Are Customers Ready to Give Up the Printed Invoice?

When it comes to billing, industry experts are touting electronic bill presentment and payment (EBPP) as the trend for the future. While e-billing can be more convenient and cost effective, there are several factors to consider when evaluating whether EBPP should be a total billing solution.

For many companies, the obvious benefit of an electronic offering is the cost savings. On average, an online bill costs a carrier around 20 cents to produce and process, which is considerably less than the cost of a printing, mailing and processing a paper bill. However, EBPP adoption rates remain low, and many are wondering if customers are as evolved as industry experts believe.

The Human Factor

Blame it on human nature, but most people only trust what is tangible, and trust is important when it comes to how people handle their financial matters. In fact, a study by Mail Moment sponsored by the United States Postal Service (USPS) shows that regardless of location or culture, 72 percent of people who live in technology-intensive countries still prefer a paper bill. Customers prefer the printed invoice for several reasons. Some want the invoice so there is a place to directly write billing information and check numbers, while others view the invoice as a reminder to pay the bill. In an August 2004 study by Forrester Research, 36 percent of participants said they just liked having a paper statement for their records.

Perhaps the biggest issue centers on the fact that people like and trust the mail. The USPS survey revealed that people actually have a deep, personal attachment to their mail. Fifty-six percent of survey respondents reported that they enjoy receiving mail, and more than 50 percent said that they look forward to discovering what's in their mailbox. Moreover, it appears that the technology revolution has escaped a large majority of this survey's participants, as almost 70 percent indicated mail holds a more personal connection for them than email and the Internet.

Customer Service

While e-billing is convenient and economical, it is missing one component that customers feel is essential – good service. When there is human contact, the customer has a sense of whether issues are resolved immediately or whether there is a need to pursue matters further. The fact is people prefer to deal with a live person when addressing billing errors or changes on their account. Companies generally provide a customer service phone number or contact information on the printed invoice as opposed to the electronic bill, which in some cases, may only provide an online problem resolution. Due to a large disparity in cost, today's Internet-based companies prefer to use customer service emails instead of telephone calls. When the average call to a call center cost companies $4.57 per call and the average cost of resolving an issue online is as little as 4 cents, it is easy to understand the motivation.

While online customer service is more cost effective, it can trigger customer dissatisfaction that could lead to an increase in churn. In general, consumers prefer not to use the Internet exclusively for customer support. The reason customers are not overwhelmingly happy with online customer service stems from a lack of immediate answers. According a study by the Insight Research Foundation, email responses can take up to 48 hours to be received by a CSR, and it can take several days to resolve a problem. When Internet users were asked what their preference was for resolving customer service issues, (the telephone, Internet or both) only five percent were comfortable with the Internet only option. Even experienced Internet users are unwilling to rely solely on the Internet.

Resolving customer service issues is imperative for every business, yet it is important to reduce the costs associated with this function. Studies show that an easy-to-read, printed invoice can drastically reduce calls to a call center and enable service providers to communicate information about new policies, procedures, products and services.

Fraud Detection

Security is another issue that hampers the progress of commerce on the Internet overall as many companies deal with the problems of identity theft, spam and phishing. Even with encrypted sites, it seems hackers remain one step ahead of the latest technology.

In the study conducted by Forrester, 30 percent of the participants cited security concerns when it came to putting financial information online. Eight in 10 online customers surveyed do not pay bills online, and 80 percent of those people felt they would never pay bills online.

Motivational Measures

More than 1 million residential customers will register for online phone bill payment service this year, saving carriers an estimated $36 million according to Insight Research Foundation. While the cost savings cannot be ignored, it is important to recognize that it may be a while before the printed bill becomes obsolete.

The obstacles for service providers seeking to offer online customer care and EBPP are truly contingent upon the customers being served. For instance:

• Can the customer receive and pay bills on the Internet?
• Can they sign up for and change their services using the Internet?
• Can the customer find answers to their questions online about their accounts, such as checking payments, balances, and invoices?
• Can a customer learn about and purchase products from a catalog online?

For now, all indications are that the printed invoice and the Internet will work hand-in-hand to help businesses serve their customers. As online options and customer security begin to improve, more people will move to those solutions. However, it is critical for companies to still consider the printed invoice and all its benefits as a key to success in keeping customers.

Ron Whaley serves as vice president of sales and marketing for OSG Billing Services. To contact Mr. Whaley please call 201-871-1100 extension 207 or email him at ron.w@osgbilling.com