Hitting the mark

Hittingthemark

The last thing cost-conscious customers need right now is to receive incorrect bills. Businesses must adapt to better meet their evolving needs, says Nathan Shinn, Founder and Chief Strategy Officer at automated billing solutions provider, BillingPlatform

From the continuing fallout of the pandemic, through to Brexit and fears of a looming recession, mounting economic pressures are forcing many to reassess their spending priorities going forward.

We are already seeing consumer spending habits change because of these. Recently, it was revealed that more than one million music streaming subscriptions have been cancelled in the UK, with 37 per cent of customers citing saving money as the reason for cutting services, while an increasing number of people are turning to alternative payment methods, such as buy now, pay later, to purchase goods.

It is not just individual consumers who are feeling the strain, businesses are also under increased pressure to streamline spending to ease the financial impact of the past few, challenging years.

Whether selling to companies or consumers, providers will be nervous about these changing spending habits. However, while this concern is understandable, firms should also see it as a wake-up call to adapt and meet these new expectations. Providers need to rethink the purchasing options they are offering their customers, as well as their business models, to meet evolving demands, or risk being left behind.

Some organisations have realised the need to adapt and are viewing the changing market as an opportunity to evolve the payment options they are offering in order to provide more choice for those looking to monitor their expenditure. This is because offering a wider variety of payment options means they can avoid losing customers for which previous billing methods, such as fixed-fee subscriptions, may no longer be viable.

Fortunately for providers, the number of different billing and payment alternatives has grown in recent years. One of the most prominent among the new business models that companies are deploying is a usage-based pricing (UBP) one that allows end-users to only pay for what they consume. According to a report from global venture capital firm OpenView on the software-as-a-service market in 2021, a quarter of companies that used a UBP model had introduced it within the previous 12 months. 2021’s adoption of UBP exceeded that of both 2019 and 2020 combined.

It’s positive to see businesses actively implementing alternative billing methods to meet changing customer demands. However, while this may sound like a straightforward approach, putting the processes in place is a different, more complicated matter. When businesses are no longer generating the exact same bill for every customer, they need to be able to capture various inbound data on user consumption and/or their subscriptions, apply it against contracted rating agreements and create a unique, accurate bill quickly. For companies that have never used multiple billing options, this can be a challenge as they need to put in place new processes which, if not implemented correctly, can lead to inaccurate billing. This both impacts the customer’s time and, consequently, the reputation of the business.

The impact of not putting in the correct processes has been seen in the UK energy sector, where it was revealed that 40 per cent of the problems that energy customers contact Citizens Advice about are related to inaccurate billing. This example demonstrates that offering more payment choices alone is not enough and it needs to be supported by technology and solutions that enable companies to do this properly, so that they don’t risk compromising on efficiency or customer experience.

Those wanting to offer varied means of payment, and looking for technology to support this, should ensure they implement automated solutions, such as data mediation (the ability to process raw-usage data quickly and accurately), into the billing process. Using platforms that can analyse a customer’s usage and payment choices means firms can be confident that they are providing them with accurate invoicing information at all times, removing the risk of human error and costly mistakes.

At the same time, firms should implement technologies that can adapt to customer demands. Prioritising billing solutions that are flexible to react to market trends in real time, launch new offerings and expand into different geographies, means that businesses are future-proofed to meet the changing needs of customers and can avoid having to make the kinds of dramatic changes some have been forced to adopt in the current challenging conditions. Change isn’t easy and implementing new processes can be both risky and daunting. This means those that want to provide more billing options need to ensure their offering is backed up by technology that can manage these new processes and adapt to evolving customer needs. This will mean providers can give customers the flexibility they desire while maintaining a high quality of service, and helping them survive and even thrive during these tough times.