Experts in the finance industry promote the mantra "Cash Flow is King!" Customer service gurus emphasize "Customers are King!" The reality is, these concepts are not mutually exclusive, but are tightly connected. Treating customers well leads to customers buying our goods and services, which in turn generates the cash flow that organizations need to not only survive but thrive. How do customer bills and statements fit into this picture? For a number of industries like credit-card processing, insurance, banking and utilities, as much as 80% of all contact with customers is accomplished via the customer bill. And a high portion of the company's cash flow in these industries is generated via the customer bill.
Customer bills and statements represent a significant portion of the total volume of hard-copy mail. Statement postage and production costs can be a substantial portion of a print/mail production center's budget. Some good questions arise how can a billing production operation help enhance customer relationships? How can postage and production costs be minimized? How can bills get to customers as quickly as possible? To help provide some answers, here are some "best practices" involving bill production.
Twelve Best Practices to Make Your Operation Shine.
1. Quality is job one Sending out an erroneous bill can be more damaging than not sending out a bill at all. Quality control procedures are crucial but sometimes are shortchanged because we are "too busy." Pursuing an accreditation like the U.S. Postal Service's MPTQM program is one route to help quality receive the attention is deserves. Whether or not you pursue accreditation, it's a best practice to make a conscious effort to build and maintain procedures, use quality control checklists and use signs in your shop. PGE uses these techniques, and we have started the MPTQM process.
2. Better today than tomorrow The faster you can get a bill into a customer's hand, the sooner the company will receive a payment. The top operations have the best practice of "same day" printing, inserting and mailing. In the case of PGE, we receive a bill print file in the early AM, then we print, insert, mail and have delivery to the nearby SCF post office by 4:30 that afternoon.
3. Give 'em what they want Customers don't want bill inserts that don't apply to them. Customers want as much · personalization as we can provide. A best practice is to use "selective inserting" and to use some form of customized messaging on the bills.
At PGE, we have selective merchandise that allows us to include inserts for targeted groups of customers. We also do some customized messaging using our Metavante CSF bill print software.
4. Show me the money There is real value in getting bills into customer hands, and it takes money to make that happen. But there are tangible ways to reduce your costs to mail bills.
A best practice is to maximize automation and sortation discounts and practice good postal hygiene. Because automated and pre-sorted mail is less expensive for the Postal Service to process, they pass on the "worksharing" discounts to us. We save over $1 million per year in postage costs from availing ourselves of the Postal Service's work-sharing discounts.
By using selective merchandise inserting and other practices mentioned, we keep our bills to one ounce and save another $2 million annually in postage by avoiding a second ounce.
5. Color my world Numerous studies have shown that strategically placed color increases customer's appreciation of the document, promotes understanding and improves response rates. Best practices include the incorporation of color into the bill document whether pre-printed, highlight or full color. Highlighting key information like "Amount Due" and "Due Date" increases accuracy and promptness of payments. At PGE, we use pre-printed color that was tested out with customer focus groups.
6. Protect my privacy Privacy of customer information has always been important, but seems to be more of a hot button issue than in the past.
Best practices include the use of security envelopes that protect the confidentiality of the information inside. We use strategically placed shading so that confidential information does not show through the envelope.
7. Mark the way A high percentage of customers choose to mail in their payment which consists of a check and the remittance stub from the bill. For several years, credit card companies have allowed customers to indicate change of address by writing on the back of the remittance stub. "Mark sense" technology can then be used to take an electronic image of the front and back of the stub and then used to update the company's Customer Information System.
We have adopted mark sense for address changes and for receiving customer comments. But we have also creatively used this technology for making it easy for customers to enroll for alternative power options and order products like home-based generators.
8. It'll never happen to me Technology is great when it works, but the reality is, machines sometimes break down. Best practice operations have both internal and external means to keep the bills flowing. We normally use two printers in duplex mode, but can switch to one printer simplex mode if needed. We also have two inserters and can use either one for inserting bills. For off-site back-up, we have a reciprocal emergency agreement with another in-plant operation across town.
9. Rolling down the river Continuous feed printing systems can be fast and low cost, so many large-sized operations make that choice. The next choice becomes how are you going to feed the paper box feed or roll feed? The best practice is to go with roll feed. We have seen increased throughput speed and ergonomic benefits by avoiding having to lift and load boxes of paper.
10. Two is better than one Some operations print "one-up," others go with "two-up." Two really is better than one and represents the best practice. By going two-up, you can increase your effective production rate, save money on paper and cut your per-click maintenance costs in half. We have used two-up for several years and have benefited from the increased speed, paper savings and reduced per-click charges.
11. Two sides are better than one Simplex (one-sided) versus duplex (two-sided)? Best practices point to duplex.
PGE converted to Duplex a few years ago, and as a result, we have been able to keep our customer bill at one page and within a one-ounce target. Keeping our bills within one ounce saves us over $2 million annually in postage as previously noted. Also, we can use the back of the bill to itemize charges and free up space on the front for customer messages and other information of interest.
12. On your mark, get set, go Using high-speed printers and inserters is the way to go. Higher speed equipment supports the same-day print, insert and mail best practice and leads to greater productivity of your staff and keeps your cost per bill low.
We use a pair of duplexed printers, which in two-up, duplex mode prints at the equivalent rate of 916 pages per minute.
Managing bill production operations can be very challenging but also very rewarding! Good luck as you pursue best practices and look for more ways to add even more value to you organization.
Wes Friesen, CMDSM, ICP,CCM,CMA, CM, CFM, APP, PHR is the manger of Billing & Remittance Services for Portland General Electric, a utility in Portland, Oregon. He can be contacted at Wes_Friesen@pgn.com.
