Why No One Buys Service Because of “Good Billing” but Will Cancel Service for “Bad Billing”
When companies evaluate their business, they often focus on developing and supporting their services and products. Billing is an afterthought, considered a back-office function, not part of the customer experience. It’s easy to understand why billing is neglected but also critical to recognize that “good bills” are a significant factor in a service provider’s success. In fact, billing is a major part of the relationship between service providers and their customer’s experience through their two most frequent interactions:
1) Each time the customer uses the service
2) Each time the customer receives their bill
The reality is that billing isn’t sexy. It isn’t about selling or attracting new customers; it’s about keeping the customers you have. Running a billing organization is a thankless job where the best score is zero (which is only achieved when every bill is perfect). Customer satisfaction is measured by the absence of customer comments. In billing, silence truly is golden. The rule for customers about bills is, “if you have nothing bad to say, don’t say anything.” No one is going to contact customer service to say “Your bills are awesome!” or “I love your bills and they are my favorite part of your service!” or least of all “The June bill was a masterpiece. I had it framed and hung it in my den.” Billing isn’t about making customers happy, it’s about not frustrating them, which is why customers only talk about their bill when something is wrong. It is no wonder companies find it hard to focus on billing when the goal is perfection and the rewards are silence and customers not cancelling service.
However unexciting billing may be, in order to be successful, companies need to provide their customers “good bills.” For the company a “good bill” is a bill that gets paid without inquiry, dispute or collection effort, which translates to faster cash flow, lower DSO, less G&A costs for collections and resolving disputes, and improved customer satisfaction and retention. The challenge is providing the customer what they consider to be a “good bill.” Customers want bills that are easy to validate, approve and pay.
“Good billing” can be achieved by following these 7 best practices:
3) Intuitive Presentation
4) Easy To Understand
5) Reflect The Customer’s Expectation
6) Provide Sufficient Detail
7) Simple Payment Instructions
1) Timely Delivery of Bills:
Customers want to accrue their expenses and manage their cash flow, and therefore need to receive their bills the same time each billing period with charges on the bill reflecting recent activity.
2) Accurate Information:
Customers expect their bill to be error free. One mistake anywhere on the bill-charges, calculations, dates, names, address, spelling-and the validity of the entire bill may be questioned.
3) Intuitive Presentation:
Bills should have a logical layout and flow. Customer should be able to easily navigate through their bill and its supporting detail.
4) Easy To Understand:
Customers want to understand their bill without having to reference a separate “How To Read Your Bill” document. The information on the bill should have descriptive headings and labels.
5) Reflect the Customer’s Expectation:
Customers know what they were sold and what business terms they agreed to. If the charges and descriptions on the bill are not aligned with the sales materials and contract terms the customer will dispute their bill.
Example: At a supermarket, a sign in the produce department says “$1 per peach.” The customer selects two of the largest good peaches they can find to get the best value for their money, even though they prefer small peaches. At the register the peaches are charged $1 per pound. The customer is now frustrated because had they known the real pricing they could have selected the preferred small peaches for the same price. The customer is annoyed and leaves the store without purchasing anything.
6) Provide Sufficient Detail:
Customers require their bills to provide them with data to reconcile their use, validate their activity and charges and allocate costs to different people or departments. However, the customer demands for level of detail vary greatly due to the customary and acceptable level of details in a given industry.
Example: Let’s compare two industries: 1) utilities (gas, oil, water, electric) and 2) credit cards. Utility industry billing provides minimal details about the usage or charges.Generally these bills present one month’s usage based on a unit of measurement, (i.e. Kilowatt/hour for electricity) and charge for both the commodity and delivery. This is the accepted and expected level of detail in utility bills.
Now imagine if your new credit card company sent you a bill that provided only the level of detail you see on a utility bill. Your bill would have one line detailing the number of times the card was used and total spend for the month (e.g. 15 purchases for $7,250). No other details about the purchases would be provided. This limited detail is “bad billing” in the credit card industry. You would likely dispute your bill until you were provided details for each purchase and you would cancel your service and switch to a different provider.
Now imagine if your electric company started providing details by appliance and time of day in their bills. The bill would include costs by for your lights, refrigerator, television, computer, A/C etc. broken out by time of day. This new information would likely drive new behavior. You might start turning appliances off to avoid charges for “vampire power” or even unplugging them when not using them. It may also influence your purchasing decisions to include power consumption as a significant factor. This new detail is empowering for the customer and would be a competitive advantage for the electric company. This is definitely “good billing” for the utilities industry.
7) Simple Payment Instructions:
The purpose of a bill is to get payment. Make it as easy as possible for the customer to part with their money the thing they want to do least. The proof of achieving “good billing” is in the payment.