The world of document management is a whole different piece of the billing equation. Collecting revenue for services used is as critical as mediation and rating, but it is often overlooked.
Today, however, providers are beginning to see that the printed and electronic output from their billing process that touches the customer each month is a powerful communications channel that cannot be ignored but instead should be optimized to engage the customer and better the business as a whole.
Working Together
When the printer is not involved in enhancements and upgrades to the billing software, unexpected problems can and do occur. “It stops the production of the bill dead,” says John Clark, senior vice president of Financial Statement Services Inc. (FSSI).
To enable easy data delivery for bill production, billing software providers need to come to the table early on with document management companies and determine the telecom provider’s needs when it goes to print.
OSG Billing Services works with about 40 providers that use Info Directions as their billing platform. Initially, when OSG began working with Info Directions’ customers, it managed output needs on an individual basis. By the time the company began working with its sixth or seventh customer that employed Info Directions’ software, says Ron Whaley, vice president of sales and marketing at OSG, his company and Info Directions really began to discuss what the output files from the software required for printing.
More often than not, this is the norm—billing software providers and document management providers only sit down at the table once they have a number of customers in common. At first, as in OSG’s experience with Info Directions, the initial relationship usually includes the document management provider asking the software provider to make some changes to its output file.
However, more mature relationships might instead look like the case where Info Directions recently included OSG in the product development discussions to build file extract capabilities into its new .Net product. The goal is to increase the ability for provider customers to get files to the printer and decrease the time it takes for providers to download or obtain the file that has to be sent for print. Whaley suggests that in the past, a printer likely would not have had this discussion with a bill software provider from the get-go; rather, it would have been at the end of the process and largely ignored during the build-out of the product.
FSSI’s Dick O’Neil, senior vice president of marketing, says making changes to the billing software can amount to big money, but these changes must be replicated all the way through to the print process, which can sometimes be an even bigger and costlier proposition.
Marketing: Maximizing the Bill Real Estate
Perhaps the biggest trend in bill design and production today is maximizing the full potential of the bill.
Providers want to use the bill to add upselling and cross-selling materials that aim to sell new or more services.
“The main focus is to cross-sell and increase the marketing presence of the bill,” says FSSI’s Clark. “A lot of people want to turn that bill into a revenue center instead of a cost center.” FSSI employs Exstream Software’s Dialog product for campaign management to tie a message to a particular client.
Tom Dailey, vice president of Relizon’s Billing Solutions Group, adds that the one question providers are focusing on today is: “How do I make the statement work harder for me?” He says this really boils down to having a strategic plan to create a quicker quote-to-cash cycle, the time lapse between when the provider quotes the bill amount and when the customer pays. This would involve understanding the marketing opportunities on the bill.
But one critical element of marketing is to preserve the integrity of the bill purpose and content. “The initial intent of the document has to be preserved,” Dailey explains, so the provider can collect or send out the message intended. “The delicate balance is if you overdo that informational and servicing correspondence to look too much like a direct mail piece, and you lose that original intent.”
Highly personalized and targeted messages are in vogue, but document providers are limited by the data that can be extracted from the billing system. “We are only as good as the data supplied to us by the client or billing engine,” says Mike Joseph, manager of the product management group at DST Output.
According to the Direct Marketing Association, direct marketing in all industries accounted for $2 trillion in 2002. But new legislation, such as the national do-not-call lists, is threatening this industry. The association reveals that states introduced more than 2,700 privacy bills in 2002, while Congress introduced nearly 50 bills and regulations pertaining to how marketing information is used. Critical channels that providers have for marketing to customers are being taken away, says Bernie Gracy, vice president of professional services for document management technologies at Pitney Bowes, so many companies are looking at direct and transactional mail to communicate with and market to customers.
Companies like Verizon are tracking the impact of bill layout and marketing on the percentage of customers who are driven online because of messages on the printed bill (see “Out With the Old, In With the New").
In addition to adding more marketing on the bill, providers are increasingly trying to become channel-agnostic. Regardless of how they reach out to a customer—via printed bill or electronic statement—companies want to be aware of how outbound and inbound communications occur. For example, is a customer receiving a printed bill but paying online? Or does the customer receive an e-mail notification and then pay the bill by mail? Providers also want to identify their more profitable customer segments.
Improving the ROI
While marketing to customers on the bill seems to be a high priority for most providers, decreasing the cost of communicating with customers is certainly as important.
When customers have a question about their bill, they are likely to call the customer service number. However, the customer service representative may not have the same view of the bill as the customer. This can create confusion and result in longer call times, which ultimately costs providers more money and decreased productivity in the contact center.
Besides that, providers will often have various communications with customers, ranging from initial statements to dunning letters. Sometimes these messages can cross paths in the mail, and a provider may find itself sending out a dunning letter to someone whose payment is actually on its way. This can become expensive for providers. Yet simple bar code technology has made it possible to track the mail at a much more granular level with great efficiency and eliminate some of these unnecessary mailings and measures.
DST Output’s Rich Langan, market manager, says bar codes are being placed on statements to predict when customers will receive them or remit payment back to the provider. This technology is also helping providers predict call volume increases in the contact center. In addition, Pitney Bowes’ Gracy says this can be a valuable tool for marketing departments, which can track and plan campaigns around when customers receive marketing collateral.
This is possible through the U.S. Postal Service’s Postnet and Planet Codes. By using these two tracking numbers, the location and movement of a piece of mail can be tracked as it passes through the different postal processing facilities. The tracking information is sent to a centralized network service that collects the data and sends it to the mailer as an electronic file, or the mailer can access this information online via the Planet Codes site.
At FSSI, O’Neil explains that each statement receives a unique identifier and is synchronized with the Planet Codes/Confirm process. The codes were originally developed for Postal Service internal performance audits, but they are now benefiting billers that need to track statements and marketing materials.
The benefits of intelligent mail capabilities are being passed from document management companies to telecom providers via online access to mail status information that allows providers to track jobs. This ultimately gives providers more vision into the mail process, so they can avoid the cost of sending out a dunning letter or truck roll to customers that have remitted payment.
Providers are also focused on linking the bill process with other functions across the enterprise. This mail tracking capability is enabling greater integration. For example, Pitney Bowes has integrated with Siebel to allow the CSR to see the bill.
Gracy notes that one common dispute is late fees. He relates that at one of Pitney Bowes’ financial clients, 1 million of its 4 million total customers are late paying their bill. After the customer remits the tardy payment by mail, a collections notice still hits the streets, which can lead to a call to customer service. Imagine the cost of 1 million such calls.
While the mail tracking capabilities are an important new aspect of the production process, the data received about this information must be fed back into a system of record that will be able to suppress collections letters, for example, or alert a CSR that a dunning letter was purged because the customer remitted a payment. The tracked data must be interfaced with other key systems to take the appropriate action or alert the correct people in the process.
Providers are also seeking to abide by regulations, such as the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which addresses the privacy of health care information. Installing cameras at the front and back end of the mailing process ensures this privacy in accordance with the regulations for various industries by proving what information about which customers went to whom and where. These cameras also help to ensure job quality by watching for duplicate bills, for example.
Relizon recently formed an alliance with Bowe Bell and Howell for use of this machine vision technology. It can read one- and two-dimensional (2D) barcodes and OCR image patterns. The 2D barcodes allow 1.1 KB of data to fit in a space the size of a postage stamp on the bill. Providers can glean critical tracking and control data, such as whether each bill contains the correct information or where the bill is in the delivery process.
O’Neil believes increased security and privacy regulations will impact document production and mailing in the future. “It is definitely putting more burden on providers,” he says.
Dailey says that email blasting will pose some interesting issues now because of the privacy and security concerns that are looming. In August 2002, according to the Direct Marketing Association, 24 states had anti-spam legislation on the books. Since there is a lot of pressure to empower the public against receiving telemarketing calls or spam, this will ultimately affect how providers can reach out to win back customers who have churned, or cross-sell or upsell to those who remain with them. “I think there’s a lot more scrutiny,” Dailey says, about how companies communicate with customers.
Pleasing the Human Eye
While color is the next big change that telecommunications providers are looking at in bill production, most say they are still testing the waters.
According to DST Output’s Joseph, there is empirical evidence that color does reduce the payment time, and that it can bring a 30 percent to 50 percent improvement in the response rate. And Whaley at OSG states that if a provider highlights the due date on a bill using color, the payment is remitted quicker. Xerox’s Shelley Sweeney, vice president and general manager of the Service Bureau Segment, Worldwide Graphic Arts Business, says that one Xerox client that uses red on its late billing statements receives a quicker turnaround—an average of two days faster—which ultimately improves cash flow. She adds that clients that use highlight color to print direct marketing messages are achieving improvements in response rates greater than 400 percent. In sum, Sweeney says, “Color has been shown to improve cash flow, get clients to pay bills sooner, reduce customer service calls, improve customer satisfaction and reduce operating costs.”
For telecommunications providers, the use of color boils down to speed and cost. OSG’s Whaley says many providers are asking about color but have second thoughts about the cost implications. He states that OSG is 2–4 years away from moving to full color. “As those costs come down, you’re going to see more color,” Whaley says.
FSSI’s Clark says providers can add some color without adding much cost by using spot color or paper preprinted with color. Currently, Clark says, most providers are adding some spot or preprinted color on the first page, with black and white on subsequent pages. Most providers like to add this color in their logo or brand, according to O’Neil, with red, green and blue being the most common at FSSI. Clark believes full color will not reach widespread use until the cost is comparable to black and white.
DST Output’s Langan points out that bundling drives a higher statement value with customers that likely spend more with a single provider. Thus, providers would be more apt to tolerate higher bill production costs, because the value of the statement and hence the return per statement is somewhat higher than the norm.
“Everyone is talking about [color], but not everyone is doing it,” says Pitney Bowes’ Gracy. “They’re all dipping their toes.”
Wes Ervin, media and public relations manager at DST Output, says the typical mistake made in the telecom industry when considering color is comparing cost per image versus rethinking the bill, which might include cutting the page count by redesigning the statement to eliminate information customers deem irrelevant. A shortened bill allows providers to trim their mailing costs and might allow them to include color without increasing the overall cost of the mailing. Ervin says the cost per image to print in color is narrowing to that of black and white; however, he says providers really need to trim costs by rethinking their statements and coming up with innovative ways to streamline their bills. “If you’re playing the game of comparing cost per image, you’re not going to get anywhere,” Ervin says.
Until the cost for color comes down, providers may be relegated to full color inserts to market additional products and services. Whaley notes some of them believe that inserts will never help grow the business, yet he has seen first-hand the impact of inserts.
One OSG provider customer with 50,000 subscribers put an insert in bills for three months in a row, which resulted in 400 new customers to the program and added $16,000 of revenue per month, or $192,000 per year in incremental revenue.
Another provider customer with 25,000 subscribers signed up 500 new customers over the course of a similar marketing program, earning an additional $15,000 per month or $180,000 per year. This result is impressive, considering the provider only spent $4,600 on the program, which was the graphic design cost from OSG for creating the bill insert.
As for graphics, Langan states that the bill is about building ongoing relationships with customers. Thus, “humanizing the bill” becomes a major driver for the use of graphics. For example, placing a graphic of a CSR on the bill gives a more human touch than plain text. And graphics can be personalized by demographics or even according to the individual.
Printed bills with a graphic have higher adoption rates, according to OSG’s Whaley. He also states that a customer is more likely to call a number next to a graphic. Of OSG’s 223 customers, about 10 percent are using graphics. One new OSG customer is personalizing these graphics for each recipient to promote new cell phone handsets.
Despite the evidence that color and graphics both have a positive impact on the bill, some providers still seek nothing beyond a black and white statement. “There is still some resistance,”
Whaley notes, but “it’s all about the business plan.”
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Out With the Old, In With the New In its recent bill redesign process, Verizon asked the age-old question: Who owns the customer? In a bold move, Verizon determined that marketing owns the customer. For Peggy Yadon, Verizon’s director of IT, billing and revenue assurance, and for the countless developers with whom she worked, revamping the bill was about giving marketing the tool to really speak to the end customer one-on-one through more personalized and targeted messages in a clearer format. Because of Verizon’s previous mergers and acquisitions, the company’s bills were a myriad of sizes, colors, and fonts, but today the company is consolidating its bills into one format with a single, branded look and feel. The process to redesign the bill started in October 2002 and is moving into a three-phase rollout. In the initial phase, which began in May, Verizon focused on the first two pages of the bill, which receive the most attention from customers. Phase one included making the bill more user-friendly by changing the font and making the invoice design crisper, Yadon says. Verizon also sought to standardize the information on the bill, such as how to reach the company, which appears on page 2, and used left justification of the text on the first page of the bill to allow room for personalized or customized messages on the right side. The second phase of the bill enhancement, planned to begin in August and last into 2004, will focus on the interior of the bill. It will include making the mandatory regulated sections of the bill more readable and easier to understand. Phase three, to begin in 2004, will include more customized billing capabilities. This is slated to include abbreviating charges on the bill at a customer’s request or sorting the charge details in a different manner for the customer—in alphabetic order or by region, for example. Another of Verizon’s goals is to present the same bill to its customer service representatives as it is seen by the customer, including the same marketing messages the customer sees. In some cases, that capability exists within the company today, but it is not enterprise-wide. Verizon is already placing graphics on its bill. The company includes such graphics as a bold exclamation point near text encouraging online registration. It also includes a speeding envelope graphic to promote the direct payment option. But Yadon is quick to point out that graphics can be overdone and can run the risk of cluttering the bill, so their placement on the statement requires careful planning. She also notes that Verizon considered using color on its bills but decided that it is still early for that. The print technologies “just aren’t really there yet,” Yadon says. “With the millions of bills we produce, the speed needs to be there. We were told it would be two to three years in the future before they would be there.” |
