The Great Communicator

Invoices Generate New Dollars

“Service providers are under pressure from two directions: the need to reduce cost in the face of declining revenues and margins from traditional services [and] the need to build profitable relationships with their customers to grow their business,” explains Neil Philpott, marketing director at Amdocs, a leading billing and CRM vendor.

Billing is one way service providers can make their relationships with existing customers even more profitable. Monthly invoices enjoy a special ability to cut through the crowded advertising waters, since 99.9 percent of customers open their bills, according to Ron Whaley, vice president of sales and marketing at OSG Billing Services. “It’s the 100 percent guaranteed touch point for your customers once a month,” he says. “Try to make sure you maximize it.”

One way of maximizing the opportunity is by creating strategies so service provider messages aren’t lost in the sea of advertising bombarding customers on a daily basis. Customization is one way to do that.

“Telecommunications companies are at a crossroads regarding customer communications,” says Davis Marksbury, president and CEO of Exstream Software, which markets software to telcos that personalizes bills and other communications. “They must attract new and retain existing customers through such ever-increasing contact points as e-mail, the Web and more. At the same time, they must also provide more individualized information.” One example of such individualized information is delivering customized offers based on customers’ existing service portfolios.

COMTEC Inc.’s bill-printing system can analyze such customer situations and can automatically trigger upsell messages to be printed on the bills of customers that fit a certain profile. For example, if a customer has caller ID but not call-waiting that individual may be a prime candidate for the latter service.

“We take a proprietary database and can use anyone’s OSS data, whether that’s RiverRock, Info Directions, etc.,” explains Jim Nash, vice president of sales and marketing at COMTEC, which has a national contract with Time Warner Cable to place advertising on statements.“We work with business managers to set up business rules, so we can handle the process. They do nothing after that. Telcos can then use our platform to cross-sell and upsell services and features based on what they send us in the file.”

COMTEC also provides an image viewing tool, in trials now, so customer service representatives (CSRs) see a specific crosssell or upsell message when someone calls in with a certain service profile.

“The CSR thus becomes a sales rep,” says Nash. “A dynamic message pops up on the screen. If they click ‘accept,’ it goes to the service organization at the telco.”

Personix Inc., which counts RBOC Verizon Communications Inc. as a customer, also offers automated bill messaging based on “if-then” business logic. It gives clients a password-protected Web interface to enter the copy, graphics and the business rules that drive the messaging, all without programmer intervention. Users can then request a test file and have a PDF sent to them to proof the resulting invoice.

But the billing opportunity goes well beyond simply upselling existing customers on a service provider’s products. Service providers can also strike affinity deals with other companies outside the industry and market those partners’ goods through communications bills.

For example, a service provider could approach a Pizza Hut and offer to place a coupon on the bills of those customers located within a 10-mile radius of its restaurant. In this scenario, Pizza Hut would pay the carrier a fee for this targeted promotion of its products.

In addition to driving new revenue, using monthly bills rather than other advertising mediums for marketing can also help service providers with cost reduction.

In this case, a service provider could offer to provide an affinity partner’s coupon or promotion in its bill if that partner paid for the postage on the bill, says Todd Stine, corporate vice president of sales and marketing at Personix. “Or, if you’re offering different services from other companies, you can include the charge on the bill itself and get a monthly [bonus] on it.”

Telcos are working with their phonebook divisions and are offering dynamic coupons on the bill to underwrite the cost of the bill, adds Nash. “Take the ads in a phonebook. You may have a quarter-page or a half-page ad. Carriers can also offer insertions on bills as a special offer.”

The more traditional approach to this is the placement of inserts and “opportunity mails” from other companies within the envelope. This is less effective than spraying the message on the bill. “I think we all are familiar with opening a bill over the trash can and throwing out everything but the statement,” says Nash.

Brenda Morgan, marketing manager for UDP, which can customize bills for customers to include advertising, says the cost of marketing through bills is minimal considering what advertising costs in magazines.

The cost to acquire a new customer for a new service can run into the hundreds of dollars, considering the cost of ads, running the call center, accounting and so on, adds OSG’s Whaley. “To maintain and cross-sell an existing customer is only $50 to $60 because you already have a captured audience,” he says.

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