Greening the Utility Bill-to-Cash Cycle, Part 2: Returned Mail

Greening efforts are growing in popularity. Utilities have tapped into the greening the bill-to-cash process by aggressively promoting electronic billing and payment.

by Penni McLean-Conner, NSTAR

Greening efforts are growing in popularity. Utilities have tapped into the greening the bill-to-cash process by aggressively promoting electronic billing and payment. Further opportunities to green the bill-to-cash process exist, and they can reduce utility operating costs and enhance customer service.

Part 1 of this series focused on intelligent mail, the technology platform for next-generation mailing services. Part 2 focuses on electronic returned mail processing. Both promising technologies create utility value in improved customer service and reduced costs.

Returned mail processing is a big business in utilities. The U.S. Postal Service notes that 1.9 percent of first-class mail is returned. For utilities, energy, telephone and wireless companies, more than 290 million pieces of mail are returned a year.

Most mail returned to utilities is bills. Processing returned mail involves cumbersome, physical management of thousands of mail pieces, manual processing and secure shredding. As utility consultant Bill Zdep notes, most utilities do not process returned mail effectively because of resource constraints and the lack of understanding the cost benefit of timely processing returned mail.

Significant benefits come with processing returned mail if the process is managed and efficient, Zdep said. These benefits include:

■ Enhanced customer satisfaction with addresses’ being corrected more quickly and efficiently;
■ Reduced address errors, which help lower overall postage expense through accurate mail delivery; and
■ Enhanced credit efforts through quicker, more accurate customerlocation determination.

Specialized firms can assist utilities that struggle to process returned mail efficiently. These services offer end-to-end solutions including gathering mail from the Postal Service, analyzing and dispositioning mail and shredding documents securely. Utilities that have invested in the Postal Service’s intelligent mail solution will find this entire process can be completed electronically. With intelligent mail, mailers maintain the mailing discount and receive returned mail by electronic file vs. the physical mail.

NSTAR tapped into the intelligent mail infrastructure and connected with a service provider that specializes in returned mail. The result was a fully automated solution with a payback of less than one year.

NSTAR Case Study

At NSTAR, an electric and gas utility serving 1.4 million customers in eastern Massachusetts, more than 17,000 pieces of mail were returned each month. The utility launched a project to review and assess returned mail. In analyzing the process, NSTAR determined the return mail process to be manual and time-consuming. Manually sorting physical mail and then researching one by one yielded limited benefits. More important, the analysis noted that more than half the mail was active or final bills; time is money in locating those customers.

NSTAR partnered with a firm specializing in return mail processing. Because NSTAR implemented the Postal Service’s intelligent mail, the firm developed a completely electronic, end-to-end solution.

At NSTAR, the Postal Service’s return mail electronic file is appended with additional NSTAR customer information and electronically processed by the return mail partner.

With nearly six months of experience, NSTAR has realized the following benefits:
■ The service provider is adding intelligence (accurate customer or address information) to 40 percent of
the mail;
■ Postage costs have decreased because repetitive mailing to incorrect addresses has decreased. NSTAR suppressed bill print on known incorrect addresses, thereby reducing postage associated with repetitive mailings to bad addresses;
■ Customer service is enhanced with mailing-process clarity;
■ Customer service representatives can inform customers why mail is not being delivered; and
■ Credit processing has been enhanced because more accurate, timely bill delivery equals more
payments.

Because so much utility mail is bills, processing returned mail quickly and accurately can impact the bottom line significantly. Options and services can support more accurate, efficient return mail processing.

For utilities that have invested in the intelligent mail infrastructure, the additional benefit of transforming the return mail process to entirely electronic saves time and money and supports the greening of the utility bill-to-cash cycle.

A u t h o r
Penni McLean-Conner is the vice president of customer care at NSTAR, the largest investor-owned electric and gas utility in Massachusetts. McLean-Conner, a registered professional engineer, serves on
several industry boards of directors, including the Massachusetts Technology Collaborative and CS
Week. Her latest book, “Energy Eff ciency: Principles and Practices,” is available at http://pennwell
books.com.

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