Millions of consumers and small businesses are struggling with soaring costs. Simultaneously, CSPs are being challenged with supporting their customer base, defending their brands, dealing with rising costs, and ensuring their cash flow can fund digital transformation and new network rollout. As Laura Broers explains, the bill has a vital role to play in this delicate balancing act.
So many customers are now struggling to pay their bills that the traditional approach to those in default is no longer adequate. In response to the crisis and a larger transformation in thinking, CSPs are trying to find more effective and customer-centric ways of dealing with overdue bills. This includes tackling the issues earlier, communicating more effectively, personalizing the approach, and utilizing digital channels. Bills are a key component of addressing these challenges.
Getting customers to pay an overdue bill – termed ‘dunning’ - is expensive, impersonal, and a major driver of voluntary and involuntary churn.
A key mindset shift is seeing CSPs move from the short-term goal of recovering overdue amounts, whatever the cost, to a longer-term focus on customer lifetime value, which is achieved by helping customers remain customers and stay connected.
Instead of insisting on payments for services that customers can’t afford or don’t need, CSPs are instead focusing on ensuring costs and services are aligned with customer needs – helping to uncover what value can sustainably be achieved for both customer and CSP.
Billing data plays an important role in helping them do this because it aids a better understanding of the customer, enables CSPs to spot changes in circumstances, and helps them to personalize their approach.
Better bill design not only helps improve customer communications but means events such as high usage or overage charges can be highlighted on bills and solutions suggested (such as more suitable tariffs). Useful cost-control features can also be provided (such as proactive alerting), along with options to spread payments etc.
Clearer bills with helpful options means there is less requirement for customers to call care, which lowers the cost of dunning. While moving to digital bills also enables more self-care which, research amongst debt charities suggests, is critical for engaging defaulting customers - many of whom are embarrassed or distressed at the prospect of having to speak to a human.
Even when it’s necessary to call care, clearer billing will shorten call handling time as customers will already know what their options are, and agents can see the same information as the customer.
The cost-of-living crisis is a trigger for digitalization and will drive demand for clearer, more personalized, and more proactive bills as customers scrutinize their bills more than ever before. But this is all part of a far bigger shift towards customer-centricity that has been going on for some time.
Treating customers as individual companies or people and trying to really understand how best to serve them places the emphasis on long-term value creation and customer lifetime value rather than on short-term debt collection.
All of this means that bills, as the most important commercial communication that customers receive, must adapt to the needs of each and every customer, in a way that’s cost-effective and sustainable for service providers.
In the next few years, CSPs are going to have to deal with both struggling customers and customers that scrutinize their bills far more than previously. If these customers seek more support by querying their bills or asking for help, it will drive up costs and put more stress on support staff.
CSPs, therefore, need to find better ways to communicate with their customers and deal with those experiencing payment difficulties.
This includes taking a more personalized and coherent approach to billing and dunning processes.
Clearer, more personalized and proactive bills combined with reliable and consolidated billing data can unlock a wide range of benefits for CSPs and transform how they deal with their customers –ensuring that all departments work together to deliver optimal outcomes for both customers and themselves.
Laura Broers is Calvi’s Marketing and Communications Specialist, joining Calvi after completing a degree in communications. With her passion for improving the billing experience, Laura is great at putting herself in the customers’ shoes to help CSPs think about how they can improve their billing communications.
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