Everybody Wins

Converting Customers to EBPP - Part I

Editor’s Note: This, the first of two articles, addresses migrating consumers to electronic billing and presentment. Turn to PHONE+ in October to read more about converting commercial clients to EBPP.

“You’d be amazed what people

will do for a T-shirt,” says Jerry Kadavy, senior manager for Pioneer Telephone Cooperative Inc. in Oklahoma.

He’s not talking about anything huge in the grand scheme of things, but about electronic bill payment and presentment (EBPP).

EBPP, of course, is a time-saver and a money saver for the service provider and the end customer. Larger carriers have learned this, and smaller carriers also finding success, even if they have to entice customers with free T-shirts. Other carriers also encourage their customers to sign up for e-billing by offering a small discount or a rebate on their bills.

Some of the incentives must be working, as EBPP is steadily growing by 17 percent to 18 percent yearly, says Daniel Longfield, industry analyst for OSS/telecom for Frost & Sullivan. “For communications carriers,” Longfield says, “it’s a perfect market for EBPP because of the size of the bills. Of course a really great candidate for e-billing is an ISP because 100 percent of their customers already have Internet access. And because of the fact they are communications carriers, these providers do have to move to EBPP to show they are technologically savvy and relevant.”

Smaller operators, especially, can benefit from implementing EBPP, for several reasons, Longfield says. One, such a system would save a service provider a lot of money simply by eliminating the cost associated with paper bills: printing, postage and the paper itself. Longfield adds many of these smaller operators still are weathering the downturn and basically living month-to-month. EBPP would eliminate checks lost in the mail. In addition, he says, customers using EBPP are more likely to pay on time, usually because the bill amount is deducted automatically from a credit card or bank account.


Pioneer Telephone Cooperative was one of the first smaller operators to implement EBPP way back in the summer of 2000. Pioneer serves about 53,000 telephone customers and 20,000 Internet customers, along with about 25,000 long-distance customers. However, the operator did hit a few snags in its foray into the world of EBPP. “We try not to be on the bleeding edge of things, but just behind it,” Kadavy says. “We were on the bleeding edge of e-billing, and we paid the price for it.”

Pioneer used Derivion for its system. “It was not all we expected, and we had some problems,” says Kadavy. By the fall of 2001, Pioneer no longer offered EBPP. “We sent an e-mail to our customers explaining that we didn’t feel our service in EBPP was up to par.”

So Pioneer took matters into its own hands and developed its own system, Kadavy says. “We had developed our billing system in Visual FoxPro and Sybase and then we added what we call Pay Online in PHP (hypertext preprocessor) and directly integrated it into our billing system,” he says. “They are two separate systems, but they share the same data.”

Currently about 2,800 of Pioneer’s customers pay online, and 850 of those also receive a paper bill. Kadavy says Pioneer works carefully to lead its customer into the world of EBPP, so it gives them the option of still receiving a paper bill.

Pioneer’s spokesman says the company has overcome the growing pains of such a system and has created something dependable. “Our system is basically as scalable as we want,” Kadavy says. “The only problem has been a lack of disk space, so we upgraded our storage. I don’t see any other scalability problems, as I assume we’re not going to grow exponentially,” he says.

Overall, he adds, EBPP saves not only money, time and reduces error. “Paper and humans always have issues. Of course, you have some novice Web users who will double-click on a button, and we have the expense of processing payments online. But we don’t have to worry about not sufficient funds, so they drawbacks are pretty well offset,” Kadavy says.

Likewise, All West Communications, Kamas, Utah, has been pleased with its implementation of EBPP. Like Pioneer, All West essentially set up its own system, which it started offering to customers in early 2003.

“We bought third-party billing software out of the box,” says Sean Gubler, programmer and analyst for All West. “What we had to do was integrate, and we did the e-billing system ourselves in-house. We maintain a separate database, which we keep in-house to hold other data such as login information and other payment information. The credit card interface is separate.”

Click to view

Although All West hasn’t marketed its EBPP option aggressively, Gubler says, it does offer a $1 credit per month for customers that eschew paper billing. All West estimates that 5 percent to 10 percent of its customers are using EBPP.

“It’s been steadily growing,” Gubler says. And more people likely will sign up as All West is seeing a good percentage of customers using its Web site simply to view their bills. “Our system allows customers to view a bill online as far back as our archives go, and the online bill looks exactly like the paper bill, so that’s easy for customers.”

Steve Hogan, CEO of CustomCall Data Systems, which provides a Web-based EBPP system for carrier customers, thinks that business offerings will drive residential customers to embrace EBPP. “Residential customers are beginning to demand real-time information like they get at work,” Hogan says. “So that gives them a comfort level, which can lead to them accepting EBPP more readily.”


For operators without the resources to develop an in-house solution, vendors are more than happy to step up and many vendors call EBPP as a growing market. Vendors are moving toward self-service, giving the operator ultimate control over the EBPP system.

“We offer flexibility on how the customer wants billing and customer care,” says Steve Rodin, executive director for CSG Systems, which provides billing and CRM software. “Also, our solution is totally integrated, so customers don’t have to worry about interoperability with existing billing platforms.”

“CustomCall Data Systems also focuses on making the presentation as user-friendly as possible,” Hogan says. “One of the interesting questions we get is, “Should it match the paper bill? Yeah, it should, but then we find that customers want to go beyond that and add even more neat new things. Some clients have asked for a push-button on the e-bill page that will print a paper bill. In our experience, very few people push the button, but the carriers still think it’s attractive.”

CSG also is working to make sure carrier customers can change the look and add promotions themselves. “Our solution allows them to do this without having to worry about breaking the technical solution,” Rodin says.

Longfield says EBPP will continue to pick up traction, especially after both service providers and customers find it is proven. “The last thing you want is to push all your customers to EBPP and find out it doesn’t work. No installation is perfect, so carriers want to get it right.”

Once a solution is ready, Longfield says convincing customers should be pretty easy, considering all the incentives that are possible, and that doesn’t include just T-shirts. “Carriers offer outrageously low prices for bundling, so why not say, ‘You get this price if you agree to online bill pay.'”

J.D. Power and Associates released a study in late July that found visits to local telco Web sites went up 6 percent over the previous six months - the largest percentage increase in the past four years. Notably, billing is the focus of most of these customer visits, with 56 percent of Web site users reporting they have reviewed a bill, and 44 percent having paid their bill online - up 13 percent from 2003.

“Online billing is a trend that the industry has been looking for,”
says Steve Kirkeby, senior director of telecommunication research at J.D. Power and Associates, in a press statement. “Customers can review their service whenever they want from wherever they are and much more cost effectively for the carrier. While billing self-service has improved dramatically, the next industry plateau will be to provide a broader-based, high-quality customer service assistance via the Web or e-mail. Customer service, by far, is the most important component of overall satisfaction in this industry, and improving e-service represents a major opportunity.”

There is some good news in the report on the customer service front, however. Customers with Internet access who visited their local provider’s Web site in the past six months have significantly higher overall satisfaction scores than those who have not.


All West Communications
CSG Systems
Custom Call Data Systems
Frost & Sullivan
J.D. Power and Associates
Pioneer Telephone Cooperative Inc.

Leave a comment

Your email address will not be published. Required fields are marked *

The ID is: 70215