This article originally appeared in the July/August issue of Mailing Systems Technology.
I vividly remember attending a conference in 1999 where presenters addressed electronic bill presentment and payment (EBPP) in nearly every session. You couldn’t have a conversation with anyone at the event where the subject didn’t come up. I guess the memory stuck with me because by the time I left, I thought the end of paper bills was imminent. So did many of my fellow conference attendees.
Eighteen years later, after relentless customer prodding and revolutionary advancements in technology, most billers have successfully convinced only 20-30% percent of their customers to abandon print. The expected widespread digital migration never happened. Electronic bills apparently failed to provide enough compelling benefit for customers to change their behavior. Yet most organizations I know are still running assertive paperless bill campaigns.
Time for a Change of Focus
Since the number one goal for many companies today seems to be focused on improving customer experiences (CX), perhaps it is time to shift emphasis away from paperless conversions and concentrate on making those paper documents, still preferred by three out of four customers, deliver more value.
Part of my argument for this change of focus is financial. The last couple of US clients for whom I analyzed transactional document costs were spending around .50 to mail each bill. Gradually decreasing the number of paper bill customers each year won’t save much money so long as billers must maintain their current bill-production infrastructure to service most of their customers. Looking ahead, customers who have resisted paperless bills so far won’t be easily converted. Greater incentives and more expensive marketing campaigns may be necessary. Some customers may resist progressively aggressive attempts to change their minds about paper bills and take their business elsewhere.
If we view customer-facing documents as tools to facilitate positive customer relationships instead of a source of undesirable expenses, an effort to improve those paper documents makes sense. A strategy that helps retain customers through more helpful or relevant statement messaging, for instance, pays off more quickly than the savings realized by persuading customers to accept electronic document delivery.
It seems simple. Here’s an example using one of my own bills:
I pay about $1200.00 a year for cell phone service and receive a monthly paper bill. Every bill includes a plea to switch to electronic invoices. If I visit the phone company’s website, I am presented with annoying pop-up messages, also attempting to convert me to paperless bills.
I like paper bills because they get my attention. They fit perfectly into a well-established personal workflow for making sure I pay my bills on time. Past bills stored in my file cabinet require no electronic devices, internet access, or passwords to retrieve.
What if the phone company improved their monthly paper bills by adding valuable personalized information? Some ideas might include detailed spending or data use trends, tips about relevant phone features I’m not using, or notices about security updates I neglected to download. What if the company noticed I called numbers in Canada frequently over the last few months and suggested switching to an international calling plan?
Attention like that from my phone company would make me think twice about switching to another. Signing with a new phone company would mean starting over. The new company would have to collect months of data before they knew enough about me to provide similar personalized service.
Individual attention from a company that knows their customers and uses that information intelligently could create a competitive advantage that helps a phone company earn customer loyalty. If they made improvements in the paper bills, I would see them. The same effort invested in their customer portal or electronic bills would likely go unnoticed.
Why should the phone company worry about saving $6.00 per year on bill production? Retaining my business a few more years by investing in communications I actually appreciate is much more lucrative.
Double-Dipping
Most customers who receive paper bills can also access electronic versions, but the two presentations are usually independent. Billers have made little progress integrating the two versions of transactional documents. Perhaps this goes back to the EBPP origins. In 1999, a prime concern of billers offering electronic statements was duplicating the paper documents exactly. This was a big deal back then. Corporate customer service departments were still using CRT terminals (green screens). They had already experienced the difficulty of relating a printed document to its electronic counterpart, so companies devoted a lot of attention to technologies that could mimic the printed pages.
Document parity is no longer as important. With mobile devices serving as primary internet access points for many customers, delivering an exact replica, such as a PDF, of a printed bill is actually counterproductive. They are difficult to read on smaller screens. Billers now apply responsive design techniques so documents function effectively regardless of the device used to view them.
Seamless customer experience is the goal of many organizations. Transactions or correspondence begun in one communication channel should continue uninterrupted in another. Paper bills can play a part in this strategy by treating the electronic version of a bill as an extension of the paper instead of a replacement.
To continue the phone company example, their paper bill messages could prompt customers to access their electronic bills and view video tutorials on how to change to the recommended phone plans or download and install the security updates mentioned in the paper bill.
Small investments a biller makes to add personalized useful content to their paper and electronic bills can pay off as cost savings and CX improvements. Better transactional documents can lower expenses like reducing customer service call volumes and provide that seamless experience that contributes to greater customer satisfaction.
High Open Rates
It’s no secret that paper bills enjoy a high open rate. Around 90% of consumers receiving paper bills open the envelopes and view the content. This makes paper bills a highly effective way to communicate with customers.
The same cannot be said for electronic bills. Email notices don’t get the same level of attention. Customers open fewer of them, and clicking through to view the actual bills happens even less often. It’s easy to understand why.
To see their bill online, customers must spot the billing email in their crowded inboxes, click on a link, and enter their username and password, if they can remember them. If they’ve forgotten their login credentials, are using a new device, chosen a different browser, or cleared cookies from their computers customers may have to endure a two-step authentication process before they can continue. Facing too many access barriers, customers may elect to bypass viewing the bill entirely. Some customers may never see promotional, educational, or informative messaging the company may include in the electronic bill.
Customers who sign up to have bills paid automatically from their bank accounts or credit cards have even less incentive to view the bills. How will a company improve the customer experience when they have essentially cut off their most consistent and effective channel of communication?
I wrote about the danger of replacing a high open rate communication some time ago (see Paperless Billing Can Cost You from August of 2013).
I’ll continue to help my clients cut expenses. I understand communicating with customers through only electronic channels is attractive to them. There are definitely some benefits, both financial and functional, that digital messaging provides. But I also make sure my clients understand the downside of aggressive paperless strategies. I urge my clients to monitor customer consumption of those electronic messages in a pilot program. If eliminating paper has a negative effect on areas such as customer retention, upselling, and referrals then perhaps the savings in paper and postage aren’t really worth further intense efforts to eliminate paper documents.
Leveraging the influence of an established communication channel seems smarter and easier than convincing reluctant customers to switch to digital delivery. Making paper documents more effective, efficient, and useful for customers can have a positive effect on customer relationships that outweigh net savings gained from increasing the number of paperless customers by a few percentage points.
Mike Porter writes extensively on topics of interest to companies and individuals working in the customer communications business. Visit www.printmailconsultants.com to learn more about his writing and consulting services or follow him on Twitter @PMCmike or LinkedIn.
