The State of Paperless Adoption at Utilities: Barriers and Tactics to Achieving Paperless Adoption

by | Sep 8, 2021

How Are Utilities Currently Delivering Various Customer Communications?

Despite many pockets of the utility customer base still clinging to the paper billing process they’re so comfortable with, many trends are moving them even more swiftly towards paperless solutions:

  • Increased availability of digital tools that can convey more than any paper solution ever could
  • The ubiquity of smart phones, laptops, tablets, and even voice assistants in homes and users being intuitively comfortable with them, which reduces the need for new education
  • The COVID-19 pandemic upending the way many people performed day-to-day tasks, highlighting the convenience and safety of remote processes

As the utility industry continues its march towards greater paperless adoption at utilities, delays add costs and concerns.

A longer transition towards 100% paperless billing means additional costs to the utility provider, customers being more likely to overlook critical communications, and a less satisfactory customer experience. For those reasons, utilities must not just look at their state of paperless adoption today, but the direction and speed with which the puck is traveling, to ensure they meet customers where they are and where they’re going.

As such, Doxim commissioned research by Keypoint Intelligence to really dive into these topics to highlight the successes already achieved and underscore where work is left to be done.

Keypoint Intelligence Survey Background: How Are Utilities Currently Delivering Various Customer Communications?

This research included the survey of 44 different utilities that serve consumers and households in the United States, asking for detailed responses about the organizations’ delivery of bills, legal notices, statements, and other key transactional communications to customers.

The breakdown of utilities surveyed includes 15 large/regional utilities, 11 investor-owned utilities, 10 municipal utilities, and 8 electric cooperatives. Collectively, these 44 utilities averaged over 2,000 employees and about 2.3 million customers. Those customers, on average, receive 6.7 printed transactional communications and 6.2 electronic transactional communications per year.

This background and thorough methodology mean Keypoint Intelligence was able to provide some thorough and representative insights that can be extrapolated to the wider U.S. utility sector.

Survey Results: Distribution Channels for Customer Communication

Across all the utilities surveyed, customers receive their bills and statements:

Exclusively by electronic / paperless means: 37% of the time

Exclusively by print: 30% of the time

By both electronic and print delivery: 33%

This result shows that while the greatest single category of customer is the one that only uses paperless delivery, a collective 63% of customers are still receiving a paper bill.

This trend can be particularly troubling because those customers receiving paperless bills have the experience and comfort to access the bill electronically, but by also getting a paper bill, they are still adding extra costs to the utility provider’s billing process.

For non-billing communications, the trend looks quite similar. The percentage of customers receiving ‘other critical documents,’ such as legal notices, is broken down into:

Exclusively by electronic / paperless means: 39% of the time

Exclusively by print: 34% of the time

By both electronic and print delivery: 27%

In total, 61% of customers receive these other notifications by paper, showing that there’s not much difference in paperless adoption based on the type of communication. The customers that feel the need to cling to their paper communications are likely doing so across the board.

Barriers To Greater Paperless Adoption at Utilities The best strategies for encouraging paperless adoption will come when utilities understand the challenges faced by the customers. When asked about the most significant barriers to greater paperless adoption, the most prominent answers provided were:

  • It’s not easy enough for customers to switch (reported by 60% of respondents)
  • Incentives for switching not being great enough for customers (60% of respondents)
  • Challenges around the capture and maintenance of email addresses (40% of respondents)

To overcome these challenges, utilities suggested numerous tactics that they were embracing. Across all utilities surveyed, the most common paperless adoption strategies were to:

  • Provide better customer experience
  • Implement effective multi-channel marketing strategies
  • Meet customer security and privacy concerns
  • Make it easier to switch to paperless, and providing education on the paperless benefits

Different utilities are also adopting unique approaches to achieving their paperless targets.

  • The most prominent strategies for achieving paperless targets for large regional utilities are: setting realistic goals, improving customer experience, and meeting security and privacy concerns.
  • Investor-owned utilities reported their most common strategies for encouraging paper adoption were setting realistic goals, meeting security and privacy concerns, making it easy for customers to switch, and charging a fee to receive communications by mail.
  • Among electric cooperatives, the most prominent strategies were making it easier for customers to switch, improving customer experience, effective multi-channel marketing, and providing incentives.
  • Lastly, municipal utilities achieved their greatest levels of success through use of internal programs to incentivize customer service representatives, improving customer experience, and educating customers on the benefits of going paperless.

The differences among these types of utilities provides some compelling insights. For example, successful municipal utilities tapped into the power of the customer service representatives, while the investor-owned utilities went for the stick (fee to receive paper bills) vs. the carrot (incentives for switching) offered by electric cooperatives.

Progress Towards Paperless Goals

Utilities have every reason to encourage their customers to adopt the paperless process, from reduced costs to increased ability to reach customers where they are. That motivation is why utilities often have internal goals for paperless adoption among their customers.

  • Among large regional utilities, 93% are meeting or exceeding their goals, with the remaining noting they are not meeting goals but were close.
  • Among investor-owned utilities, nearly 64% reported meeting or exceeding their goals, with the remaining also being close, but not quite meeting goals.
  • All electric cooperatives and municipal utilities reported that they were meeting or exceeding their paperless goals.

The difference between the utilities meeting their paperless goals could be the size of the utility, as it’s intriguing to note that the typically smaller municipal utilities and electric cooperatives are the ones self-reporting meeting their goals. With smaller customer bases, these utilities may simply have an easier time reaching out individually to their holdouts with education, training, and customer service.

Looking Ahead

Utilities are constantly assessing where they expect their billing processes and customer habits to go in the coming years, especially when it comes to paperless adoption. In just two years’ time, these 44 utilities expect to see their customer bills and statements to go from:

37% paperless today to 45% paperless in two years

30% print only today to 24% print only in two years

33% paperless plus print today to 31% paperless plus print in two years

The customer bases are indeed shifting away from paper bills, going from 63% who get a paper bill to an anticipated 55% in two years. When looking at the non-billing statement, the portion who receive paper communications is expected to drop from 61% to 50%, reflecting a similar trend.

While these expectations do represent progress, they notably remain rather slow, with the majority of customers still refusing to give up their paper bills. To overcome these hurdles, the utilities surveyed by Keypoint Intelligence offered a number of transactional communication policies, which they have already implemented:

  • New customers are defaulted to paperless delivery (50% of utilities) and customers who choose paperless will no longer have the option to revert back (23%)
  • Customers must pay to receive hard copies of statements (28%) or hard copies of bills (21%)
  • Paper options get automatically turned off, immediately after paperless adoption (27%) or at some later point after paperless adoption to allow for a transition (21%)

Conclusion: The Value of Paperless Adoption at Utilities

Utilities recognize the value of paperless adoption for customer communications, but that does not always translate to customer adoption when the understanding is misaligned or the incentives don’t benefit the customer. For the future of the utility sector, though, utilities need to optimize paperless solutions and make   the obvious and intuitive choice for their customers.

The portion of customers hanging tightly onto paper processes are going to be the hardest ones to convert, so utilities should work with a vendor who understands the requirements of the utility sector and the motivation of customers.

Moving towards the ultimate goal of a fully omnichannel communications experience for utility customers is a top priority, so collaborating with a partner who has the expertise and experience to help optimize paperless adoption strategies, is crucial.

3. Expansion of digital products

As banking customer behavior shifts, banks must move with the times, or risk getting left behind. Many banks today are exploring the power and potential of open banking, which can allow them to offer more innovative products and services to their customers, as well as to better compete with fintech companies and other non-traditional financial service providers.

As you shift your banking business model to reach new segments or provide an enhanced array of services, communication becomes even more pivotal to your success. After all, if your customers don’t know which new services they qualify for, or how those services will help them meet their goals, then they are unlikely to explore them further. CCM technology can be leveraged here to provide personalized on-statement messaging that directs customers to the right products and services, as well as 1:1 personalized “explainer” videos to help them get started.

Adjusting your bank’s priorities to thrive in 2023

In an era of constant change, the key to successfully transforming your bank’s business model will be to stay attuned to the changing needs and preferences of customers, and to be open to exploring new opportunities and technologies that can help your FI stay competitive and relevant. But these new opportunities are doomed to fail if you do not clearly communicate their benefits and make it simple for customers to access them.

That is why transforming your customer communication strategy is the best first step to broader digital transformation. By updating your approach to communications to meet omnichannel customer needs, you also position your bank to communicate the benefits of changes in your broader organization, like new or enhanced products and services. The pace of change in banking has never been brisker – but with the right strategic approach to these changes, the future is bright.

Investing in a modern customer communication management and engagement platform is an essential part modernizing your banking strategy, as it can provide the personalized digital experiences that will keep your bank or credit union ahead of the competition. It helps provide a great customer experience, and builds rich relationships, which in turn results in customers for life and a competitive advantage in the rapidly evolving financial marketplace.

How Doxim can address the banking customer communications trends identified and help future-proof your digital banking strategy

banking customer communications trends

Doxim’s experienced consultants and omnichannel platform can help transform your customer experience in many ways, including:

  • Gathering and utilizing customer data to continually improve the personalization of communications.
  • Building trust with customers via communication (via print, PDF, HTML, email, text, and online interactive experiences).
  • Leveraging interactive video to drive personalized digital customer experiences, such as interactive statements, bills, or reports, that offer visual engagement and real-time interactivity
  • Putting customer data, including customer statements, at the fingertips of your service representatives for immediate and personal service.
  • Making a meaningful connection with value-added content, like information about philanthropic activities, on customer statements.

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