The thing most people don’t know about billing issues is that they rarely have anything to do with billing. Of course, customers review, analyze and evaluate their bills. They will complain when they find something wrong. But once the company is providing reasonably “good bills” to its customers where one plus one equals two, customer complaints will have little to do with the billing process.

The basic tenet of billing is that “the bill is the ocean,” which means everything a company does flows into and eventually appears on the customer’s bill. Therefore, the customer’s billing complaints will reveal problems upstream in areas such as advertising, marketing, sales process, service offering, operations, etc. In this way, customer billing issues should be viewed as an internal diagnostic tool. Billing issues provide timely, useful information from current customers who provide detailed information and are passionate enough about the issue to inform the company of the issue and demand resolution. Resolving them will have real impact on the business and can be measured simply by tracking the reduction in billing issues.

There is no real trick to “listening to your bills”. You don’t need to learn a new language, and there is no secret decoder ring or babel fish required. You just have to listen — really listen — to hear what they are telling you. The obvious issue with billing complaints is the customer is unhappy and won’t pay or wants a refund, which leads to the company becoming unhappy. To make everyone happy again, the company needs to respond to the customer and solve the issue.

Complaints need to be resolved at both the micro and the macros levels. The micro level is the immediate issue and the goal is to satisfy the customer. The macro level requires more time to review and categorize the documented complaints and issues for a defined period of time and then to analyze, identify and resolve the major issues. The most common and significant issues can be identified by applying Pareto Analysesand the Pareto Principle (the 80/20 rule). Once the issues to be focused on are identified, apply Root Cause Analyses (RCA) to understand why, how and when the problem occurs. Once you have the details from the RCA then the company can permanently resolve the issue.

Below are three cases where billing complaints identified other issues and how the companies responded.

1. Blockbuster: The first case is a true story that you will likely remember and may have experienced. It is an example where a company refused to “listen to their bills” even when those very bills were screaming at them about what was wrong with their advertising. (Ironically, the ads were designed to increase sales by solving the customer’s most frequent complaint.)

On January 1, 2005, the video rental chain Blockbuster launched a massive advertising campaign promoting “No more late fees.” The promotion was aimed directly at the number one customer complaint, Unlike the heavily regulated prescription drug industry where ads must include every single possible bad thing that might happen to you, the Blockbuster ads didn’t provide the complete details of the new policy. Customers were happy to not be charged late fees when they returned the video, dvd, game cartridge etc., a few days late. However, the customers were shocked, angry and felt deceived and ripped off when they were charged the full retail cost (less the rental charge) for an item that was not returned after seven days.

Blockbuster’s billing complaints sky rocketed after this ad campaign. Billing was definitely not the cause of this issue; it was a classic case of Blockbuster not “listening to their bills.” They ignored the billing complaints. The unhappy customers responded to the hidden terms and the lack of response from Blockbuster by taking their business elsewhere, getting the media to report on Blockbuster’s deception and filing class action lawsuits. Had Blockbuster listened to the billing complaints and proactively responded to the complaints which were mostly about not disclosing the full terms of the new policy, they could have avoided a lot of bad press, expensive lawsuits and losing and creating angry consumers. In 2009, Blockbuster quietly reinstated late fees.

2. “JustAnother Tel”: The second case was told to me by a reliable source about ten years ago. I have always believed it to be true but have been unable to find any supporting documentation it may just be urban myth. Regardless of its historical accuracy, it is a great example of a company that listens to its bills and tenaciously investigates the root cause of the issues that it bears repeating regardless.

During the early 1990s a local telephone service provider—let’s call them “JustAnother Tel”—had found that their customer’s most frequent billing issue was requesting a credit due to a service outage. JustAnother Tel’s policy was to provide a credit to any customer if they suffered an outage and also requested a credit. The cost of the credits was increasing and JustAnother Tel wanted to control or ideally eliminate them, so they created a task force to investigate and solve this issue.

When the task force investigated the root cause of outage credits by identifying the most common causes, their research revealed something interesting. The most common cause for service outages was due to telephone line breaks, most telephone line breaks were caused by a telephone pole being damaged, most telephone pole damage was due to auto accidents, most auto accidents happened on curves in the road where the car goes off the road and hits a telephone pole, and JustAnother Tel’s operations manual requires telephone poles to be placed on the outside of curves in the road. By simply changing the manual so the poles would be placed on the inside of curves, they could significantly reduce service outages.

JustAnother Tel’s attention to “billing issues” and recognizing they had nothing to do with billing led them to fewer outages, improved operation efficiency, lower costs maintaining their network, increased customer satisfaction and less credits, thereby increasing revenue by providing a more reliable service.

3. “UniqueData Mobile”: The third case is “based on a true story” – it occurred during my tenure at a previous employer – but certain elements have been altered to protect confidentiality. Notwithstanding a few changed details, it is a great example of how a company prevented problems by anticipating what the bills would tell them.

A cellular phone service provider — let’s call them UniqueData Mobile — was preparing to launch a new service targeting heavy data users by offering unique content. The service was going to be revolutionary and the strategy was to make the pricing plans also break industry standards. The differentiator to be highlighted in the advertising and point of sale materials was to be “five free video clips per month included.” There was no question this would be a ground breaking service and that it would be well received by consumers. While this strategy met all the objectives of the sales, marketing and product teams, it had not been vetted by the billing team.

The problem was that billing, a key element in any service industry product, was unable to support this pricing strategy (five free video clips) because of the way the service had been designed. The data feed to the billing system provided only bytes of data consumed, without any information about what type of data such as video, audio, surfing the web, ring tones, etc. The limited information in the data feed meant counting the videos downloaded, identifying the free videos or charging for the additional videos could not be supported.

UniqueData Mobile realized if they went live with the planned strategy they would have had a lot of frustrated customers with “billing issues.” Customer complaints about not seeing the videos they got for free, what they were being charged, and an abundance of questions about downloaded megabytes.

UniqueData Mobile “listened to their future bills” and tried to change the data feed to the billing system, but in the end were unsuccessful and were forced to change their marketing and sales strategy. The company didn’t initially realize how integral billing is to the overall service provided to the customer and how it needs to be considered in the earliest phases of product design, but fortunately for them, they did recognize its importance prior to launching the service and avoided bad customer experiences by proactively changing their strategy.

In this economy, or any economy, finding a cost-effective way to improve your company is easy. Simply remember to listen to your bills…they are talking to you.