This year is shaping up to be a roller coaster for European utilities. The sector is lagging behind the Stoxx Europe 600 index. Demand is falling in key markets. And prices are dropping.
The market is doing its best to crush profits. But utilities themselves are contributing to the decline.
This post outlines the three biggest profit-crushing mistakes many utilities are making right now, and offers a solution to these problems.
1. Lack Of Insights Into Payment Obligations
It has never been more important to have up-to-date information on the risks your books carry and the payment obligations customers have outstanding. Simply put, markets change too fast to be caught flat-footed by risk.
Yet too many utilities don’t have adequate insights into these risks, nor understandable ways of reporting or communicating them to decision-makers. Complex spreadsheets, manual data entry and inscrutable reports are often the norm.
The result? Utilities often don’t have the actionable and accurate data they need to assess and mitigate risk. That cuts into profits and prevents future revenue generation opportunities. After all, how are you supposed to make informed decisions without the tools and data to do so?
2. Fundamental Misunderstanding Of Customer Behavior
Customer behavior has changed. Consumers expect and demand from every organization the same level of convenience and service they get from the Apples and the Amazons of the world. This applies to every industry—even utilities.
Customers don’t just want a basic web portal and a phone call when it comes time to pay their bills and meet obligations. They want robust ways to settle obligations on their terms, across every online channel they use, including smartphones, tablets and PCs.
Think about it: your ability to collect on payment obligations depends on effectively contacting customers and reaching an equitable settlement. If your company does not offer resolution options that fit modern consumer behavior, how is this possible?
Many companies are finding out the hard way that it isn’t.
Robust new collections strategies and tools are needed, such as self-service options. These methods aren’t just necessary, they’re more effective because they provide the right offer to customers at the right time—all while preserving your company’s relationship with them.
3. Massive Inefficiencies During The Collections Process
Personnel and the time spent executing tasks are major costs for your utility. Too many utilities still rely on paper documents, inefficient billing systems or other outmoded workflows to process payments and collections. This leads to duplicated or inefficient efforts that are extremely expensive.
But there is a better way. The pre-collections, recovery and legal collections phases generate large amounts of paperwork and much manual labor. Many of these tasks can be automated and documents digitized by specialized collections software. This saves time and money, while freeing up collections talent to increase revenue on existing business by collecting more effectively.
Here’s How To Fix Them
A specialized collections and recovery solution is the best way to fix the mistakes above in a fast, cost-effective manner. The best collections and recovery solutions on the market do the following:
- Provide deep insights into risk using advanced modeling and accessible dashboards that help organizations make smart decisions.
- Make it possible to reach customers across the online channels they frequent, and make the right offer to them at the right time.
- Automate and streamline wasteful collections tasks that sap time and money from your organization.