Dominic Smith looks at the impact of online billing, both on consumers and on operators, and at how billing presentation can actually increase ARPU
Online billing has become increasingly prevalent as consumers' trust in making financial transactions over the Internet has grown.
Paper bills are seen by many as environmentally unfriendly. In a recent survey by Harris Interactive and the Marketing Workshop, 52% of online bill payers cited, "receiving bills in electronic form saves paper and energy, helping our nation's environment" as a major reason for choosing to receive them. According to the report, 39% of those now using online billing have cancelled paper billing from their banks.
In many developed countries, this enthusiasm is driven by consumers' ever-increasing familiarity with the web along with a rapidly increasing Internet penetration rate. In other underdeveloped nations where rates are a lot lower, the move online is being fuelled by the erratic nature of postal systems and the fact that the delivery of paper-based invoices to end customers is often unreliable.
In the business world, the telecoms sector has been a leading pioneer of the online approach to billing. In a recent survey of readers of Cerillion's e-newsletter, Evolve, 57% of respondents said that they were now using online billing for their telecoms services, which highlights just how pervasive this service has become.
Open and Informative
Broadly speaking, there are two quite different approaches to online billing currently in use. The first is essentially just an electronic equivalent of the main paper bill. This is typically a PDF copy of the printed invoice, either emailed or available to download online, with little or no additional functionality.
The second approach, often referred to as e-bills or e-billing, adds value by being formatted and organised in a more appropriate way for online use, enabling customers to interact intuitively with the bill in a native web format and become better informed about the information contained within.
For the end user, one of the great benefits of the latter approach is the added transparency online billing can provide as a key element in a cohesive web-based service strategy. Operators can keep customers informed of service costs, the tariffs being applied and the potential cost or benefit of adopting or migrating to new services. In today's increasingly complex converged telecoms age, this is a valuable tool within any operator's armoury.
The end objective is to encourage customers to use existing services more and to subscribe to a broader range.
There is a slight risk that this open approach may deter users if they can clearly see that a given service is costing them more than they anticipated. Typically, however, displaying this level of transparency will build increased trust between operator and user and generate enhanced levels of customer loyalty.
In this context, online billing should never be seen as a standalone option but rather as an integrated part of the overall online self-service capability that a telecoms operator can provide to its customers. In addition to electronic bill presentation and payment, such a strategy would typically also take in self-service account management; provisioning of new services; bill analysis; and trouble ticketing
Such an approach also integrates neatly with web portal strategies, complementing call centre services, helping to provide a consistently high level of customer service and promoting new service offerings to those customers.
After all, with so many products and services on offer, one of the biggest challenges for operators is making their customers aware of them. As part of a web self-care approach, online billing can help increase average revenue per user (ARPU) by supporting cross-selling and up-selling initiatives, enabling customers to browse complementary products and services without the hassle of finding a dealer, or calling customer services. Customers can then order online, and track the status of orders to completion.
Operators can further enhance the online user experience by providing self-learning knowledge bases, enabling customers to easily find the information they need without resorting to the need for assistance from a customer service representative. This approach can raise user satisfaction levels and at the same time reduce operator costs in the call centre.
Online billing also supports an interactive approach. Customers can drill down to find extra information on their itemised invoices and unbilled usage. They can also arrange, sort, filter and search their bills using familiar PC-based tools. It is therefore typically much easier for customers to understand an electronic bill than a printed paper-based one.
Going Green
Operators often see online billing as a key element in a ‘green' telecoms strategy. In addition to the obvious benefits of "paperless" online billing, the concept of self-care for customers is in itself an environmentally friendly one.
Customers can be encouraged to carry out key tasks easily themselves online such as updating personal details or ordering new services without drawing too heavily on the resources of the operator, either in terms of systems or of people. Self-care typically results in reduced customer dependency on large call centres, and, by association, radically reduces the amount of physical equipment required to service customers.
Lowering Costs
The environmental benefits of online billing are fairly clear then but what about the cost savings that online billing is reputed to bring about? As part of an integrated web self-care strategy, the approach does have the potential to optimise customer service costs by enabling more requests to be processed online, reducing the volume of calls to contact centres and allowing key resources to focus on more complex customer service requests and outbound calling.
Secure online presentation and distribution of invoices speeds up bill-processing, approval and payment, while online access to billing history simplifies storage issues and allows analysis of communication costs over time.
However, if operators are looking at adopting this approach primarily as a way of reducing their costs, a note of caution does need to be struck. Another finding of the Cerillion survey was that 27 per cent of respondents received both paper and electronic bills. One of the reasons for this may be that in certain countries it remains a legal requirement to issue paper invoices even when the customer prefers to receive them electronically.
For operators that are looking at online billing as a way of reducing their costs, this is a sobering statistic. After all, if they are producing and issuing both paper-based and equivalent electronic invoices, their billing costs may even rise slightly.
However, their customer service costs are equally likely to fall as a result of the online provision of higher quality information about the bill. Similarly, operators may find that revenues increase down the line as a result of enhanced customer loyalty generated by the provision of more transparent service offerings and a consequent reduction in churn.
Wide-Ranging Benefits
Ultimately, the continuing migration from paper-based to online billing looks set to continue. The benefits are just too far-reaching to ignore. An effective online billing strategy can help operators to build customer loyalty and trust, while tapping into additional revenue streams and reducing operational overheads.
Customers also gain from the improved customer service they receive and through the sense of enhanced control they gain over their billed and unbilled usage. While paper-based invoices will be around for some time yet, the future of telecoms billing does look set to be increasingly web-based.
Dominic Smith is marketing director of Cerillion Technologies