When 75 percent of your customers own PCs and 50 percent are regular Internet users, seizing the opportunity to reduce costs while appealing to a growing techno-hip customer base makes good sense.
Dallas-based Capstead Inc., the mortgage servicing arm of $10 billion- asset Capstead Mortgage Corp., became a beta site for CheckFree's electronic bill presentment system, called E-Bill, in January. "We saw long-term opportunities that we believe the Internet (will) provide in terms of interfacing with our customer base," says Robert Meachum, vp of investor reporting at Capstead.
Capstead was perfectly positioned to offer the system to its customers, says CheckFree's Mark Johnston, general manager of its software solutions group. "Capstead has traditionally been pretty advanced in their approach and utilization of technology. They're a very forward-thinking mortgage entity."
The mortgage bank has to be. A survey of customers' computer literacy showed that 75 percent of Capstead's customers own PCs, more than double the American average of 37 percent, according to a 1996 IDC/LINK survey. And 1,300 of Capstead's customers already use CheckFree and the Internet to make monthly bill payments.
To implement the pilot program, the mortgage bank selected 90 of their wired customers to take their electronic bill payment one step furtheroto view their monthly bills by logging into CheckFree's Internet site and then pay them on the spot.
The bills posted on-line are identical to those sent through the mail, a pointed decision by Capstead. "We put a lot of time and effort into our monthly billing statement. Our intention is to try and answer all our customers' questions so they don't have to call in," Meachum says. "We thought we would take this tool that has been successful so far from a paper medium to an electronic medium."
During the five-month pilot program, customers still received paper bills in the mail. "We continued to send paper bills so that we could keep consistency and so that (customers) could measure what was coming out in paper and what was coming out electronically," says Ron Burnette, svp of Capstead's information systems.
To sign up for the electronic service, customers accessed CheckFree's Web site via Netscape Navigator and Microsoft Explorer browsers.Once at the site, Capstead customers answered a series of questions regarding personal and account information. This process allowed CheckFree to issue individual passwords to consumers for future log-in use. A separate password is required for payment transactions.
Capstead received few complaints during the pilot; those that did come in were during the initial sign-up period, Burnette says. With the pilot now complete, Capstead plans to take a month to analyze the results. "In terms of working with CheckFree, the program worked out very well," he says. "The piece that we're currently working on getting is customer feedback."
Some of the questions the mortgage servicing company hopes to answer before decisions are made about a larger roll-out pertain to whether customers wantoor are ready foroe-bill presentment and payment. "We want to look at their inclination to no longer receive paper bills...the quality of the information they are receiving and if there's information that we're currently not providing that we could provide and the ease of the entire process," Burnette says. If the "E-billing" project is expanded to include a wider pool of Capstead's customers, the savings could be significant. The company currently services nearly 500,000 loans. With a projected savings of $6 per year per account, this could translate to $1.5 million in annual savings if all of Capstead's customers who currently use the Internet take advantage of the electronic bill presentment system. The savings would be realized primarily through reduced postage, paper and processing costs. Says Meachum, "Obviously, we can't assume that everyone is going to go through this medium; but, from a long-term perspective, a significant portion (of our customers) will." --sausner tfn.com
