It's a simple fact: customers rarely overlook an invoice. Smart marketers are increasingly taking advantage of this touchpoint as a vehicle for customer relationship management. And why not? As marketers search for new avenues to communicate with customers, many are realizing that they already have regular communication going out to them through bills and statements. They just need to use it more effectively.
This clever marketing vehicle is probably most effective within B2C relationships because the recipient is typically the decision-maker, unlike B2B relationships, where invoices are handled by an accounting department that is typically isolated from the decision-makers. But when those decision-makers can be reached, it's an opportunity to leverage this form of communication for product announcements, cross-sell and upsell opportunities, direct marketing and other strategic corporate messages.
"We use our bill to communicate important progressive political information to our customers every month, says Ted Volchok, vice president, billing and development for Working Assets, a long distance, credit card, online services and broadcasting company with a progressive social mission. The company also recently expanded to an online electronic bill payment system that Volchok says optimizes communication with its customers while helping to save natural resources.
Pay Up...Valued Customer
Credit card bills already come packed with offers for magazines, travel clocks and cruises, and that's just the start of it. As billing becomes more sophisticated, many companies are creating more of a CRM role for the process by implementing customer segmentation, targeting and personalization so that just the right inserts and other messages are communicated.
The point is to leverage the investment that is already being made in sending out bills for better marketing. So whether the bill is sent through traditional ground delivery, faxing, e-mailing or the Web, the opportunity to maximize the customer interaction shouldn't be missed. With ground, for example, companies can include targeted ads in the statement mailer, filling the envelope appropriately. A company can also personalize the statement or billing documents with custom messages and otherwise tailor the communication to appeal specifically to each recipient.
This type of one-to-one communication can be built on the total customer profile based on all of its various sources or perhaps from just a few specific items on a bill. An office supply retailer might print a message on the statement that reads "If you had bought our brand, you would have saved 49 cents. Why not try our brand next time?" The offer might also include a coupon.
The highest priority for bills and statements, however, remains ensuring that the amounts due are presented to customers correctly and that they are collected promptly. Internal billing departments, typically a part of the IT, accounting or finance sections, may not consider the bill a marketing tool and usually do not consult with the marketing department in its design, says stacey Friedman, director of marketing communications at printed statement provider Output Technology Solutions (OTS). The Eldorado Hills, Calif.-based company presents customer communications to more than 50 percent of all U.S. households through the more than 150 million bills and statements it processes every month.
In most companies, "those involved [in billing] are worrying about getting the data correct and getting it out the door on time," says Friedman. As a result, she says, many companies are failing to leverage the invoice effectively, leaving space blank on each bill that could be used in marketing. "They are just not maximizing their space."
To maximize space and use the statement as a marketing tool, Friedman argues that companies should outsource these functions to companies such as hers that have advanced bill production technology and sophisticated marketing capabilities. Many providers of outsourced billing services are in fact in a good position to offer higher levels of functionality, such as highlighting the amount owed in color or employing inserting technology or messaging functions that an internal IT department may lack.
Even statement design expertise is something that outsourcers can offer. "People here at OTS... have won awards for their statement design in the financial and mutual fund industry. It's a highly specialized and unique talent," says Friedman.
From Ground to EBPP...And Back Again
Most of the attention in billing lately goes to electronic bill payment and presentation (EBPP) systems. From the customer perspective, EBPP provides another level of convenience by offering an online payment option. From the company perspective, such an option speeds up distribution and reduces costs since there are no printing requirements or ground mail delivery charges.
And like other customer-facing Web applications, EBPP can be leveraged as a powerful vehicle for marketing. Unburdened by the costs and lead times of ground billing, EBPP allows marketers to launch campaigns quickly and change course just as fast if needed.
"What we have done is test the different response rates to the look of a bill, a document, and we take that same knowledge and testing methods and bring that over to the Web," says Barry Weinstein, vice president of sales, Internet services for West Bury, New York-based North Shore Agency (NSA), which incorporates proven techniques in offline products to the online world.
CRM techniques such as customization and personalization that first expanded in the virtual world are now finding application in letter shops for bill printing. Data management company Acxiom of Little Rock, Ark., acquired Access Communication Systems, a full-service, letter shop fulfillment company, in 1999. Now, it provides print and electronic distribution to about 100 businesses including Reader's Digest and BP Amoco.
"We have the ability to build what I like to call virtual documents," explains Tom Gurry, business unit leader at Acxiom. "We can make every character on every page variable from page to page within the data stream." All relevant data is in a table; it could be a price table, a discount table or a message table, for example. By programming the page composition from those tables, rather than using printers to do that, Acxiom is able to build those full-featured documents on the fly.
Such "virtual documents" give marketers great flexibility in terms of the data elements to be included on a bill. "I can give customers access to tables, and they can change them on the fly," says Gurry. Acxiom can segment customers based on any data element in those tables. While the company can implement highly complex cross-selling campaigns, a very simple example is this: Any customer who purchased something for one hundred dollars or less would receive Message A printed on their statement, while those who spent more would receive Message B.
"We don't consider ourselves a letter shop, [or] traditional mailer. We position ourselves as a data processor that [can] distribute information in any of the mediums that are available," says Gurry. "Our software has the ability to make a bill a one-to-one marketing document."
So while EBPP struggles along mired in security and privacy issues, the ground mail billing side is moving ahead on its own to deliver increasingly sophisticated CRM capabilities.
"EBPP is growing, but not as originally predicted," says Friedman. "We are a 30-year-old company, and we have this electronic arm, too, because we know that that is the future," says Friedman. "But... what we're finding is that paper is not going away any time soon."
Instead, while companies might prefer to migrate customers to an online billing arrangement, they do continue to rely on the traditional ground forms that many customers are most comfortable with. Nonetheless, if they are going to have this billing cost, they will have to maximize its value to the company--not only for collections, but for improving customer communication, as well.