The billing problems driving customers away
Poor billing practices are driving away customers. In the UK, research has found the problem is so widespread that as many as 77% of customers have experienced some form of billing issue, with two-thirds stating they would consider, or definitely switch provider, when one arises.
Clearly, poor billing practices aren’t an issue businesses can just sweep under the carpet. Billing is extremely important and often the only touchpoint between companies and their customers. When used effectively, there is no reason why it can’t build positive, fulfilling and engaged relationships.
So, faced with the prospect of losing customers due to poor billing, it seems there’s no better time than the present for businesses to review their current processes. But where is it that businesses are going wrong? And, what can be done to tackle this?
Common billing blunders
Billing isn’t always straightforward, mistakes can and do sometimes occur. However, when the mistakes made are avoidable and happening too often, or when issues are not resolved effectively, billing can become a sore spot for customers. Most of us will be familiar with receiving an inaccurate bill – perhaps an erroneous charge or an incorrect meter reading. When this becomes difficult to rectify, and involves multiple calls to providers, the relationship between the customer and company can sour and prove detrimental to loyalty, advocacy and trust.
Then there’s those instances of customers not being put on the cheapest or most appropriate tariff for them – an issue affecting 15% of customers – which immediately raises questions over a business’ trustworthiness. In fact, it was reported last year that around eight million households on fixed direct debits for their energy bills were thought to be owed money. By putting commercial gain ahead of what’s best for each customer, a company may suffer a loss of loyalty from its customer base – bad news in an increasingly competitive marketplace.
Finally, there is often a lack of proactive, clear and transparent communication from service providers when it comes to billing. It’s hardly a secret that good communication is key in building customer trust and loyalty, yet this is often overlooked. In failing to keep the lines of communication open with customers before, during and post-billing, companies only serve to alienate customers and add to already-heightened frustrations and tension.
So, what are the repercussions of getting it wrong?
Now we know where companies are going wrong when it comes to billing, it seems pertinent to then discuss the consequences of doing so.
Research has found that in instances of inaccurate or incorrect billing, almost half (45%) of UK customers would consider switching to a competitor. Sounds bad, doesn’t it? Well, it gets worse – one in seven of British customers would switch immediately, without hesitation. Clearly, this carries a significant cost to companies if they wish to acquire new customers to replace the ones they’ve lost.
Poor billing can also have severe consequences when it comes to customer arrears. Last year, we conducted some research into the debt practices of organisations and found that over a third of late payments made by customers were as a result of billing issues such as inaccuracy, bill shock, or complicated bills that a customer didn’t understand. Instances of customers in arrears, not due to affordability, are clearly avoidable therefore it can be argued that billing blunders are playing a part in the issue of growing customer debt.
And, regulators are becoming increasingly harsh on those companies delivering subpar services to customers. As recently as last month, telecoms company Vodafone was fined £4.6 million for a catalogue of misgivings by regulator Ofcom, which included poor billing practices.
What companies can do to improve their practices
It isn’t all doom and gloom – there are things businesses can do to turn it around, ensure they are rolling out best practice when it comes to billing, and in turn improve their relationships with customers.
Keep lines of communication open
Online support can be effective in supporting customers through billing issues, but it’s also important that a business has empathetic, helpful staff in place who are knowledgeable and willing to listen to customers. Advisors should be on hand to assist customers in deciphering any bills that are complex in nature and to help alleviate the likelihood of protest debt – that is, the refusal to pay due to poor service.
Equally, ensuring customers are contacted before a payment is due, whether that’s via email or SMS alerts, means they are made aware of when and what they have to pay. This can be a cost effective and effective way of alleviating the risk of bill shock or said customer ending up in arrears, as well as helping to build trust. It enables the resolution of any potential issues before they arise.
In addition, businesses should consider simplifying their bills – making them clearer and easier to understand while being careful to avoid jargon. This is something our latest report – ‘The Secrets of Better Billing’ – uncovered, with over a third of customers we surveyed stating that clarity of bills was what they want businesses most to improve upon.
A question of choice
Better billing also means giving customers more choice and options when it comes to the format in which they receive their bill. It is important that companies do not assume all customers are digitally-literate or want their bills to be accessible solely online. Whilst there are immediate cost benefits to driving correspondence online, there are many customers who still want to receive paper copies of their bills in the post. Companies risk frustrating one in four customers by charging for, or removing, the option of paper bills.
Ultimately, billing is a crucial part of any customer journey and how a business handles billing issues is as important as getting the process of billing itself right. If businesses take heed of the above, and work to improve their approach, it will help drive loyalty and repair those relationships which may have been damaged in the past due to poor practice. While Britain may have a billing problem as it stands, there is time to turn it around for those companies willing to make a change and put customers’ needs first.