Chronic Billing Disorder
While most organizations view billing as a basic business function, the reality is a bill is one of the most frequent and important forms of communication between a business and its customers. In fact, in some cases it is the only form of communication. And with more than 18 billion bills distributed each year in the U.S. alone, the importance extends to businesses across industries and geographies.
When a business is primarily focused on getting bills delivered and paid on time, the communications and customer relationship aspects of the billing process are often overlooked and misunderstood. The lack of awareness and understanding of billing can lead to "unhealthy" business practices known as chronic billing disorder (CBD). CBD negatively impacts all aspects of the billing process, but chiefly the three C's: cost, cash flow, and customer relationships. When billing practices are bad, costs go up, cash flow goes down, and customer relationships are volatile.
Specifically, the following areas erode customer relationships.
Inaccuracy: Inaccuracy in billing strikes right at the heart of a customer relationship. When the wrong bill goes to the wrong customer or a bill is misplaced it is not only a hindrance to a business; it's a hassle for the customer. Inaccuracy will anger customers and damage their perception of the business.
Inconvenience: Inconvenience can manifest itself in a number of ways in the billing process. Billing inconvenience can be attributed to anything that puts additional burden on the customer or creates additional steps, from bad formatting to access issues. Customers should be able to view their bill quickly and understand it without having to make a phone call to figure it out. Timeliness is also an issue. Imagine that you are a customer who pays your bill on time every month. But this month your bill does not arrive on time. In fact, it's so late it leaves you little time to pay before the deadline. This is a huge inconvenience for you and leads to a call to customer service.
Inflexibility: Businesses need to be able to change as the environment dictates. While they may be willing to make changes to their overall business goals, businesses that have CBD often overlook the need to adapt to the changing needs of their customers when it comes to billing. Rigidity in a business' ability to change the billing process can cause frustration and confusion among its customers. Something as simple as changing the format of a bill to make information clearer can be a complicated process if flexibility is not built into the billing system. The goal should be to make it as easy as possible for your customer to do business with you and this extends to how the bill is designed, the channels of delivery offered, and the payment channels available.
Unavailability: It seems obvious that a bill should be available for a customer but in cases of CBD, availability is limited. When businesses rely on paper bills customers lack the ability to review and manage bills electronically on their computers, phones, and mobile devices. In an age when information is available 24/7, on-the-go customers have an expectation that this will also be true of their bills. Similarly, it behooves a business to make bills quickly and easily available to employees who handle billing inquiries to ensure efficiency.
Businesses can significantly damage customer relationships by ignoring the above factors. If unaddressed, they are missing out on considerable opportunities to actually improve those relationships. There are a number of adjustments businesses can make to create a more favorable customer experience and ultimately drive greater customer relationships.
One area of critical importance is electronic billing. Migrating to e-billing allows customers to receive and pay bills online quickly. Beyond that, an effective system should make available the same web-based archival and retrieval system both to customers and to call center personnel to securely research, view, and print any invoice or statement. These features and functions go a long way toward creating a more seamless and convenient billing experience and a better overall customer relationship.
PUMA North America, the "sportlifestyle" apparel company, provides online tools that let its customers search for invoices by purchase order or invoice number; view exact replicas of the paper bill; sort bills by key criteria; and download, print and pay them. Brian Good, PUMA's senior manager of credit and accounts receivable, talks about how PUMA leverages its Web billing channel with its customers: "We are selling e-billing as an improvement in our customer service. We point out to customers that they can see their bills online, without calling us or waiting for the bill to arrive in the mail."
Businesses should also consider bill design. A well-designed bill should be easy for customers to understand and reduce the number of calls to customer service departments. Headers should be clear and easy to read to reduce customer confusion and payment amounts need to be identifiable with only a glance at each bill. Furthermore, customization to support different departments or services that a business might offer streamlines the customer experience.
At the highest level, a strategic billing system should support the addition of targeted marketing messages to bills allowing a business to personalize communication with their customers. One industry survey estimates 95 percent of customers open a bill and review it for more than three minutes. That means there is an opportunity to include other important messages in the body of the bill. PUMA, for example, prints the name of the analysts responsible for each customer account, along with their phone number, fax number and e-mail address directly on each customer bill, enhancing self-service with personalized customer service-but only when the customer feels the need.
Customer relationships are critical to the success of any business. The billing process is a valuable asset in building and enhancing those relationships if approached strategically. But when billing is viewed as a baseline function CBD strikes, the customer relationship suffers, and ultimately so does the bottom line. So bill strategically, build better customer relationships, and say no to CBD.
Mitch Rose is the VP of Marketing for Billtrust, an outsourced billing provider. Billtrust recently launched billingwellness.com, a Web site designed as a resource for finance professionals and billing-related executive.