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Making the Bill More Than a Nuisance

1/30/2005 7:00 PM Eastern

The customer is always right. The customer is king. Customers come first. We listen to our customers. We stand behind our customers. We take care of our customers.”

Most business leaders would agree with these well-worn customer-relationship maxims. And an increasing percentage of executives actually live up to them by embracing proven consumer-relationship management (CRM) business methods and technologies.

Until recently, however, most if not all CRM implementations have failed to go the distance, whether as a technological implementation or an organizational discipline. They focus on the front end of the customer relationship — prospecting, customer acquisition, customer service and customer fulfillment — and after-the-sale service, such as technical support.

But they nearly always run out of gas on the back end, the last mile of the customer-relationship cycle, which is bland and boring billing. It’s the perennial afterthought on the CRM totem pole; the missing link in the CRM chain.

Done wrong — the norm, unfortunately — billing is merely a necessary evil that debits or credits customers’ credit cards or accounts, facilitates e-commerce functionality, spits out invoices, collects and applies payments and provides basic recordkeeping and reporting.

Done right, billing can deliver virtually all of the benefits companies are striving for with traditional, albeit frontloaded, CRM efforts. These include, but are not limited to, revenue enhancement, increased customer satisfaction and loyalty, brand promotion, improved customer communication, cross-selling and upselling.

EXPANDING CRM’S REACH

The strategy now known as CRM was first popularized by renowned marketing experts Don Peppers and Martha Rogers in their international best-seller The One to One Future. It’s since been embodied by any number of enterprise software applications and business-management processes, except billing.

Extending CRM thinking to the last mile of the customer relationship is what’s dubbed “BRM,” for “billing relationship management.” As with traditional CRM approaches, BRM’s benefits can improve the fundamental economics of any business by leveraging the billing system to manage customers individually.

This gives customers a truly personalized experience, which measurably and quantitatively results in stronger and more-profitable relationships. And when dealing with recurring relationships, such as subscription-based publications or services, BRM’s benefits can provide an even bigger kick towards an organization’s CRM goals.

At the broadest level, a BRM system generates an invoice and collects money. But BRM goes much further, deeply integrating the billing function with the pieces or components of the vendor’s service.

That opens real opportunities to upsell customers, boost revenue, increase customer satisfaction, promote brands and strengthen customer loyalty.

For example, an Internet-service provider might be selling broadband Internet access, but also have a menu of other services they could up-sell broadband buyers in the future, such as additional e-mail addresses, Web hosting, firewall, spam filtering, antivirus, anti-spyware, voice-over-Internet protocol and wireless service.

All of these extra-cost services complement the core broadband offering. A normal billing system would simply generate the monthly invoices. With BRM, an ISP can analyze a new customer’s existing services, and promote new, personalized service offerings with every invoice.

A broadband customer might be offered a discount deal on a firewall in 30 days, a security pitch for an antivirus filter in 60 days and an anti-spy ware package in 90 days. At six months, perhaps a deal on a Web hosting package is offered.

At nine months, the ISP could offer a free trial of its VoIP service for low-cost long distance. And as the customer’s account comes up for renewal, the BRM system can proactively market, say, a discount on an extended term contract, to boost renewals.

GETTING BILLING INTO THE GAME

Online gaming is another arena that offers examples of how BRM can boost revenue opportunities by integrating with all dimensions of a service, instead of limiting billing to a month-end invoice.

For example, instead of canceling a role-playing account due to non-use or nonpayment — completely wasting a subscriber’s hard-fought winnings in the process — a BRM system can keep the account alive by locking the player’s “avatar” (character) in a room, and requiring payment to unlock the door and rejoin the online universe.

The BRM system can also monitor a player’s progress in real time, up-selling them tips, secrets, power-ups, weapons, tools, more time, or other game elements, all as part of the game universe’s continuity.

BRM can also reduce churn by monitoring credit-card limits and expiration dates. Gamers can be alerted to upcoming credit card problems, and get redirected to the billing platform’s self-service interface to make the appropriate changes—all without losing their place in the game.

Churn can also be prevented by allowing gamers to put accounts on 'hold’ when they can’t logon due to vacation, illness, a tight budget, and so on, retaining them as customers.

Even the loyalty of parents can be engendered by a gaming platform with integrated BRM, by letting parents set and enforce hourly, daily, monthly, or other billing limits for their children.

The up-sell, churn reduction, and loyalty-building possibilities for creative marketers are endless when the billing system is smart enough to understand the customer’s profile and activities, and dynamically market new services or resolve potential issues.

BILLING GONE WILD

Indeed, BRM can have a dramatic impact on industries as diverse as financial services, public utilities, government services, telecommunications, online gaming, ISPs, content providers, publishing — any business that has a recurring billing relationship with its customers.

Regardless of the industry sector or level of integration, BRM systems also provide increased payment flexibility for customers. For instance, services can be billed by a flat rate, a one-time charge, a usage basis (say, by hour or by bandwidth consumed), or as a recurring charge (daily, weekly, monthly, quarterly, annually).

And using the BRM system’s self-service Web interface, customers can change their billing cycle, update contact or mailing information, and so on.

This allows the accounts-payable department to receive one invoice that details all of the corporate users, locations or both. This is exceptionally helpful to organizations that want to track purchases by multiple offices and employees.

All of these flexible options increase customer loyalty by boosting the vendor’s service levels via the BRM system. That simply makes it easier for customers to purchase, budget, pay for and analyze their use of services.

Perhaps most important, a BRM solution must handle the billing basics without fail. Problems common to homegrown and canned billing systems — such as unauthorized free trials, missed invoices, incorrect debits and credits, garbled data or privacy leaks — erode revenue, anger customers and, as such, are simply unacceptable.

With BRM, the customer comes first by extending CRM to the last step in the customer relationship.

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