Using the Internet for Customer Care & Billing

The Internet is fashionable, certainly on Wall Street and increasingly in middle income homes as well. Witness phrases such as “bringing it together with the power of the Internet” used by Nortel Networks, a 103 year-old telecom equipment vendor in their TV commercial aimed at creating brand name awareness among consumers, or “empowering the Internet generation” used by arch-rival Cisco in their mass circulation advertising campaigns. The “I” word is being used to sell to consumers, yet the question remains whether residential customers feel comfortable enough with the Internet to believe it is the best place to get customer care or to receive and pay their bills.

For service providers, using the Internet for online customer care and electronic billing presentment and payment (EBP&P) encompasses a number of interrelated requirements, including customers’ ability to:

• receive and pay bills on the Internet,
  
• sign up for and change their services using the Internet,
  
• find answers to their questions online about their accounts, such as checking payments, balances, and invoices, and
  
• learn about and purchase products from a catalog online.

Even though the transactional elements that make up EBP&P are readily understood, the telecommunications industry has not typically used the term “EBP&P” rigorously. We found instances of EBP&P being used to mean electronic bill presentment with no payment, and of checkless payments (such as pre-authorized debits of a customer’s bank account) being considered as EBP&P even through no bill is presented. In other cases the term “electronic bill payment” is used to describe presentment and payment. Throughout this report, INSIGHT defines EBP&P as requiring the presentment of the bill to the customer by the vendor electronically and the payment electronically of the bill by the customer.

Moving customer care and billing to the Internet raises a number of questions and presents new opportunities to the telecom industry.

• Is online billing and customer care a differentiator for telecommunications providers?
  
• Can e-bills be used to improve retention by attracting users to a provider’s Web site on a regular basis and thereby expose customers to new products, services, and plans?
  
• Does the Internet provide an environment where the most commonly asked general questions about the bill can be highlighted or linked directly to the customer’s bill?
  

This report will address these questions, looking at how companies both within and without the telecom industry are using the Internet for billing and customer care. Included will be a summary of consumer responses to customer care on the Internet, based on Insight’s primary market research of over 1,000 consumer households.


Getting Service Online

We asked respondents who were currently connected to the Internet at home how would they prefer to resolve billing and customer service problems with their telecom provider. They chose among:

• exclusively using the Internet,
• resolving problems over the telephone, or
• using either the Internet or the telephone.

Almost an equal number chose conventional telephone support and a choice of telephone or Internet support. Even though all the respondents for this question were connected to the Internet at home, only five percent chose to resolve problems exclusively on the Internet.

Clearly, based on Insight’s study, Internet users are not yet ready to rely on customer support online exclusively.


The Bill Online

American households receive an average of 12.5 bills per month. While there are approximately 28,000 billers, 350 of those billers account for 65 percent of all bills. The Wall Street Journal estimated in January 1999 that only between 9 and 14 percent of the 15 billion consumer bills paid each year are handled electronically. While many such payment transactions are processed through direct debits from banks for mortgages and insurance payments, and thus fall outside our definition of EBP&P, it does give some indication of the impact that ubiquitous EBP&P will have on the American household.

In an earlier study , Insight noted that the telephone service providers are concerned that customers will not pay their phone bills unless they receive a monthly paper bill. They have addressed this concern in the methods of payment they are accepting for paying online bills. Customers are sent e-mail when their statements are posted online to remind them to go look at them. Payment is by direct debit of the customer’s bank account or by credit card for almost all the telcos studied. BellSouth, beside allowing payments through CheckFree and TransPoint, also offers the option of paying using the customer’s bank’s online system. Southwestern Bell allows payment by CheckFree’s e-bill, and U S West includes electronic funds transfer as one of the payment methods. Bell Atlantic customers can view their statements online, but payment is by check or direct debit of the customer’s bank account.

EBP&P remains only a minor component of most carrier’s offers to consumers. Though all of the carriers’ Web sites had lists of frequently asked questions (FAQs), we found that a number of FAQs made no mention of the online billing service as a way of paying phone bills. In fact, some Web sites made it quite difficult to find out about the online billing service.

Only a few of the Web sites made it possible to order products and services online. Customers can learn about products and services but must order them by phone.

Key Points

Insight Research makes the following key points in this report:

• Electronic bill presentment and payment is in its infancy in the telecom industry and in most other industries. As a result, guidelines are just being put into place.
  
• The banking industry is one industry that has entered the online environment with consumers earlier than most industries; and therefore, many lessons can be learned from that industry for telecom providers, including security, FAQs, prompt e-mail response, online bill history, and mistakes to avoid.
  
• Consumers will eventually adopt EBP&P and customer care online as many industries begin providing consumer bills online, and critical mass is reached. Customers still want to have the choice of receiving customer care from a live person. Even after they start using the new technology, consumers want to be able to receive hard copies of their bills as a backup.
  
• Telcos’ EBP&P and online customer care need to improve upon the sometimes difficult to read and understand telecom paper bills and slow problem resolution time in order to be a winner in the marketplace. Telecom competitors must not only do the Web, but do the Web well.

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