• April 1, 2009
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Bad Billing Will Kill Off Your Biggest Buyers

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For more of the April 2009 edition of CRM magazine, please click here.

In dealing with telecommunications service providers, dissatisfaction is a familiar consumer refrain, often due to confusing billing statements. Turns out, however, that the pain is felt among enterprise customers as well, with 10 percent dumping their providers due to billing issues, according to a report by management consultancy Accenture.

Carriers, the report says, are aware of a huge discrepancy between the level of service they intend to provide and the actual level of service they deliver. In fact, when asked to name the most-important attribute of service, 82 percent of carriers cited “ease of understanding the bill”—but only 11 percent said they achieved that ease.

The satisfaction gap gets worse: 62 percent of enterprise customers said telecom bills should be easily understood, but only 22 percent said the bills actually were. Another disconnect: A large share of customers (84 percent) considered “efficiency of inquiry resolution” important; only 12 percent of carriers agreed.

Blame a lack of analytics: More than half the carriers said they did not measure enterprise customer satisfaction with the billing experience. “Particularly in the current economic climate, it’s truly surprising that more attention isn’t being paid to billing,” said Rob Purks, leader of Accenture’s North American billing practice, in a statement. “Carriers that don’t take full advantage of effective billing solutions—which can help them spur revenue growth, increase customer retention, reduce operating costs, and ultimately fend off competitors—are…leaving money on the table.”

Some business-process vendors know the story. “When done properly, bills can create a dialogue with customers, helping reduce churn, build loyalty, and improve customer service,” says Chris Cherry, director of vertical-strategy communications for Pitney Bowes Business Insight. “An easy-to-understand bill can increase customer satisfaction and help reduce expenses.”

In a follow-up interview, Purks says some results of the study were unexpected. “The bigger surprise is the correlation between retention and bill resolution,” he says. “Almost 5 percent of revenue at the enterprise end, and 9 percent among consumers, is lost to churn due to customer service and billing issues.”

Purks suggests steps that carriers can take to align their billing processes with the needs of their enterprise customers: Conduct quantitative and qualitative research to better understand what those customers want—and value—in terms of billing; direct more attention to those findings; bolster the self-service capabilities of billing portals; and improve business-support systems.

Cherry notes that small details can make a difference: large-print bills for the visually impaired, or color laser printing for big spenders. Customers in one study, he says, paid bills two days faster when a highlight cover was used.
Purks says change is coming. “Companies are becoming more aware,” he says. “Investment is being made, but not in the right places…. [It’s] about stepping back and understanding customer experience. Billing is more than just a necessary business process.”

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