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Electronic Billing: The who, what, where and when you'll arrive...
Delivering A Positive ‘Statement’
Despite a 10-year period of widespread speculation and slower-than-anticipated growth, forecasts are now particularly bright for the Electronic Billing industry. In fact, a recent Jupiter Research report indicated that over the next three years, online bill viewing and payment would become the fastest-growing Internet application.
In 2006, users in more than 50 million households around the world have viewed bills online with those in over 52 million homes having both viewed and paid bills online at least once. This represents a 23-percent compound annual growth rate since 2001 -- rather impressive figures for the industry once considered the Internet‘s also-ran.
In fact, forecasts suggest that the number of Electronic Billing Presentment and Payment (EBPP) users will increase by 63 percent over the next five years. The industry is gaining ground and fast becoming the presentment and payment method of choice for a growing number of consumers and businesses.
And Convenience for All
It’s no coincidence that as people look for quicker solutions to everyday tasks, the number of subscribers making online payments has actually surpassed that of those enrolling in both presentment and payment solutions. This recent jump is primarily due to the increased number of payors using their online banking sites.
Whether consumer or commercial entity, ebilling offers total control of personal finances and the ability to make electronic payments with ease. Thus, electronic billing solution works on both ends of cyber space. Billers benefit from the ability to provide more options to consumers. It builds customer relations and stickiness, as well as increased cash flow.
Many studies over the years have shown that most customer support calls are related to billing issues. Electronic billing minimizes these calls and offers more of the information often requested of customer service representatives (CSRs). With EBPP, customers are more inclined to pay quickly without the aid of a CSR (News - Alert). In fact, most AutoPay customers will only pay their bills and not even view bill details unless there is a noticeable discrepancy in the monthly charge.
EBPP can eliminate overhead and printed bill production costs and help avoid constant postage increases. Billers recognize reduced bill collection costs by automating the entire payment process, including integration of accounts receivable and billing systems.
We Who Hesitate…
Billers not yet offering electronic billing may soon find themselves in short supply. The reason many businesses choose to deploy an EBPP solution is because the competition has already done so -- much to their customers’ satisfaction. The formula is clear -- companies are gaining and retaining customers simply by offering as many options as possible.
For first-time companies ready to offer an ebilling solution, it is important to have a sound launch strategy in place designed to increase customer awareness and crossover. Plans should include:
· Distribution of printed invoices to inform customers prior to the product launch.
· A message detailing the ease of use, outlining security settings and promoting the no-fee policy.
· A Web site link announcing the launch.
· An insert (bill stuffer) included with the printed bill with “how-to” information.
Such enrollment offerings as “free minutes” or monetary credits have been effective. While some, on the other hand, institute disadvantages in the form of service fees to receive mailed bills. While disincentives may be effective, those looking to reduce turnover and churn are encouraged to instead create an affirmative incentive for customers.
Ready for Business
In the business-to-business environment, companies have been quickly ramping up to employ an Electronic Invoicing Presentment and Payment, or EIPP. Despite its similarities with an EBPP, an EIPP solution initiates a whole new range of benefits. For example, billers in the B-2-B arena recognize a savings in processing costs and a reduction in Days Sales Outstanding (DSO). In addition, it enhances options for payment tracking and customer service. Businesses can now track multiple invoices along various stages of completion and make partial payments. For some, the mere ability to control the timing of payments for multiple open invoices is incentive enough to employ an EIPP.
For years studies have shown that most customer support calls are related to billing issues. Therefore, an EBPP solution increases the likelihood of reduced customer support expenses. Electronic billing minimizes these calls and offers more of the information customers often request when contacting a CSR. In the event a customer does need to contact a CSR, the electronic view of the bill will often be available to both biller and payor, resulting in consistency, reduced customer dissatisfaction and shorter call times.
While business-to-business solutions may also require a ramp-up plan, most B-2-B companies will have a smoother transition to electronic billing. Electronic applications are already common in the workplace. Very often, someone has already studied the potential benefits and has implemented the more efficient system. In addition, EIPP benefits are more readily apparent. The ability to control the timing of payments for multiple open invoices and/or contracts at once is often incentive enough. This suggests that printing copies of invoices for record keeping and viewing statements at anytime are important benefits.
Recent estimates suggest that electronic bill payment will grow at an annual rate of 40 percent. Billers and consumer service providers alike are encouraging this growth by educating consumers on the benefits of receiving and paying bills online. In many ways, biller direct sites (those that direct consumers to the biller’s site to view bills and make payments) are allaying consumer concerns about security and easing them into the process, further increasing demand.
The ‘e’ Generation
Perhaps the most important reason for employing an online solution is the aging of the Gen-X and Gen-Y demographics. These two groups play a tremendous role in potential adoption. Thesy have ‘virtually’ grown up in a technology-based culture and they are far more likely to shop and pay their bills online.
According to Forrester Research (News - Alert), “Gen Y-ers” will spur the growth of electronic bill presentment and payment, as this generation is expected to see a five-year growth rate of 157 percent from 2006 to 2011. Many companies already consider it mandatory to offer an electronic billing solution, particularly those with a customer base between 18 and 39. Recent estimates suggest that electronic bill payment will grow at an annual rate of 40 percent.
Maximizing Effectiveness
Offering a variety of payment options is the key to making your online solution more attractive to customers. One such option is AutoPay. For customers who receive consistent bill charges, AutoPay is a simple alternative that allows scheduling of payments in advance while the system does the rest. Best of all, the customer can view the history of current and past bills and payments whenever they choose. Any customer with access to a computer and the Internet will have access to his or her information.
As with the business-to-consumer model, payment options should not be limited. Most businesses still prefer to pay from checking accounts, making the acceptance of ACH payments critical. Offering alternative payment options such as credit cards will provide offer the customer with more flexibility to make more frequent purchases.
The ease associated with this system cannot be under emphasized. In fact, most AutoPay customers will only pay their bill and not even view their bill details unless there is a noticeable discrepancy in the monthly charge. Having an electronic bill similar to the paper one posted to their account allows the user to check for errors in real time for easy resolution.
Increasing Product Awareness
For first-time companies that are new to offering an ebilling solution, it is important to have a sound launch strategy in place designed to increase customer awareness and crossover. When instituting a business-to-consumer model, it is essential that potential enrollees receive advance notice.
Distributing printed invoices to inform customers of the product launch is a proven strategy for ramping up awareness and should begin months before the actual implementation. This tactic has successfully increased adoption with many telecom providers. A sample campaign often includes a “teaser” message on the front of the printed bill and on the company Web site relaying the message that “due to customer demand, electronic billing will be available soon!”
A message detailing the ease of use and outlining security settings will often follow. It will also, of course, promote that there is no charge to customers. When the product is ready to launch, a link is posted on the Web site announcing the launch and an insert (bill stuffer) is included with the printed bills that depicts a computer screen image with “how to” information on using the new solution.
Another successful tool has been to offer incentives such as “free minutes” or monetary credits to those who enroll. On the other hand, some companies employ a disadvantage for receiving mailed, printed bills by charging fees for the service. While a disincentive may be effective, those businesses looking to reduce turnover and churn are encouraged to take a more positive approach and create an affirmative incentive for their customers.
The ‘e’ Generation
Perhaps the most important reason for employing an online solution is the aging of the Gen-X and Gen-Y demographics. These two groups play a huge role in potential adoption. The reality is, these two generations have grown up in a technology-based culture and they are far more likely to shop and pay their bills online.
According to Forrester Research, “Gen Y-ers” will spur the growth of electronic bill presentment and payment, as this generation is expected to see a five-year growth rate of 157 percent from 2006 to 2011. Many companies now consider it mandatory to offer an electronic billing solution, particularly those with a customer base between 18 and 39.
Better Living through Electronic Billing!
Electronic billing is strengthening the relationship between billers and customers. The relationship is enriched with offerings of bill delivery, archival (history) records and multiple payment options. It creates additional opportunities for interaction with customers, including additional cross- and up-sell opportunities. The enrolled customer is more inclined to be a loyal one and is more likely to purchase additional products if their electronic billing user-experience is easy and useful.
For information about electronic billing or to learn about OSG Electronic BillingSM options, please email Steven C. Dubner, Director of Strategic Alliances for OSG Billing Services (News - Alert) at steven.d@osgbilling.com.
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