In a slightly surreal session at the recent ETIS Community Gathering in Budapest, the Billing and Revenue Management group decided that consumers no longer want bills. If they ever did. The discussion title was ‘bill formats and the opportunities for customer experience.’ During such a session, which you would be forgiven for thinking was about bill formats and the opportunities for customer experience, came the throw away line, “of course, consumers do not want bills anymore.” It came from an operator.
Having climbed back onto our chairs, we continued the discussion, which was focused on the Enterprise sector (of which more later). Having concluded that Enterprise customers are indeed more likely to pay quickly if the bill is clear and particularly if it matches their internal process for checking bills, a hand was raised. It trembled slightly.
“Sorry, but did you say that consumers do not want bills anymore?”
“Absolutely, of course consumers do not want bills anymore. It is too much trouble. What they want is to look at their bank statement. If the amount is about what they expected, they are happy. If it is different they want to pick up the phone.”
“So, all those years of thinking about how the bill is the only real touch point with customers and it should be harnessed better for cross sell and upsell opportunities were a waste of time?”
“Yes. Pretty much. We found this out by accident almost. We have a high percentage of online billing and their was always input from Marketing, with clever ideas for offers and such like. But it was too much trouble for customers. They got an email or a text saying that their bill was ready in the portal and not many went to look. What was interesting was that the percentage of calls to our call centre about billing was quite high.
“Then, one bill cycle, the text to customers saying their bill was ready to view in the portal did not go out. Several days later, I met a guy from customer care who was confused because the percentage of calls about billing was virtually zero. We then found out about the text not being delivered. So customers only think about the bill when they are told about the bill. Very very few call us to say they haven’t received a bill.”
It was slightly unnerving to sit in a billing session, having watched and discussed billing for over 20 years and discover that the bill is redundant.
But the bill is redundant.
A bill will always have a negative impact. And nowadays, telcos have a list of email addresses for their customers that – quite soon – will be close to 100 percent. So, if you want to offer them something, you can send them an email, why would you send them a bill.
The operator in question is doing some further research by scrapping the idea of lodging bills in a portal and simply sending a pdf of the bill once a month. He is pretty confident that very few will complain and he is even more confident that very few will view their bill. He is getting back to us on the results.
For many years, there have been a few in our industry that have held this view about the bill – you know who you are.
So, if the bill is redundant – or dead – what is the new ‘billing’?
“Payments,” said the same operator, “payments is the new billing.”
Having got over the shock, we rest our case.
Yet More Reasons For Telco Consumers To Ignore Their Bills?…
Hi Keith –
By and large I agree with your conclusions, even if I am not quite so aligned with your reasoning…
I don’t agree that – in the UK, certainly – bills continue to be unclear, nor is it difficult to navigate to the appropriate web page. Passwords for most consumers are now handled by their browsers, so that isn’t an inhibitor either. (Long gone are the days when bills were largely useless, quite apart from being impossible to navigate. One of my small contributions to the bill design project in the 90’s of a nameless former UK PTT was to ask if they had tried to photocopy their latest design iteration. The retail side had control of the project as their volumes were greater, and it hasn’t occurred to them that b&w photocopying might be important for corporate & SME clients. Many of their fiendishly clever colour co-ordinated columns and multiple interlinked sub-totals were completely unreadable when copied. [Colour photocopying not being financially reasonable in those days!])
The problem is this: telecoms bills are fit for the purpose that they were required to fulfil in a time when call charges were (a) large, (b) highly variable, and (c) their overall value constituted a significant proportion of household outgoings. (Quick comparison… back in the day, my total comms expenditure was larger than my energy/utilities costs; now, it constitutes less than 1/2 of the value, and that includes mobile, cable and broadband costs that previously didn’t exist.)
Moreover, all of my services are now based primarily on fixed cost bundles (see my previous comment and response in the separate article on BV) so the variability in my comms bill(s)s is/are usually negligible. I don’t even have to worry about making sure my ‘friends and family’ list is up to date – I’m not even sure if it is a option that is offered on my fixed line any more.
As a consequence of the factors above, my bill-related behaviour has changed. Generally, I don’t need to drill into the detail as I once used to do, and as a result I no longer open my bills and scour them.
Unlike other verticals, telecoms operators don’t seem to have noticed that this behavioural shift has occurred, even though it is rather an obvious by-product of moving to subscription/bundle based pricing.
I’m not sure that – to me, anyway – it makes any difference whether they e-mail the bill or I collect it from the web site when I need to. What is important is that the e-mail tells me what the overall bill charge is, so that I know whether or not there is any reason to dig further. (Originally they used not to tell you the headline figure in the e-mail, on the basis that this would ‘force’ consumers to visit the website… turned out – I checked with some friends in low places – that in more than one telco this was fast becoming a significant churn factor…)
Upselling and cross-selling via the bill are all good and well, but not much use if I have no routine need to read the bill in the first place. So perhaps they could consider re-purposing the bill, and driving my attention to it via the quality of the marketing offers on display? Sadly… no.
Lets return to the Tescos vs Virgin comparison… Virgin send me copious quantities of physical (mostly unpersonalised) junk mail – at least once a week on average. I don’t believe I have ever been tempted by anything on offer, and I no longer read any of them. They also send me copious quantities of (mildly personalised) e-mail. Again, previous experience has taught me that everything on offer (event ticket discounts that have always already been allocated, even if I open the mail and respond as soon as it arrives; notice of ‘new’ TV shows that I have already streamed from the US; mobile phones I don’t want; etc, etc) will not be of interest. So I don’t open these either.
What about Tescos? They send me one physical mailing a month. It is heavily personalised. I care about it, as it contains money. So I read it carefully. It sometimes (perhaps more often than I realise?!) leads me to buy things that I hadn’t planned on. They also send me intermittent (and only slightly personalised) e-mails, mostly to try and get me to do an online shop, which to date I haven’t done (with them). They know that at some point I will succumb, as my purchase patterns suggest a demographic that is likely to do so. If the e-mail arrives at approximately the right time, when the back-of-cupboard items are nearing exhaustion and need replenishing, and the offer is compelling enough, I will go for it. And they are probably right. And of course I also get vouchers at the till, the main one being petrol discount vouchers, which are automatically applied to my loyalty account.
The point being that they are using all of their customer channels – in shop, postal, electronic – in a highly sophisticated and cost effective way, to get the maximum response (and wallet share) from me. Pretty much exactly unlike telcos do.
Your point about tracking, however is a really good one. Unfortunately, it isn’t a part of telco organisational culture to understand the importance of good stochastic feedback, and it should be. [Which gives me a chance to bemoan another of my pet hobby horses: the lack of statistical and analytical knowledge and awareness endemic in telecoms because of its engineering heritage…] However, with a minimum of seasonality (unlike energy utilities) and subscription-based charging, no amount of brightly coloured usage graphs are going to help routinely draw a consumer to drill into the bill detail unless they really need to, when all of their past experience has by now taught them that if the headline figure is ‘within reasonable expectations’ nothing much will have changed.
Do Virgin do anything ‘right’? Well, their customer service is pretty good, and their broadband (reliability) is the least worst on offer at the moment. More importantly, they do make me offers that I can accept… Whenever I ring up intermittently to complain or query something, they almost always either reduce the cost of my existing offer, or upgrade me to some new feature with no charge. Which of course makes me very happy.
PS perhaps for the next layer of the discussion, we should switch the focus to collections, which – quite apart from being an often neglected element of cashflow management and financial good health – as you point out is a potentially positive outcome of happy billing…
This is a great example of analysing some information and then jumping to the wrong conclusion! But interestingly, the real answer is hidden away in this article too. Here’s my take on things:
Firstly, it’s not that the customer doesn’t want a bill – it’s just that he doesn’t want to go through all the trouble to access the almost useless bill being presented to him. This trouble often involves finding the relevant website, logging on (after finding his password!) and then finding the “eBill”. And this “eBill” is a flat PDF just the same as his old paper bill. This reluctance to fetch an eBill shouldn’t be news to anyone – back in 2010 an Infotrends survey identified that only 14% of customers wanted to visit their billers’ website to view a bill. This compared to 46% preferring email as the delivery channel.
Secondly, if the eBill made understanding the charges easier, and made paying the bill easier, there would be a very good reason for the customer to view his bill. Within an interactive PDF eBill, usage graphs can be incorporated and CSV or OFX format billing data can be embedded so that it can be uploaded into the (corporate?) customers’ spreadsheets or financial packages. For those not on direct debit, a payment button can take payments without the customer having to log on to any other payment gateway.
Do this, and the regular customer billing touch-point becomes a valuable document that customers will open, and is therefore still a great vehicle for Marketing’s up-selling and cross-selling. Especially when the links are trackable!
Interestingly, the operator in question has also stumbled onto the solution. They’re going to send out a PDF eBill via email every month. Now all they need to do is add value to that PDF and everyone will be happy; the customer (a useful, user-friendly bill), the operator’s finance department (faster payments), the customer care department (less calls) and marketing department (trackable leads)! Striata has been doing this for operators, utilities, financial institutions for 10+ years…
Of course consumers don’t ‘want’ bills. However, the fact that they have bought something gives them certain statutory rights that need to be fulfilled by the supplier. They are a necessary evil.
Firstly, there was/is the need to provide a statutory invoice (by whichever channel this may now be legally provided).
Secondly, way back in the engineering mindset of the past,…
THE REST OF THIS COMMENT WILL APPEAR AS A SEPARATE ARTICLE.
Thank you, Hugh – will publish the article in a day or two….
The hieroglyphics that are telephone bills with their codes and endless pages of detail are very hard to interpret for complex entities without being a telecom expert. Everybody has a real job to do and becoming a telecom expert is usually not part of the mission. I audit telecom bills for a living and even County entities that I work with don’t read their bills close enough to know they’re paying sales tax to themselves! It is clear nobody is really reading their bills, but I believe the real reason is complexity.
Is receiving a bill by email and setting up a bank payment order really that revolutionary? Or am I missing something? Given that you can see your itemized bill online (or with some sort of “self-service” app) to check for “suspicious charges” then… all of this is old news… It’s just that telco’s sort of get stuck in the rut… Plus, I am aware of a section of subscribers who will not setup payment orders for utilities such internet, phone because they want to pay AFTER they have received the service of the month with no problems. If I have no internet access for 2 days obviously I will stop paying, because that’s the only power I have in the relationship with my telco – unless they are fast enough to reimburse me with something worthwhile….
Stuck in the rut is, I think, right. Also, there was a lot of pressure from other departments to get involved with bills and bill formats – so the default was that bills are important and important as a communications channel. Now, there are better ones and as the world pays bills more and more automatically, the focus on the bill goes away and needs merely to be a statement. Now the ‘payment moment’ – that is important…
I agree with the thinking to a point, but shifting to a payment only method poses a danger to consumers that (albiet redundant) bills prevent. The future role of billing should be one of verification prior to the statement from the bank (post transaction). For example, I enroll in an auto pay for my cell service, but depend on billing statements to ensure no fraudulent charges are present. The ‘convenience’ of no bill is a slippery slope that I cringe at. Few companies have (or deserve) a level of trust to eliminate billing. The above mentioned company may have had few complaints missing one cycle, but I will bet multiple cycles missed will likely be a different story. Strange how consumer habits change so dramatically in such a short time. This thought process would have been inconceivable less than 10 years ago.
Thanks Bob, I think you have a good point – the bill as a verification process is good. I am sure we will get to real time alerts about unusual activity, in the same way that my credit card company tells me I am in Australia – is it really you? And certainly unthinkable until not too recently. Long Live Billing! And payments…..
This is such brilliant idea – it could have come straight out of a Monty Python sketch!
Let me summarize the argument as I understand it:
The evidence shows that customers do not want bills. And what is the evidence?
1. Customers get upset when they open hard copy bills and then they complain. Ergo, they don’t like bills
2. When they get bills by email they often don’t look at them – a clear indication that they didn’t want them in the first place.
3. When they aren’t even told that there is a bill and the money is just taken out of their bank account, they don’t complain. So clearly the absence of a bill does not trouble them, and therefore they can’t want bills, can they?
How beautiful is that?
Python economic theory is great. But this was a serious conversation and the thinking was that unless consumers see unusual activity on their bank account, line item [insert name of telco] they (or the vast majority) do not want to be bothered with going through the bill.
I would stretch this to businesses as much as consumers, it’s a universal ignorance. A business will pick over an invoice from a supplier of goods down to the penny (as it’s a subject they know a lot about), but will allow their incumbent telecom supplier to raid their coffers each month with nary a glance.
In 10 years of Telecoms I met only one company that proactively went through their telecoms invoices in any detail, and they went through it with a highlighter and a ruler to obsessive levels of detail (and still did nothing about their overcharging from an unnamed corporation).
The difference between consumer and business is that this scale of ignorance is often far grander (particularly when an ISDN system is involved that includes a PBX maintenance agreement or similar).
To expand upon the rules 1, 2 and 3, an additional rule should be:
4. When a customer changes supplier they will check every last detail of an invoice, and if any single thing does not match up to their expectations then they will likely call to complain.
Heading off those questions, ideally by calling them prior to dispatch of the invoice, is critical and should be part of any telco company initiative.
Managing the first 3 months of a customers time with a new telco is vital to maintaining good will after which they will happily return to never again looking at your beautiful invoices.
Over the years I’ve seen untold deals run into the ground by people not being able to understand “bills”, no matter the level of savings.