This piece from Market Strategist Hugh Roberts started life as a comment on the previous piece, Consumers don’t want bills – we decided it deserved a proper airing as an article in its own right.
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.
First, 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, it was deemed a good idea (seconded by the fledgling regulation/governmental oversight of the time) to provide detailed call charges, partly for the PTTs to demonstrate their mastery of the wonderful thing that was the mystery of telecoms, and partly on the basis that if consumers (account numbers/bill payers, as was) were given copious details of all of the ‘high value’ items – individual phone calls – that they had bought, they would be less likely to complain.
Cut forward x years… the majority of service offerings are now bundled. So, as has been noted above, the main thing consumers want to be able to do is quickly and easily confirm that there is nothing anomalous about the amount they are being charged each month.
Considering my own situation, I get quad-play from Virgin Media. Which results in two bills, as they can’t (yet?!) integrate the mobile data that originates from T-Mobile/EE. The landline that I have to have as a part of the bundle is generally only used for incoming calls. (Too expensive for general outgoing calls use, although Virgin do pick up some interconnect revenue from incoming traffic, plus whatever portion of the bundle is allocated as ‘line rental’. What a rip off, but that’s another story!)
Both Virgin Media and Virgin Mobile send me ‘bill ready’ notifications by e-mail, which give the overall bill total. If these are in line with expectation, I do nothing further. If I have been travelling for work, and some of the roaming charges need to be passed on as expenses, then I might well go online and get hold of the data to make an allocation. Every few months or so, I visit the website and archive off recent bills – which is exactly what I do with my other utilities – partly in case of a speculative future need to revisit the data, and partly because sometimes I need to provide a printout of a bill to ‘prove’ my existence at my current address.
It is also worth noting that I used to be able to get a data dump – as I do on my other phone line – that I could sort in a spreadsheet. Now, they only provide me with a .pdf file, that can be a lot more functionally painful if the data volumes are significant and I actually need to disassemble the detail.
A quick check with the other adults currently in the household: they all roughly follow the behaviour outlined above.
So bills are not dead, but our relationship with how we access the relevant information has effectively become commoditised.
Now… consider how this works with my brand relationships in a different vertical. Both Tescos and Sainsburys send me monthly ‘statements’. I open these, and I inspect them. Why? Because they contain ‘money’. Although this is money in the form of (personalised) vouchers that I can only use in their own stores – it can have significant value.
I also get vouchers at the till, at the same time as getting my ‘bill’. So why do they send me expensive postal offerings every month? Because they want to influence my future purchasing habits, and this is the most effective way to do it. Firstly, they exist in a competitive environment. I am certain that they have been able to work out that I use more than one supermarket chain from an analysis of my purchasing habits. (I do this as there are some items my son likes to have from one store, and some from the other. Otherwise, it is much of a muchness.) At the till, when I have just spent an arm and a leg on a bunch of food, vouchers are nice, but I am not at that point wanting to repeat the process immediately. At home, however, I am much more likely to be thinking about ‘needing’ to go shopping, and the vouchers I get there can have a significant impact on my behaviour. (Currently, Tescos – even though I hate the in store customer experience – is winning on product quality and vouchers. Otherwise, I would always go to Sainsburys, which I prefer. So it is having a real impact.)
When retailers were assessing how best to implement their loyalty schemes, one of the things they obviously researched, and subsequently cherry-picked, was best practice from other industries. And they probably looked at telecoms bills, and the detailed attention span that people used to give them. (Remember those Kodak slides from the 90’s comparing the time people focused on their bills when compared to print and TV advertising, etc?)
End result? I now peruse the loyalty statements I get from stores with the same level of attention that I used to give when looking at my phone bills…
Thinking about this (thanks ETIS!) has triggered a rather more outlandish idea.
I ‘own’ my phone number, don’t I? Well, actually, I don’t. In reality, it is part of a number range that exists in a lookup table belonging to one of the service providers. Yes, I can port my number to a different provider, but I can only give my loyalty to one provider at a time, unless I decide to have multiple numbers. In theory, a dominant impact on customer lifetime value is contract lockin, most notably for postpaid customers. In reality, both postpaid and prepaid customers are locked in to one business relationship per number, because the information architecture in the communications industry gives ‘physical’ ownership of the line number to a single service provider. Not to us, as consumers.
Given that the physical infrastructure, and the way we connect to access both content and communications services, is changing – ie multi-device, multi-channel – what if any service provider could directly access any phone number (and I don’t mean via the excitement of interconnect)? A master lookup table accessed by all network operators (which is what in some countries is a regulatory requirement for interconnect accounting) would be a start.
We would, of course, have to rethink the whole concept of local loop. But we are having to do that anyway, as the mix of FTTH, WiFi, cord cutting/fixed mobile substitution, multi screen, etc plays out. [Somewhere in here is another argument in favour of my pet hobby horse, structural separation?!] More importantly, the industry players would have to achieve the same levels of competitive sophistication and maturity as other verticals demonstrate if they want to survive.
Maybe then we could re-invent the telecoms bill to make sure it is (again) fit for purpose.