In the UK, billing blunders have become so commonplace that over three-quarters of consumers have been affected by one, according to our report, ‘The Secrets of Better Billing’. This could be a costly mistake for businesses, with almost two-thirds of consumers saying they would consider, or definitely, switch provider if a billing problem presented itself.
This issue cannot be ignored – billing is an extremely important aspect of the customer journey and is key in establishing positive relationships between company and customer. It’s up to businesses to determine whether their current practices are up to scratch or if there’s room for improvement.
So, what are businesses currently getting wrong?
It’s inevitable, as with any process, that billing mistakes can and do happen. Most of us will have encountered a billing error in our lives – whether it’s due to an inaccurate meter reading or being charged more than we should have been by accident. But it’s when such mistakes could easily be avoided, are happening too often, or become difficult to resolve, that a strain begins to take its toll on relationships with customers.
There are also occasions when customers are not automatically put on the most appropriate or cost-effective tariffs. This is a major irritation for customers when it comes to billing practices and an issue that affects up to 15% of customers. It undermines trust and can lead to weakened customer loyalty – the last thing a business needs in the current economic climate.
Finally, there is a growing prevalence of a lack of clear and proactive communication from companies when it comes to billing. When a business fails to keep its lines of communication open throughout the billing process, it jeopardises customer trust and loyalty and only serves to both alienate and frustrate consumers.
And the impact of getting it wrong?
Getting billing wrong can be expensive for businesses. With industry regulators clamping down on poor practices, those companies failing to treat customers fairly may find themselves on the receiving end of a sizeable fine. In the past few weeks, regulator Ofcom handed Vodafone a £4.6 million fine for a number of issues – including problems with its billing practices.
And, that’s of course just one side of the coin. Poor billing can also lead to the loss of custom – with 45% of UK consumers considering switching to a competitor when a billing problem arises, whilst one in seven would switch without hesitation.
Billing issues can also lead to more customers ending up in arrears. We launched an investigation last year into debt collection practices in a range of industries and uncovered that over a third of late payments were a direct result of billing issues – including over-complex bills and inaccurate bills. Where a customer ends up in arrears due to a reason other than affordability, a business needs to look inward at its own processes and practices in order to mitigate avoidable customer debt
How businesses can better their billing practices:
While getting it wrong can have serious consequences, there are measures businesses can take to help better their billing practices and improve their customer relationships.
Alerts before payment date
With bill shock one of the leading causes of late payments, it’s important that businesses proactively contact customers before a payment is due to ensure they’re aware of the date and amount due. It also allows for any potential issue to be dealt with from the get-go.
Avoiding jargon when it comes to billing is crucial. Our report found that for a third of UK consumers, clearer bills were where businesses need to improve the most – something that definitely should be taken into consideration.
Communication is key
When it comes to billing, businesses must ensure they have robust online resources and knowledgeable, empathetic staff who are willing to listen and on-hand to provide support when a customer has bill queries. Not only does this help build rapport between a company and its customers, it also lessens the likelihood of protest debt – that is, the refusal to pay.
Always give customers options
It’s also important that customers have options when it comes to how their bill is received. Even as our world becomes more digitalised, businesses must remember that not everyone can or wants to receive bills electronically. Companies that remove the option or charge for paper bills run the risk of alienating a quarter of customers.
As the marketplace becomes increasingly competitive, and customers become more confident and aware of their spending power, less people will tolerate poor billing practices. However, if a business can identify and recognise where they need to improve, and do so in a timely manner, it will go some way in tackling the growing billing problem and improving customer loyalty and trust.
By Chris Cullen, head of sales and marketing, Echo Managed Services