How to restructure your late fee structure for happier customers

The Australian Government has announced a plan to reduce energy prices for consumers, by submitting a policy change proposal to the Australian Energy Market Commission (AEMC).

These new proposed changes will force energy providers to modify their policies on discounts for those consumers that pay “on time” or use a certain payment method, to support Australians with the financial strain that increasing energy prices have generated. As stated by the Energy Minister Angus Taylor, “This rule change will not only reduce confusion for families and small businesses but also enable them to make more empowered and informed decisions about their energy plan.”

What does this mean for energy retailers?

Energy retailers need to start creating policies and procedures that are ethical and have the customer’s best interests at the forefront of their core business objectives. The new proposed changes will limit the contracted discounts to sensible costs and prevent providers from double charging consumers on late fees.

Energy providers will now only be able to charge consumers on the “true cost” of a late payment, rather than increased prices of 20%, 30% or even 40%. This amendment introduced by the government will also require providers to inform customers when discounts end or change.

So, how can energy providers overcome this new challenge and continue to hold on to their customer base?

  1. Create a greater transparency with customers

Building a strong relationship with customers is important in a market where it is easy for customers to switch providers. Currently, customer satisfaction with their energy suppliers is at an all-time low, as stated by, “In the 12 months to September alone, satisfaction ratings fell between 2% and 13% for even the ten highest-performing providers.”

(The graph Electricity providers, top 11 by percentage who are ‘fairly’ or very’ satisfied,, 2018.)

This sharp drop displays an increasing lack of trust that customers are feeling towards their energy providers. Being fully open about the different offerings you provide and advising what is most appropriate for the customer’s needs can go a long way in building loyalty.


  1. Create incentives or exclusive deals

Offering customers with incentivising programs can influence them to stay with your company. Direct debt, bundled energy and email billing discounts all offer great incentives without developing stress in the mind of the consumer to meet the payment deadline for the discount.


Educating customers of all possible payment plans and options that are available can help to build a stronger rapport as well as create a better brand image. For example, educating the public that “Pay on Time” discounts are not the only way consumers can save money on their energy bills can not only save customers money but also build a greater sense of confidence that their energy retailer has their best interests at heart.

The new late fee structures proposed by the Government opens up new doors for energy retailers to build stronger relationships with customers. Being proactive and clearly communicating these changes and alternative structures can be a great stepping stone to greater prosperity for your retail operation.