Online bill payment and presentment (OBPP) is gaining steam as a customer strategy. For companies, the benefits are clear -- reduced cycle time for bill generation, elimination of printing and mailing costs and immediate credit from the customer's bank account, cutting out a payment time delay. Leading organizations from such wide-ranging industries as travel and entertainment, telecom and financial services have aggressively embraced OBPP. And the financial rewards are great -- some firms are seeing savings in the millions annually. For customers, the primary benefits are convenience, timeliness and saving on checks and postage.
Some companies are influencing customers to change their bill-payment behavior by charging fees for the more laborious paper-billing process. Insurance providers, such as State Farm and USAA, charge customers as much as $8 per month to receive a paper invoice. American Express now charges its small business merchants up to $10 a month. MetroPCS and Primus are charging for paper bills, and several airlines charge extra for paper tickets to be issued in lieu of an e-ticket.
But not all customers want to eliminate their paper bills. And of those who might, many have questions with regard to security and privacy that need to be addressed. For instance, "If I pay a bill electronically, is my privacy protected? Will the company send promotional e-mail to my billing address? Will they share that address with others unless I take the initiative to opt out? If I receive my bill electronically, is there any firm out there that will promise to take me off its postal mail list and not send me any more envelopes?"
Also, the process of proactively going to a special Web site and having to remember account numbers and passwords sometimes can be more cumbersome than receiving a paper bill on your doorstep and mailing it back.
Providing differentiated service and pricing to higher-value customers is an important part of treating different customers differently and increasing customer lifetime value. But to keep those high-value customers loyal, companies employing the practice of online billing should think about the needs of their most valuable customers and understand their preferred channel of interaction.
It's a tough balance to manage the cost and process efficiency of online billing with meeting individual customer needs for interaction. Those companies that can successfully implement a strategy including both can turn this capability into a desired feature that valuable customers will embrace. For every customer that does, benefits realized will be immediate. But more importantly, for those customers who don't want the service, companies should take a closer look at how profitable and loyal they are and tailor services accordingly.
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