HomeTop StoriesFour key initiatives for prepayment success

Four key initiatives for prepayment success

Assuming your company is convinced that prepayment is a good idea, we suggest that there are four key initiatives to ensure project success – assigning a strong project manager, getting internal buy-in, communicating internally, and garnering executive support.

Prepay is a meter group project right?

Many utility leaders assume that the logical place for a prepay pilot to reside is within the metering department. But prepay will touch nearly every facet of the integrated utility. The regulatory, legal and accounting departments must be involved in establishing the business rules for a prepay programme. Utility rate structures are historically based upon billing a customer after usage is determined. Consequently, the utility can apply fuel adjustment factors, environmental cost recovering factors, block rates for discounting per kilowatt hour cost. Thus, to implement a prepay meter programme, each utility must look at its individual tariffs and the legislative rules and regulations to determine what exceptions or changes are needed to allow payment in advance of known usage.

Call centre personnel must be given details about the programme, so that they are able to answer questions or, at a minimum, can redirect customer inquiries to those who have the required knowledge. Walk-in centres are an excellent place to pitch a new product such as prepay, as customers can talk to an individual, see the prepayment meter in operation, and learn enough to make an informed decision.

The revenue collection department must be involved, as the business rules established for a prepayment programme may conflict with the corporation’s established collection policies. Customer accounting plays a major role – they are responsible for billing and the information in a utility’s customer information system. With a prepayment programme, one must decide how the billing requirements are affected, if bills should still be sent to prepayment customers, and how to interface the prepayment system to legacy customer information systems. 

The metering department must learn about the new meter – how to calibrate it, how to test it for accuracy and how to use the software to control it. Additionally, meter reading employees need to be notified, to alleviate their concerns. Outage department employees must know about the programme and have, at a minimum, a general overview of its operations, since they are the ones who receive outage notifications and trouble calls.

The IT department needs to support the software and pay station activities, and needs to determine the degree of integration between a vendor’s prepayment software and legacy customer information systems. Marketing and market forecasting should be involved, to determine customer acceptability of a prepayment meter service. 

Lastly, corporate communications must understand the programme, to support media enquiries. Externally, any corporation considering a prepayment meter service should meet with low-income advocacy groups representing customers within their service area, to remove scepticism and dispel fears that the programme is designed solely for low-income customer segments, and to help design business rules that meet the legal regulatory requirements of a utility along with the advocacy groups’ concerns. 

If all of these bases can be covered by someone within your meter department, great. If not, perhaps other departments should be leading the project.

Do we need a project manager?

A company embarking on a prepayment metering project should expect internal resistance. LG&E’s internal resistance by various groups can be summed up by the following comments:

  • “Some customers don’t pay us for months after we give them their bill. What makes you think any will pay us in advance?” 
  • “I hear that the meter is very expensive and never works. It always has to be fixed by the trouble department.”
  • “I’m very busy and you want me to do extra work on top of my job for a programme that is never going to fly!”
  • “They’re just doing this to cut more jobs.”

As there is a natural resistance to a prepayment programme, and as almost every part of a traditional utility will be affected by it in one way or another, it is critical to have a full-time project manager dedicated to liaising between groups that may not usually communicate amongst themselves.

The project manager will spend a lot of time communicating the overall vision of the programme and its tie to the strategic value of the corporation. He will manage the beginnings of what can be a very large investment from people, processes, politics and resources. Additionally, a full-time project manager will resolve problems that arise at the worst time and that need a fully focused individual’s attention. If your company has decided that prepayment metering is a good strategic fit, you need to assign a high-calibre individual who is responsible for the project and has the authority to make and implement decisions that will lead to its success.

Getting internal buy-in

Because of misconceptions, disbelief that the programme is viable, and a resource-strained organisational structure, resistance to the project may be strong. It is extremely important to listen and address concerns quickly. Education is the only way that a prepayment programme can clear the hurdle of internal resistance.

And removing internal resistance is critical. It is unlikely that there will be many, if any, personnel dedicated to the programme, so you will be drawing on individuals who already have a lot of work to do. Maintaining the active participation of the people on the team will take diligence for the life of the project. There will always be at least one person who doesn’t buy in, and who tries to sabotage the programme by exaggerating problems and mistakes. Constant communication about the milestones and the project’s status and success is important.

To gain employee support, it is critical that you have open, honest communications. When a problem occurs (and many will in the initial pilot phase) you need to share it, do a post-mortem, and explain why the changes will make the process easier in the future.

No matter how often you tell employees that customers love the programme, they will still be sceptical. LG&E used focus group videos that showed customers expressing their extremely positive opinions of our prepayment programme, and this changed minds and attitudes quickly. Every company has good employees who want to give exceptional customer service. It is important to let them know that this programme will do just that.

Internal communication

Internal communication is more than a one-way process of explaining prepayment metering benefits and educating employees on its success stories. It is important to communicate programme needs and changes in traditional practices or processes as much in advance as possible. (See figure 1).

Internal communication is more than a one-way process of explaining prepayment metering benefits and educating employees on its success stories. It is important to communicate programme needs and changes in traditional practices or processes as much in advance as possible. (See ).

Garnering executive support

Executive support will influence the project’s process, progress, success and continuation. A lack of support can jeopardise the project. It’s much easier to gain internal support throughout the organisation when employees know that their VP and CEO have high expectations of the project, and are looking for successful results.

To gain executive support, one must ensure that the goals of the project are aligned with the overall business and corporate strategies. Executives may also be sceptical about the benefits, and it is thus important that they are given opportunities to see and hear customer responses to the programme. 

At LG&E, we showed executives a 20-minute excerpt of our focus group video, which assured them that the prepayment programme was contributing positively to customer satisfaction goals. While you can tell executives about the benefits, nothing sends the message quicker than first-hand experience of customer responses.

Finally, it is critical to have a project sponsor who is the champion for the prepayment project. This individual must provide leadership, support and guidance to the team and project manager. It is the project manager’s and project sponsor’s responsibility to communicate how a prepay programme will strengthen the achievement of financial, strategic and customer satisfaction goals. 

Additionally, he must help the team manage expectations, gain resources and use political clout, if needed, to meet project goals and objectives. At the same time, the project manager cannot micro-manage, as the project encompasses so many different aspects of the business. No one individual can be an expert in all those areas, and the project sponsor must let each employee do what he does best. 

Companies embarking on prepayment metering project should not underestimate the widespread effect on individual areas within the corporation. Covering the items mentioned above, however, can lead to a very successful prepayment metering project.

Internal Communication