Billing in the e-age

Electronic bill presentment and payment may be a provider's answer to the question, `How can I give my customers the attention they demand?'

If there is one constant in the communications service provider industry, it's that the customers who don't get the services and care they expect will jump ship.

Internet-savvy customers expect immediate, round-the-clock care with instant access to their account information. Customers implementing new IP services also expect their service providers to be expert users of this technology and to use it to manage service deployment and support. These higher customer expectations require service providers to deploy solutions that support the delivery of these new capabilities.

Electronic bill presentment and payment (EBPP) offers a solution for integrated communications providers, ISPs, cable companies and wireless service providers looking to cut costs while delivering 24-hour care and meeting customer demand for instant account access (Figure 1). Service providers can use EBPP systems to deliver bills electronically, saving on paper billing costs. Customers can use them to pay bills electronically, access their account information and schedule automatic payments.

By deploying an EBPP system, service providers also take the first step toward delivering e-care, which is the next generation of customer care that combines customer-centric features and real-time care. It offers the components of today's EBPP applications, as well as problem initiation and resolution; adding and updating account information; online support for searchable product catalogs; and ordering and checking status of products and services.

What's in it for me?

There is no question that traditional paper-based billing and customer call center models are expensive. Forrester Research estimates that each customer call that a call center handles costs about $25. Paper-based billing costs as much as $2 per residential customer per month and can be as high as hundreds of dollars per month for corporate customers.

In contrast, some industry watchers estimate that producing and processing electronic bills costs 40cents, which means that service providers must deploy an effective EBPP solution to stay competitive. Otherwise, they will spend capital on paper-based billing while their competitors focus resources on product delivery and customer retention strategies.

Killen & Associates, a California-based e-business research and consulting firm, predicts that service providers deploying EBPP applications can expect to save up to $8 billion in 2001.

EBPP enables service providers to deliver a more personalized message to their customers. A service provider can alter the look of the online bill and include targeted messages or advertising based on the electronic bill's content (such as geographic location, services purchased, total charges). Targeted messages personalize customer interaction and give service providers an additional revenue opportunity.

And customers want control over their account information. EBPP systems also allow customers to organize how they receive, store and pay bills, including automatic payment scheduling; extract billing data and load it into Excel or Quicken to study usage patterns and track costs; and validate payment with an electronic audit trail.

Choose wisely

There are two different EBPP models: biller direct and consolidator (Figure 2).

The biller direct model places electronic billing capabilities on a service provider's Web site and lets customers access billing information and pay bills directly from the site. This model strengthens service providers' relationships with customers and allows them to control customers information. While this approach can serve business customers, it eventually could face challenges in the consumer market because it forces customers to access multiple sites to pay their bills.

The consolidator model uses a central portal site that collects customer billing information from multiple billers and provides customers with a single site for viewing and paying bills. This model has two subsets: thick and thin consolidation.

In the thick consolidator model, service providers give summary and detailed customer billing information to the consolidator. Therefore, the consolidator is responsible for managing the site. However, service providers give up control over an important, recurring customer interaction and surrender valuable detailed customer information. This model also will face challenges to market acceptance, based on limited acceptance of definitive standards for posting billing details.

In contrast, service providers that use the thin consolidator model provide consolidators with only a customer's summary billing information. The customer must visit the service provider's Web site to view detailed bill information.

The thin model safeguards detailed customer data, but customers may experience inconsistent customer care because the consolidator's Web site may look different from the service provider's site. This model, which has seen preliminary adoption of standards for posting information, stands the best chance for widespread EBPP market acceptance.

Whether service providers choose the biller direct or the consolidator model, they should look for a few EBPP system elements that will help them build their customer base and reduce churn:

- Composition/content reformatting. Enables providers to generate personalized electronicbills that contain targeted marketing information

- Management and tracking. Allows service providers to track log-on time, bill retrieval history and other information for targeted marketing

- Data extraction and storage. Allows providers to extract data from billing records and store it for bill presentment

- Customer service representative (CSR) information integration. Provides CSRs with the most updated version of the electronic bill and the customer's most recent retrieval activity in case a customer calls with an inquiry

- Consolidator integration. Enables providers to deliver billing information to consolidators using defined standards.

An EBPP system with these features can enable service providers to become more competitive. Those service providers that can let customers take more control over their relationship with their telco or ISP will enjoy the most market success. An effective e-care strategy includes:

- Self ordering, which allows customers to order new products through the service provider's Web site

- Self provisioning, which allows service providers to automatically link a customer's order through the Web site to the backend systems that will complete the provisioning for the order

- Self care, which enables customers to perform on-demand customer care via the service provider's Web site for such actions as reviewing new product information and changing account details

- Guided selling, which allows service providers to use their Web sites to guide customers toward purchasing the products that best suit their needs

- Personalization, which enables service providers to deliver personalized marketing messages during a customer's transaction on the site.

The word is convergence

To deliver this level of e-care, service providers will need a convergent customer care and billing system with an architecture that can support e-care functions.

The architecture must have extensible application programming interfaces or enterprise application integration connectors that enable tight integration between the customer care solution and billing engine and a service provider's customer relationship management system. The architecture also must integrate customer-centric workflow capabilities with billing applications to facilitate a single view of a service provider's customers, products and network.

An effective e-care architecture must have real-time capabilities that will better handle Web-based applications. It also must operate on a rules-based engine that allows service providers to rapidly implement new marketing strategies based on information gleaned from customer interactions on the site.

To compete effectively in the broadband age, service providers must answer customers' mounting expectations by deploying effective EBPP strategies. In doing so, service providers are setting the stage for launching e-care solutions that reduce costs, empower customers and make service providers more competitive.