Thursday, February 25, 2010

Who ‘drives’ the ROI on your eBilling solution?

Over the past several months I’ve seen an incredibly positive shift in thinking, with far more companies not only looking at new technologies to help reduce operating costs, but also at how their IT departments can build these solutions in-house. This makes sense, with every job being scrutinized and IT wanting to demonstrate their value (and secure their jobs for the foreseeable future).

eBilling is again on the agenda as a potential cost saving, however it is NOT a solution you should be looking to BUILD without very careful consideration.

We see it time and again. There are two key components owned by two separate departments that every company with a “build mentality” underestimates. Implementing the right technology first time around (IT’s job) and having a customer adoption strategy to give you the quickest ROI and maximum savings thereafter (marketing / customer care’s job).

Let’s consider the following analogy for your eBilling solution. Imagine you could change to a more efficient fuel for your car that will reduce your cost at the pump by 60 - 90% and cut the cost of services and maintenance. Sounds amazing, right? What’s the catch? Well, there are two actually.

Challenge # 1:
This new fuel requires a new engine. How do you get this new engine into your car?
a. Do you ask your very good, but very busy local mechanic to build this new engine – either from scratch or from off-the-shelf components?
b. Or do you get the manufacturer to install the perfect engine for your car?

Challenge # 2:
To date, only a small number of filling stations have adopted this new type of fuel.
You will have to convince each filling station owner, one-by-one that this new fuel is better for the environment and that because it’s quicker to fill the tank for your new engine, it’ll make their lives much easier. Oh, and it’ll save them about the cost of a postage stamp each month to fill up your car.

Now let’s go back to your eBilling application.

Migrating your paper communications to electronic will save you 60 - 90% on print and mail costs, along with many other soft cost benefits, but how do you get customers to give up paper?

Selecting an eBilling solution that works best for your business and your customers is KEY.

Making sure it’s implemented quickly and professionally is just as important. With a solution that is fundamentally changing the way you communicate with your customers, are you happy to let your local mechanic (your IT team) build your eBilling solution by trial and error? In most cases, for the safety of your passengers and the longevity of your car, you’re going to put your trust in the experts. The same concept should apply for your eBilling solution.

Now on to challenge number 2 – Strategy:

Understanding how to get filling stations (your customers) to adopt this new concept is essential. How do you convince them to go green? Do you offer incentives? What’s the most cost effective way to drive enrollments? What is your goal for the next 3 years – 10%, 20%, 60% of gas stations (paperless customers)? These are all questions that require considerable experience, planning and strategy. And it’s likely that your strategy will need to adapt several times over the next 3 years. In today’s market, companies have neither the budget nor the time to experiment with customer adoption tactics.

IT projects tend to focus on the development and not the roll-out. More often than not, developing and implementing a customer adoption strategy isn’t part of the project. In addition, your customer service and marketing teams won’t know how to design their customer communication strategies until they’ve seen the technology in action and are comfortable that it works as promised.

So, before you decide that your business requirements are unique, that you have a complex or legacy system, or that your corporate culture is to build everything, don’t underestimate the intimate relationship between technology, strategy and experience when making a decision on whether to build or outsource your eBilling solution to the experts.

As Mark Lutchen, Head of the IT Effectiveness practice at PricewaterhouseCoopers puts it, the rule of thumb is to buy applications to the maximum extent possible to cut costs - freeing up resources for whatever really needs to be built in-house.

Monday, February 15, 2010

Is December 2012 Doomsday for B2C Marketing?

December 21, 2012 is the end-date of a 5,125-year-long cycle in the Mayan Long Count calendar and some believe that cataclysmic or transformative events will occur on this date. Forrester believes that by 2012, consolidators' share of the online bill payment market will surpass direct billing by merchants for the first time. In other words, your brand, your marketing opportunities, your customers’ eyeballs will be owned by someone else. Sounds like a doomsday scenario to me. Let's explore further.

A Bill Consolidator, in the EBPP world, is an online Service Provider that consolidates bills from other Billers and presents them in a single portal to the customer. In plain English, bill consolidators receive billing data from numerous billers, aggregate and sort it by consumers enrolled in EBPP programs, then send it to distribution points based upon where individual consumers are enrolled. These distribution sites are commonly banks, but can also be Internet portal sites such as AOL, Quicken.com, and Yahoo! Finance. Examples of consolidators are Yodlee in the US and OneVu in the UK.

While the offering at first glance appears attractive to consumers who want to be able to pay multiple bills from a single location, there are a number of limitations for the biller:
  • Only summary level data is visible in the billing portal;

  • There are generally no interactive capabilities with the bills and all additional bill content (statement stuffers, regulatory notices, etc. ) are lost;

  • The biller loses control over all aspects of the billing/payment process;

  • Personalized marketing and branding opportunities are forever doomed.
There is an alternative to the doomsday situation - where the only regular touch point you have with your customer is relegated to someone else - It's called Consumer Consolidation, and the vast majority of your customers already do this in their email inbox.

Consider the average internet user: typically the first application to be opened every day and the last to be closed at night is the email client. Incoming emails are usually dealt with soon after they are received, as opposed to paper correspondence, which often lies on the kitchen table until the end of the week, or longer. Emails are filtered and sorted either according to sender or types of email, making them easy to retrieve. Imagine if the email inbox could be used as the central repository for bills and payment. For the consumer, this is the height of convenience:
  • Bills are received electronically, in one place, with personalized filing and sorting;

  • Bills can be paid without having to log into countless portals with their necessarily long and complicated access credentials.

For the biller, the benefits of being able to communicate directly to their customers instead of relying on the consumer to log into either their own portal, or worse someone else's, represents a paradigm shift in electronic billing. Most importantly, it avoids the B2C Marketing Day of Judgment predicted by Forrester.

Michael Haupt
Managing Director, Striata Europe
www.striata.com