Advantages to be gained in terms of higher customer retention
and increased profits from the adoption of electronic billing
(e-billing) and online bill payments have been yet again confirmed
by a study undertaken by financial technology vendor Fiserv.
Conducted for Fiserv by research firm Aspen Marketing Services, the
study evaluated data from 8 million residential customers of US
telecommunications company Quest Communications over an 18-month
period, with analysis concluded in April 2009.
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Based on its findings Aspen found that the analysis found the most
significant linkage between billing and business benefits were
among early tenure customers – those who had been customers for
less than 28 months.
Specifically, among early-tenure customers:
• E-bill users are 12.5 percent less likely to leave, are 35
percent more likely to pay their bills on time and purchase 20
percent more products than paper bill users;
• Automatic, recurring payment users are 14 percent less likely to
leave and 86 percent more likely to pay their bills on time;
and
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By GlobalData• Users who combine e-bill with recurring payment are more loyal
and more profitable than other customer segments.
From a cost perspective, the study validated the importance of
delivering e-bills not only via an organisation’s own website, but
also via financial institution sites. This, explained Fiserv, is
because where a bill is received impacts payment method.
For example, among Quest customers studied 74 percent who receive
an e-bill at a bank site pay using an electronic deduction from
their bank account, a low-cost form of payment. Of customers that
receive bills at the company site, 40 percent pay using a credit or
debit card-funded payment, a higher cost method of payment.
Based on Aspen’s findings, over 70 percent of customers that
receive a paper bill will pay with a paper cheque. According to
data quoted by Fiserv the cost of a paper bill presentment is $0.45
per bill compared with $0.15 per e-bill presentment via a bank’s or
organisation’s website.
