Municipal finance study: dissatisfied customers results in billing queries

Scholarly research into the payment habits of City of Johannesburg (COJ) Municipality customers has linked non-payment of accounts to customers’ queries and dissatisfaction with services.

In his Master’s thesis which explores the potential relationship between the accuracy of municipal bills and the propensity of customers to pay them, UNISA School of Business Leadership student and Deputy Director of Back Office support at the City of Johannesburg Boleu Mohlala found that where customer queries are prevalent, payment behaviour deteriorates, he told SmartProcurement

Mohlala conducted his research under the tutelage of noted Supply Chain expert Dr. Douglas Boateng.

Using regression analysis, Mohlala identified relationships between customers’ problem types and their payment behaviours across a sample of 320 queries logged with the COJ call centre in April 2009.

“The results of this study indicate that there is a statistically significant relationship between account queries and account payment,” explains Mohlala. “Non-payment of monthly service accounts has a direct relationship with the number of billing queries logged with the call centre; furthermore, numerous billing queries logged by customers has a direct effect on dissatisfaction,” he explains.

The ultimate impact is that the municipality is unable to collect as effectively as it might.

Among the pressing challenges faced by municipalities nationwide is the all-important issue of effective revenue collection. Without diligent control of payments from citizens for services rendered, municipalities will grind to a halt as their sustainability is compromised.

What also emerged from Mohlala’s research is that meter reading inputs have a direct effect on monthly electricity consumption disputes and, hence, overall account payment behaviour. As a consequence of this finding, Mohlala believes improved control of the meter reading function may be necessary, with a focus on facilitating rapid and accurate information exchange.

“This function presently resides with outside contractors. It is perhaps necessary to look at the quality of service rendered by the outsourced contractors, starting with fieldwork, through to IT and communication systems,” he notes.

Mohlala says billing errors often cause COJ customers to talk to support-service personnel in the billing department. This, he contends, indicates discontentment with the billing supply chain management.

“This raised the question of how customers view the support service within the supply chain, between them and billing department managers. Since the customer is the ultimate judge of the billing supply chain management’s performance, effective and timely response to customer query resolution becomes an essential component of success within billing,” he says.

Mahlala says important considerations for improving customer satisfaction of the residents of a municipality include:

• A correct bill for every service a customer has consumed.
• Each service element needs to be distinct.
• A combination of the services bill must be easily interpreted.
• Overlap among service elements should be reduced so that customers do not pay more than once for the same portion of a service consumed.

The identification of relationships such as this within the billing supply chain contributes to an improved understanding of the factors that influence customers’ account payment behaviours, says Mohlala’s study leader Dr. Boateng.

“By understanding such relationships, organisations can accurately focus their attention on remedying issues that can improve contributions, which clearly delivers benefits to that organisation,” says Boateng.

Boateng adds that Mohlala’s research can therefore offer valuable insights to supply chain managers and practitioners not only in municipalities, but also in other industries or vertical markets.

Boleu Mohlala is the Deputy Director of Back Office support at the City of Johannesburg. He holds a BSC Hons from UNISA, an MSC from WITS and an MDP from UNISA SBL. He can be contacted on 011 358 3603.

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