Is your Pricing Right?
Australian Utilities have taken an interesting tack and now offer up to 10% discounts in some states for early payment of their bills… i.e. if you pay before the due date you get a discount!!!
Electricity retailers here are in a difficult spot – cutting off the electricity service has moral implications – so they avoid going to that extreme wherever possible. The flip side of their generosity is they were taken advantage of as more and more people were deferring and delaying payments, so debt collection costs spiralled.
To counteract this the upfront discount has been introduced. This builds into each and every bill a portion of debt collection cost is “discounted” if it isn’t needed – good payers don’t get debt collection fees; everyone who pays after the DUE DATE pays a bit more!
Do you build the cost of debt management into your price?
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