Billing and customer care are hailed by industry analysts, vendors and service providers as keys to success in a highly competitive wireless market. The recent focus in this area has been on making better software, training personnel, integrating systems and ultimately how these components figure into the customer service process. But what about the processing, printing and mailing of bills? How much does this matter?
Sixty percent of incoming customer calls to service providers are generated by the bill or statement they receive, said Tom Roberts, vice president of marketing for International Billing Services, a subsidiary of USCS International.
El Dorado Hills, Calif.-based IBS has been in business almost three decades, but only recently started marketing its billing presentment services, which include processing billing data from its clients, bill design, laser printing of bills, bill assembly, mailing and remittance processing. Its clients fall across a wide range of industries, but IBS views communications-in particular wireless services-as one its greatest opportunities for new business.
Today 1.7 billion bills and statements are sent to Americans in any given 30-day period, said IBS. The industry average cost per bill to process the data, buy paper, print, assemble and mail the bill and process the bill’s remittance, is 50 cents. This makes for a $10.2 billion industry, said IBS.
The company claims a 25 percent market share for bill presentment within the communications industry, said Roberts. Market share exceeds 50 percent in the cable-TV industry, reaches almost 40 percent in the cellular market and more than 10 percent of the wireline telecom market. Most of its competitors are in-house departments of large companies.
One of IBS’ client propositions is its ability to improve float, the turnaround time on a bill. IBS found that a certain proportion of bill payers generally pay early. So if a company can mail bills to those people a little earlier in the billing cycle, the company can realize a quicker payment turnaround. It’s a one-time hit, said Roberts, but for big companies it translates into thousands or millions of dollars in immediate cash flow.
Billing presentment is labor and capital intensive, said Roberts. Also, the technology in this area moves quickly. As such, it makes sense for many companies to outsource these services and focus on their own core competencies, added Roberts. The greatest hurdle to win a new client is the investment that company already has made in its own bill processing services, namely people and equipment.
IBS’ clients include other billing companies, carriers and third-party vendors. The company’s carrier clients include Ameritech Cellular and Paging, AirTouch Paging, Metrocall Inc., Powertel Inc., Frontier Cellular, AT&T Corp. and a number of smaller carriers. IBS has an umbrella agreement with AT&T to provide statement presentment services and also licensed AT&T to use its technology and software to help control production of billing statements.
Cincinnati Bell Information Systems, one of the wireless industry’s leading providers of billing and customer care services, has used IBS’ services for seven years and last month renewed the IBS contract for an additional five years. Statement processing on behalf of CBIS accounted for $26 million, or 10 percent of USCS International’s $263 million 1996 revenues, said IBS.
On IBS’ horizon is electronic billing. The concept is not new, but the logistics have required a great amount of work. Roberts said the company believes for electronic billing to truly be electronic, secure and easy to use, customers need a central repository for their bills. This would serve as a virtual mailbox, where computer users could retrieve bills and statements for all the services and accounts they use-which averages 17 per household.
Benefits of electronic billing for the billers include lower delivery and remittance costs, the opportunity to provide more attractive bills and marketing collateral and a faster turnaround which can improve float.
IBS anticipates a sizable market for electronic billing since 40 percent of U.S. households use personal computers, 15 percent are Internet-enabled and between 10 and 15 percent use account balancing software programs already.
IBS is looking to form partnerships to make electronic billing work, said Roberts.
