The Utility of Automation: Best Practices for eBill Adoption and Paper Turn-off

1. The Utility of Automation:Best Practices for eBill Adoption and Paper Turn-off Utility Payment Conference Mike Meeks, Revenue Officer Randy Vyskocil, VP Utility Market

2. Agenda • Payment vendor solution, ebill and City of Tallahassee overview • City of Tallahassee challenges • eBill implementation best practices • eBill solution • Lessons learned • Next steps • Summary of benefits

3. Payment Vendor’s Solutions Making it easy for consumers to send payments to utilities Vendor Vendor

4. Western Union’s Money Mindset Index The Western Union® Global Business Payments Money Mindset Index is a quarterly economic tracking study of over 3,000 respondents conducted by Javelin Strategy and Research in June 2009.

5. EBPP (“Pull”) vs. eBill (“Push”) “Pull” bill presentment is where a customer registers online and retrieves a bill image “Push” eBilling is the electronic delivery of a bill to the customer’s email inbox Cover letter email with secure ebill attachment

6. Benefits of eBilling Reduce costs and increase revenue • Significantly higher adoption rates • Significantly less time and resources spent on marketing • Cut billing costs by 30% to 70% • Increase overall electronic payment adoption • Improve DSO significantly Improve customer service and satisfaction • Reduce document delivery time • Enhance bill delivery ‘visibility’ • Ensure customer security and increase convenience • Establish real-time communication • Enhance consumer choice Reduce the environmental impact of paper statements • To generate 4.6M paper bills, you need: • 120 tons of paper • 240 tons of trees • 2M gallons of water • As a result: • 232,000 pounds of solid waste are generated • 605,000 pounds of greenhouse gases are emitted

7. Sample Utility e-Billing Comparisons City of Tallahassee

8. City of Tallahassee Overview

9. Previous Solutions for our Unique Challenges Provided their standard, compliant payment solution To support student arrivals during “Student Rush”, they created a web site to Initiate service Transfer service Stop utility services Tallahassee is home of Florida State and Florida A&M Universities Influx of 40,000 – 50,000 residential customers that arrive annually during “Student Rush” Needed a solution to support influx City of Tallahassee Payment Vendor

10. Next Challenge: eBilling Residential customers were actively demanding an e-Bill presentment and payment • The City was having issues completing paper bill batch with current staffing • Could not increase staff due to citywide layoffs • Customer base was continuing to grow at ~ 2% per year The City Commission and Manager mandated a Green Initiative

11. eBilling Focus Create an effective and non intrusive enrollment method for the customer Make enrollment voluntary as required by City Manager Gather and verify email addresses Contain budget within signature approval Convert paper bill to PDF Internal programming Training

12. eBilling Decision Timeline Payment vendor offered an electronic bill and payment solution through their e-Bill partner 2008 Go-live The City contacted payment vendor to help determine the best approach for an EBPP solution In January 2008, the payment vendor’s contract was amended to include ebill after an internal evaluation of Push vs. Pull The City delayed the launch until November 2008 to allow the annual Student Rush and a recent CIS upgrade for our Smart Metering Program to settle down By July 2008, the process was completed, tested and ready for production

13. Email Gathering Best Practices COT had 20,000 (or 20%) e-addresses which needed to be scrubbed of bad data by Striata; only ~ 5,000 were valid An Invitation was emailed to the validated e-address inviting them to join; 6% accepted CSRs were charged with collecting an e-address for every contact; over 50% of the enrollments took place via a CSR contact An email address was obtained from each new customer contact that called or walked in Ran a call center contest in July and August where the team that collected the most email addresses won a luncheon. Addresses jumped from 10K addresses to 14K COT had ~5,000 (or 4%) good email addresses before the project and went live with 33,000 (or 30%)

14. Strategy and IntegrationExisting Payment and New eBill Western Union developed an opt-in page for the City Opt-in page interfaced with existing City / WU functionality November 2008 the City began a soft launch of the product with a control employee group As of September 1st 2009 14,100 active SmartBill customers 6,300 (or 44%) had enrolled via the payment vendor’s designed opt-in page

15. Enrollment Best Practices Employees were encouraged to enroll TV ads and the City’s web site invited customers to enroll During Student Rush, customers were encouraged to sign up; of the 50+% CSR enrollment, 28% took place during Student Rush Western Union built an opt-in enrollment process; 44% of the City’s enrollments took place via Western Union The SmartBill bill was promoted as the e-solution for customers who wanted a no fee payment option Each new enrollee received a welcome email The entire enrollment process was automated Bill batch sent PDFs and file containing business rules to Striata All customer clicks were tracked and automatically enrolled new customers, un-enrolled opt-outs, and change of email addresses were included in the automation

16. Enrollment Issue Handling Best Practices Any failed deliveries of the welcome email were handled via a call to the customer to verify email address The City developed an email Matrix based on the Subject Line for Striata notifications; email groups were established to handle issues based on the subject line Any bill delivery failures automatically returned the customer to postal and generated a duplicate paper bill that included a letter with an explanation and invitation to call

17. Challenges Getting the customer to upgrade their Adobe version Waiting for Adobe to fix issues involving MAC users Educating the non PC savvy customer to the e-world

18. Comparing several control groups, customers appear to pay approximately on the same payment schedule and a small percentage paid slightly later (2-days). We feel this is due to the confidence gained after using the system for several months and scheduling the payment on the very last day SmartBill payments have increased each month and now account for 16% of the City's payments SmartBill payments quickly rose to 5% of the City's total payment volume helping to contribute to the City's over 37% electronic payment participation Customers continue to request a free credit card payment option but the City has remained firm that the cost of cards will be paid by the user and not absorbed by the City Customers continue to request a means to cancel future dated payments without calling a City CSR Payment Analysis

19. Electronic Payment VolumeeBill Volume Continues to Grow Dramatically AWWA CONFERENCE

20. Introductory Email Introduces service and benefits Provides information on how to enroll in the service, next steps, and contact information

21. Welcome Email Reminds customer about service and benefits Provides information on ebill process, security, next steps, unsubscribe details and contact details

22. Sample eBill Cover Letter Explains how to open the attached secure email bill Explains how to make a payment in the secure email bill Can include targeted messages– can track “clicks” to study success rates

23. Opening the eBill No password to look-up. Simply enter shared secret (e.g., zip code) to decrypt

24. eBill Opens as Offline PDF with Real-Time Payment Options Entire itemized bill opens as an offline PDF Real-time ACH payments can be made directly from within PDF bill Link to the Western Union Speedpay site for credit card payments

25. FAQS Bill detail Change of email address form Additional Billing Pages and Inserts

26. Confirmation Email Re-confirms payment success Provides information on adding address to contact, unsubscribe and contact details

27. Overwhelmingly Positive Customer Feedback • Customers say they “love it!” • Easy to use • New electronic payment option • It’s “pretty” • No customer complaints to date about not receiving a bill • Customers appreciate the time, attention and patience received from CSRs Best Practice CSRs can view the same bill the customer receives so they can walk the customer through how to use it in detail - using every effort to avoid turning paper back on

28. Lessons Learned: Challenges with a Digital Solution Beware of using zip code as shared secret for foreign customers Pop-up blockers Optical Character Recognition line (OCR) can’t be read from eBill

29. Lessons Learned (cont.) • GoodMail program increased delivery rate • Purchasing credits significantly lowered cost - all costs recouped in the first eight months • $50-70K expected savings in FY10 postage • Invitation to sign up had lowest adoption of all methods • Developed method to re-route high priority ebills to City staff before delivery • Allows ebill proofing before final delivery • Good process for problem and/or high profile customers (e.g., City Major, high bill complaints) • The vendors’ project management teams provided a very smooth implementation

30. Next Steps Continue to Analyze and Make Improvements • Test many different subject lines and their ebill adoption rates, continue to fine-tune message • Study open rates, contact customers who don’t open ebills and find out why • Ask customers who receive and open ebills but mail in their payments • Why they are still writing checks and mailing? • What can be done to convert them to e-payments?

31. If 20% of Customers Sign up for eBilling… Every year the City of Tallahassee will avoid using: • 8 tons of paper  • 152,000 gallons of water  • 336% of energy consumed by average household • 100% emissions of 4 average cars Every year COT will reduce billing costs by over $100,000!

32. Thank You! Randy Vyskocil VP, Utility Market Western Union Global Business Payments randy.vyskocil@westernunion.com 800-252-9638 x240 Mike Meeks Revenue Officer City of Tallahassee michael.meeks@talgov.com XXX-XXX-XXXX Visit our website at http://talgov.com/you/uos/smartbill.cfm ©2009 Western Union Holdings, Inc. The WESTERN UNION name, logo and related trademarks and service marks, owned by Western Union Holdings, Inc., are registered and/or used in the U.S. and many foreign countries. This material is confidential and is proprietary to Western Union and is not to be reproduced, disclosed, or used except in accordance with program license or other written authorization of Western Union. Any use, copying, manipulation, or reproduction of Western Union trademarks, logos, or material created by Western Union, its subsidiaries, affiliates or its business units, in whole or in part in any medium for any purpose whatsoever, is strictly prohibited without the prior written permission of Western Union. This information piece shall not be considered an offer, final terms shall be reflected in the Agreement signed by both parties.