No need to be (bill) shocked

BLOGGER: JEFF BARAK

With all the public concern over bill shock and the FCC’s meeting today to propose rules requiring mobile phone companies to alert customers when they are have reached monthly usage limits, what many people are forgetting is that it’s actually in the service providers’ interest to avoid bill shock.

Given the intense competition in the mobile field, service providers are focused on securing their customers’ long-term loyalty, rather than seeking to make a quick buck. Indeed, service providers know that a confident consumer is more likely to embrace new services, generating much-needed extra income at a time when growth from traditional voice services is flat.

That’s why we’re already seeing service providers offering tools to help their customers manage their usage—and their bills – better. Several service providers have introduced data usage estimator tools on their websites. And others have put in place ‘bill estimator’ tools that illustrate the impact of new activations and price-plan changes on the bill (in particular to explain the pro-ration calculations).

Not only does this help reduce customer churn, it also saves on costly calls to the call center. A customer who only belatedly discovers he was charged for something he thought came with his package is more likely to call and eventually churn than a customer who feels he is in control of his bill. By proactively informing a customer of both their usage patterns and ways to shape their package in a more cost-efficient manner, service providers are building customer loyalty.

On top of this, by making usage and billing information more available to customers through the Web and smartphones, service providers are trailblazing a path for additional personalization and self care, which again enhances value and deflects costly care interactions.

For example, in Europe the regulator has told service providers to roll out text messaging services to inform consumers when they are running up roaming charges or getting close to a set limit for data roaming. Interestingly, aside from preventing bill shock, these alerts also provide an opportunity for upsell, offering service providers the chance to promote relevant special discounts or personalized packages to these consumers.

Ending bill shock is simply good business for the service provider.

2 Comments

  1. Jonathan Goldberg
    Posted October 18, 2010 at 10:13 am | Permalink

    I encountered this personally not long ago when abroad with my mobile device. I was unaware that the data plan, unlimited for all practical purposes at home, was severely limited abroad. I was browsing to my heart’s content when I suddenly received an SMS from my provider warning me that I was about to go over the limit and telling me that ad-hoc browsing would be very expensive.

    Definitely improved my customer satisfaction.

  2. Naomi Weiser
    Posted October 20, 2010 at 9:24 am | Permalink

    Interesting article, Jeff, which was also referenced by Connected Planet: http://bit.ly/9LodEi
    The fact that “it’s actually in the service providers’ interest to avoid bill shock” is a good point to remember in the general furor. Whoever said “there’s no such thing as bad publicity” definitely wasn’t a service provider with a customer publically talking about their bill shock…

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