry trends.  

As utilities embrace digital transformation, they are finding that offering flexible¹² automated payment arrangements not only improves cash flow but also meets rising consumer expectations for convenient, personalized services.  

By reducing revenue leakage, improving operational efficiency, and enhancing customer satisfaction, these tools prove to be not just cost savers, but revenue generators.   

To learn more about how Conversations can streamline operations, reduce costs, and delight customers by scheduling a demo today!  

RESOURCES 

1. Brennan Property Management. (n.d.). Automatic payments for utilities.  
2. Brex. (n.d.). KPIs and metrics for accounts payable and accounts receivable.  
3. CBS News. (2024, February 20). Nearly 20 million U.S. households are behind on their utility bills.  
4. Eaton. (2023). Brightlayer utilities research report 2023.  
5. Gartner. (2021). Top customer service and support predictions for 2021 and beyond.  
6. J.D. Power. (2024). 2024 U.S. electric utility residential customer satisfaction study.  
7. Nextiva. (n.d.). Customer experience ROI: How to measure and improve it.  
8. Pacific Institute. (2023). The role of metrics in water and wastewater affordability programs in the United States.  
9. S&P Global. (2023). Public finance: U.S. municipal water and sewer utilities—outlook and key trends.  
10. S&P Global. (2024). Public finance: Electric utilities sector outlook and trends.  
11. Stampli. (2023). How to successfully implement AP automation: A step-by-step guide.  
12. Utility Dive. (2024). How utilities are improving residential customer satisfaction.