Carrot or Stick?

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As the Postal Service increases rates while slowing delivery of the mail (what kind of business model is that?), encouraging more customers to opt in to ebilling only makes sense.

Last week, as we reached the Q&A period at the conclusion of my How to Increase Revenues Without Raising Rates presentation at a finance officer’s conference, an attendee asked if I knew of any utilities charging a fee for receiving a paper bill.

Motivation with a carrot

I replied that I’ve heard of utilities offering incentives, such as a one-time credit or a smaller credit each month for a specified length of time, for choosing ebilling. But I’m not aware of any utilities charging a fee for receiving a paper bill.

Consequence with a stick

It seems the local phone company in the questioner’s hometown has instituted a fifty-cent charge for continuing to receive a paper bill, and a member of the utility’s governing body wants the utility to do the same.

While I’m not familiar with any utilities charging a paper bill fee, it’s not unprecedented, especially with cell phone providers. However, a quick Google search reveals that New York has a law against charging for paper bills and the Pennsylvania Public Utility Commission has a regulation banning utilities from charging a fee to provide a paper bill.

I would definitely recommend consulting with your attorney before instituting any type of paper bill fee to be sure doing so is within the bounds of the law in your state.

What has your utility done?

If your utility has tried the carrot approach (offering an incentive) or the stick approach (charging a fee), please send me a quick email. I’d be interested in knowing if either approach resulted in a substantial increase in the number of customers receiving ebills.

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