Billing and payment preferences in Australian residential supply

Billing and payment preferences in Australian residential supply

Introduction

With utilities focused on reducing cost-to-serve, opportunities exist within the billing and payment operations to reduce costs in line with customer preferences, thus securing both a lower cost-to-serve and improved customer satisfaction. This brief draws on results from a survey of over 2000 Australian households to highlight customers' predilections for lower-cost billing and payment options.

Scope

*A survey of over 2000 households across Australia regarding behaviours and preferences relating to bill presentment and payment.

*Analysis of preferences and behaviours overall and broken down by electricity spend

Highlights

Australian households show a preference to shift away from more expensive payment channels to cheaper options, such as Direct Debit, even without an incentive.

If incentivising a switch to Direct Debit, the most popular inducement of those suggested was a 2% discount on each bill.

There is significant interest in options such as bill smoothing and combined electricity and gas bills.

Reasons to Purchase

*Identify ways in which to incentivise customers to choose lower-cost payment methods.

*Understand the differences in preferences by electricity spend.

*Assess the opportunity for smooth billing and combined gas and electricity billing and electronic billing.

DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
METHODOLOGY 1
INTRODUCTION 2
Billing, payment and late payment account for approximately 40% of the residential cost-to-serve 2
ANALYSIS 2
How customers currently pay their bills and why they choose such methods 2
How customers would prefer to pay their bills 4
Incentivising customers to pay by Direct Debit 6
Frequency of bill payment 10
Interest in particular billing and payment options 11
Bill smoothing 11
Combined gas and electricity bill 12
Paper versus electronic billing 13
SUMMARY 16
Key findings 16
APPENDIX 17
Further reading 17
Ask the analyst 17
Customer support 17
List of Tables
Table 1: How Australians currently pay their electricity and gas bills 3
Table 2: Why consumers choose to pay by that method 4
Table 3: Current vs. preferred methods of payment 5
Table 4: Would you still pay by credit card if you were required to pay the 1% merchant fee? 5
Table 5: Attractiveness of incentives for switching to Direct Debit 8
Table 6: Attractiveness of incentives for switching to Direct Debit - by electricity spend per annum* 10
Table 7: How interested are you in bill smoothing? 12
Table 8: How interested are you in bill smoothing? - by electricity spend per annum 12
Table 9: How interested are you in receiving a combined gas and electricity bill? 13
Table 10: Preferred billing options: paper vs. electronic 14
Table 11: Preferred billing options: paper vs. electronic - by electricity expenditure spend 15
List of Figures
Figure 1: How Australians currently pay their electricity and gas bills 3
Figure 2: Attractiveness of incentives for switching to Direct Debit 8
Figure 3: Attractiveness of incentives for switching to Direct Debit - electricity spend per annum 9
Figure 4: What is the preferred frequency for paying an electricity or gas bill? 11