Trying out E-bills Gives Consumers the Confidence to go Paperless

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Trying out E-bills Gives Consumers the Confidence to go Paperless

By TMCnet Special Guest
Eric Leiserson, Senior Research Analyst at Fiserv
  |  April 25, 2012

This article originally appeared in the April issue of INTERNET TELEPHONY magazine.

Tryvertising is the promotion of goods offered risk-free, often through a free trial period, to give consumers a chance to try before they buy. It’s a successful tactic often used by large companies to help cautious consumers feel more comfortable with selecting a new product or service that they have yet to see or experience in person. It works for cookware, satellite radio subscriptions and other purchases. Tryvertising works not just for the sale of new products, it can also change the way people receive and pay bills.

The wave of Internet commerce has enabled companies to offer customers an alternative to paper bills. Millions of consumers are receiving electronic versions of their paper bills, known as e-bills, at service provider websites or through their online banking bill payment services. The reason they cite most often for electing electronic rather than paper bills is convenience, according to the Fiserv 2011 Billing Household Study. In addition, customers also indicate that they value e-mail reminders about bills, the enhanced ability to manage finances and the elimination of paper that e-bills provide.

E-billing also offers big benefits for companies that send monthly bills. Hard cost savings are generated from the elimination of paper, printing and mailing costs. In addition, biller cost savings are derived because customers who receive e-bills make fewer calls to contact centers, and when they do need to make contact, they frequently do so by using the less costly channel of online customer care. Research conducted with Con Edison in 2011 found that e-bill customers make more timely payments, which facilitates cash flow for billers. Additionally, a study with Qwest Communications in 2009 found that Qwest (News - Alert) customers receiving e-bills either at their bank sites or at site had higher levels of retention, profitability and product bundling then paper bill customers.

Although there are many consumer e-bill enthusiasts, some segments of customers are still reluctant to try paperless e-bills. In the past billers and banks have used direct mail, online and e-mail campaigns as well as local public relations campaigns to convert customers to e-billing. The green movement has been leveraged by some billers to convert customers to e-bills rather than paper. Some have used contests to encourage customers to sign up for e-bills. These traditional marketing programs have swayed many customers to convert to e-bills at both bank and biller websites. Yet some customers still refuse to move away from their paper bills, likely because they are comfortable paying their bills in a conventional way, or aren’t aware of e-bills. When the Fiserv Billing Household Study asked what would convince consumers that do not yet receive e-bills to sign up for e-bills, 19 percent said the ability to try e-bills before turning off the paper bills.

To provide billers with the ability to offer their customers e-bill trials, Fiserv created a tryvertising program called eBill Easy Activation. The program provides customers who are already paying bills through their bank online with the option to receive an e-bill there as well as a paper bill for a 90-day introductory period. At the end of trial period, customers have the opportunity to opt to continue with e-bills and cancel paper. If they do not activate the e-bill and turn off the paper bill, then the e-bill is discontinued.

In 2011, Fiserv conducted a pilot of eBill Easy Activation with a major U.S. telecommunications provider. The company has millions of customers who already pay their paper bills online through online banking. The telecommunications provider offered a no-commitment trial of e-bill to 400,000 customers that lasted through three billing cycles. At the end of the trial period, customers could opt to continue with e-bills or paper bills. The rate of trial period customers choosing e-bills was through the roof – three times higher than customers that were not involved in the pilot.

The telecommunications company very successfully changed the financial services behavior of many customers, 75 percent of which were first time e-bills users. Easy Activation also created an exciting draft effect because nearly 70 percent of the new e-bill customers added at least one more e-bill from another biller. Such impressive results show that tryvertising is a proven path to conversion and permanent adoption for e-bills.   

Edited by Jennifer Russell