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Credit Process Optimization Project

“If everyone is moving forward together, then success takes care of itself.”

– Henry Ford

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Customer-Focused Risk Management Led To:

16,300,000.00

13,400,000.00

12,900,000.00

$10,100,000

$8,500,000 FCST7,000,000.00

8,000,000.00

9,000,000.00

10,000,000.00

11,000,000.00

12,000,000.00

13,000,000.00

14,000,000.00

15,000,000.00

16,000,000.00

17,000,000.00

2013 2014 2015 2016 2017

Net Write Offs 2013-2017$16.3M

Great Results: While maintaining customer satisfaction:

Phone Rep Satisfaction (2017 % Top Box)

614622

651666

688

720

2012 2013 2014 2015 2016 2017

Ameren MissouriJDP Residential

Overall Sat Index

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Credit Project Optimization – SWOT Analysis

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Balancing Credit and Customers in Need“Can’t Pay” versus “Don’t Pay”

• A significant subset of our customer base struggles to afford their energy bills

• The poverty rate in Missouri is 14% - and the poverty rate in St. Louis is 24.3%

• Low-income households spend 3x as much of their income on energy costs as higher-income households

• But, only 4% of our customers received Energy Assistance in 2017

o They received an average of 2.9 service interruption notices that year

o 60% entered into a payment agreement

o They call us more often than other customer groups… average of 6 calls per year

“I don’t qualify for energy assistance. I don’t make enough to

make ends meet, but I make too much to qualify for help!”

“I’ve called every energy assistance agency in my area. They’re either out

of funds or I have to wait 30 days. My shut off is tomorrow!”

“My job eliminated overtime and I just don’t have it. I need more time!”

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Inputs

• MO Credit & Collection Journey Mapping Outcomes

• Utilities Industry Credit & Collections Best Practices

• Customer/1 (CSS) Credit & Collections Architecture Knowledge

• Energy Assistance Agencies

Activities

• Workshops to review proposed changes

• Estimated proposed changes and prioritize changes based on goal impact

• Created a high level implementation schedule

• Ensured alignment with Business Team

Outcomes

• Prioritized list of enhancements

• A high level schedule to implement changes

• Refined effort, cost, and timing estimates

• Project Approval Committee Presentation

Project Design: Key Inputs, Activities & Outcomes

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Our Journey from Current State to Future State

Passive Approach

Generalists

Reactive

High Delinquency Balances

Same Treatment for all Credit Customers

SVL & AHT

Completing ~low % of Eligible Cuts

Current State Future State

Active Management

Focused Discussions

Proactive

Much Lower Delinquency Balances

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Collections Project Optimization – Goal and Objectives

• Goal: Enhance current systems/processes solution in order to reduce write offs

• Objectives:

• Optimize credit scoring methodology

• Reduce the collections timeline and maximize tariff approach

• Increase messages through the collection timeline using various channels

• Include a mandatory reconnection fee to be paid as part of the obligation to fulfill to be reconnected

• Add a new interface with SpeedPay to process payments real-time

• Streamline notification process with an outbound phone call.

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#1: ACTIVE MANAGEMENTBeing smarter about how we manage balances with customers

Customer Care Center

• Focus on revenue AND satisfaction

• Handling of payment agreement offer (pay ability vs. extension)

• Interactive Voice Response (IVR) routes delinquent callers to a dedicated, highly trained customer care group

Automated Calls

• Increased frequency

• New criteria

Digital Channels

• Enhance communication via alerts in email, mobile channels

Energy Statement

• Bigger, clearer messaging on bill when in arrears

• Envelope messaging to encourage prompt payment

Key Outcomes

Key Outcomes

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Credit Scoring

• Scoring model enhancements

• Accelerated accounts moving into active collections

Collections Timeline

• Streamline notices

• Increase days available to work cuts

Communication Channel & Frequency

• Proactive calls

• Proactive alerts and messaging

Payment Agreement Modifications • Options across channels

• Improve Customer Care Advisors’ handling of agreements

Work Order Heat Map

#2: ACTIVE COLLECTIONSWorking through points of interruption to nurture accountability, make it important to settle balances

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#3: CALL CENTER CULTURE & CHANGE MANAGEMENTTalking to customers about opportunities to work through Credit and Collections

Organization Structure

• Dedicated Customer Care Advisor credit roles

Training & Support

• Increased knowledge and skills for Customer Care Advisors to focus on revenue recovery

• Optimized Q&A and coaching

Change Management

• In conjunction with new training

• Communication and collaboration to drive business results

Metrics & Measurement

• Optimized metrics to gauge success of new, dedicated Customer Care Advisor credit roles

Key Outcomes

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Key Results from our Process Improvements

Arrearages are significantly down over prior years

Uncollectibles expense is approaching Top Quartile performance

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Uncollectibles – 5 Year Performance

• Key Improvement Factors:

• Improved cut rates and lowered average balances

• Lengthened timeline at the end of 2014 to allow customers more time to pay before charge off

• Improved recoveries and collection agency performance

• Managed Damage Claim loss

Improved by $7.8M over 5 years!

16,300,000.00

13,400,000.00

12,900,000.00

$10,100,000

$8,500,000

7,000,000.00

8,000,000.00

9,000,000.00

10,000,000.00

11,000,000.00

12,000,000.00

13,000,000.00

14,000,000.00

15,000,000.00

16,000,000.00

17,000,000.00

2013 2014 2015 2016 2017

Net Write Offs 2013-2017$16.3M

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Community Pilot: Ameren Empowering You!

• We’ve collaborated with a non-profit to address the

“can’t pay” gap

o Step #1 – partner with local schools to identify families in need; school invites them to participate

o Step #2 – conduct Listening Sessions with these families to get candid, honest perspectives

o Step #3 – host events at the school to connect these families with Ameren Missouri credit advisors, financial advisors, Energy Assistance agencies, weatherization providers, etc.

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Low-Income Customer Advocacy

• We are dedicating additional resources to programming and outreach for low-income and vulnerable customers

• We’re defining a three-year roadmap to develop a service model for low-income customers that is…

• 2018 plans include expansion of Ameren Empowering You, Empathy (Poverty Simulation) Training for all Customer Experience co-workers, and input on new 2019 Energy Efficiency programs for low-income customers

Affordable

More certain

Focused on customer

control and empowerment

Flexible and situational

Segmented

Easier and less confusing

Collaborative and Innovative

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