Trial Period Helps More Verizon Customers Accept Paperless Billing

To drive continued adoption of electronic billing, providers must expand beyond traditional delivery channels to meet customers at their preferred payment point. That does not mean, however, that telecom providers must forfeit their online customer relationships. Expanding online delivery options can be a great success, as evidenced by the results Verizon experienced using CheckFree’s e-billing approach to facilitate electronic billing adoption via bank websites.

Give Customers a Choice

Telecommunications service providers were early implementers of electronic billing and payment, and have contributed significantly to increasing consumer adoption. According to Forrester Research’s January 2007 report “EBPP Forecast: 2006 to 2011,” 38 percent of online households paid bills online in 2005. By 2011, 63 percent of Internet households will pay bills online, representing a five-year increase of 63 percent as compared to 2006, according to the report.

Traditionally, telecom providers have driven customers to their own websites for bill receipt and payment, an approach known as the “biller-direct” model. But today’s consumers increasingly want to pay all their bills at one central bank website—the “consolidated” model. Forrester predicts that the majority of online payment growth over the next five years will come from users paying on bank websites.

Offering consumers the option to pay bills online at either their bank’s or their telecom provider’s website improves the customer experience and increases customer satisfaction. Persuading consumers also to receive bills online can enhance those benefits, while greatly reducing costs. According to CheckFree estimates, the average cost savings generated when a consumer decides to switch from a paper bill to an electronic bill is nearly $1 per bill, and in the telecommunications industry cost savings can reach $20 per customer annually. Given these inherent benefits, the telecom provider’s primary goal should not be driving customers to a particular channel—whether biller-direct or consolidated. What is most important is convincing customers to receive bills electronically and ultimately to turn off paper statements using either channel.

Encourage More Verizon Customers to Adopt E-Bills

While online bill payment has become a more mainstream practice, the adoption of electronic bills continues to be a challenge. Understanding the benefits of converting more customers to paperless billing, Verizon sought a solution that would encourage more consumers to receive their Verizon bills electronically at their bank site while choosing to “turn off” their paper bill.

Despite the benefits that electronic billing and payment adopters tend to enjoy, it remains vexing for companies like Verizon to convince their customers that paperless is the way to go. Studies undertaken by CheckFree Research Services determined that the primary barriers to e-bill adoption are that consumers do not fully understand what an e-bill is, perceive that e-bills are difficult or time consuming to set up, do not understand how e-bills work and are not comfortable eliminating their paper bills. In fact, nearly 60 percent of respondents stated they did not want to stop receiving paper bills, and more than 40 percent of them voiced record-keeping concerns as the reason.

Verizon on Trial

Fortunately for billers, these same studies provided insight into a potential solution to increase e-bill adoption: a trial period during which consumers could receive both e-bills and paper bills. Seventy percent of the survey participants said they would be likely to consider a trial period if it were offered.

Responding to this research, CheckFree launched CheckFree e-Bill Distribution with Consumer Choice in August 2006. This offering allows customers to enroll in a trial period during which they can receive both a paper version of their bill and an electronic one at their bank’s website. This approach allows consumers to increase their comfort with e-bills and paperless billing, thereby increasing e-bill awareness and, in theory, generating a substantial lift in the number of customers suppressing paper bills.

Verizon was the first company to put this theory to the test. It partnered with CheckFree to offer a three-month trial period, which began in August 2006 and was made available to all Verizon customers who bank online with a leading national bank.

The Verdict



As a result of implementing the program, Verizon has increased customer awareness of e-bills and, in turn, has generated an overall incremental increase in the number of customers suppressing paper bills. “The trial period features available to Verizon customers expand the potential for adoption of Verizon e-bills by allowing our customers to experience the benefits of e-bills first-hand before turning off paper bills,” says Angeline DePauw, director of electronic remittance for Verizon. “We are seeing a very positive initial response to these features among our customers.”

By offering a trial period, Verizon has seen a double-digit increase in the average number of e-bills activated each day. Verizon attributes the positive results to two primary factors. First, the program allows it to reach more consumers. Verizon has the tools it needs to serve the growing number of consumers who prefer to receive and pay bills online at their bank’s website. Offering e-bills through the bank channel in combination with a trial period is a key factor in moving more consumers toward paperless billing.

Second, the trial period allowed Verizon’s customers to become more comfortable with e-bills and paperless billing. More than 75 percent of Verizon customers presented with the trial opted to suppress their paper bill either immediately or at some point during the trial period. Even more encouraging was the fact that only a small percentage of consumers explicitly requested to revert back to paper bills. Consumers who took no action during the three-month trial were automatically returned to paper bills, and of those, 5 percent then chose to go paperless.

Marketing and Loyalty Improve

According to a January 2007 survey conducted by the Marketing Workshop and Harris Interactive on behalf of CheckFree, consumers who receive e-bills indicate that the service has improved their relationship with the company from which they receive the bill. Interestingly, the consumers reporting the highest levels of satisfaction with the company were those who received e-bills at a bank website.

For example, 25 percent of consumers who received e-bills directly at a billing company’s website indicated that the service had improved their relationship with that company. But that number rose to 35 percent among consumers who received their e-bill at a bank website. Among the surveyed consumers, 26 percent who received e-bills directly at a company website indicated they were less likely to switch to a competitor’s service, while a full 39 percent of consumers who received e-bills at a bank website said the same.

A willingness to meet consumers where they prefer to receive and pay their bills generates clear benefits for the company issuing the bill, no matter where it is received. According to the January survey, 72 percent of consumers who receive bills online at their bank website visit their individual biller’s websites to review account details, check payment status and access monthly statements.

E-bills can include features such as embedded links. These allow consumers to move directly to the company website from within their online bill in order to access information or purchase upgrades. This simple linkage ensures that consumers can maintain a close relationship with the companies that provide them service.

Cost Savings Increase

The number of unsubscribed users—consumers who are currently eligible for an e-bill but are not receiving one—would steadily decrease. With a continued incremental e-billing growth rate of between 3 and 5 percent, a company could expect cost savings of between $15,000 and $25,000 per year for each financial institution at which its e-bills were available.

Through a combination of trial-period capabilities and ongoing messaging, Verizon is continuing to educate customers about the benefits of moving from just paying bills online to receiving bills online and, ultimately, to adopting paperless billing. Working with CheckFree, Verizon was able to give its customers the flexibility needed to ensure their satisfaction and increased loyalty, while minimizing processing costs and driving consumer adoption of paperless billing.