23 November 2014

Talk of Many Things

Ketharaman Swaminathan - GTM360 Marketing Solutions

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Whither Upselling With eBills?

18 April 2012  |  3081 views  |  0

For a long time, I've been hearing about how electronic bill presentment and payment (EBPP) solutions enable greater cross-selling and upselling by billers. For the uninitiated, EBPP, among other things, generates paperless versions of bills and statements and publishes them on portals or emails them as PDF attachments, or both; the term "billers" collectively refers to banks, credit card companies, mobile network operators, boroughs / councils, utilities and other types of businesses who need to send bills / statements to their customers periodically.

Around 7-8 years ago, I came across the following example that illustrated how an MNO could exploit an EBPP software's cross-selling / upselling capabilities:

By mining your billing data, our software could reveal that a high percentage of calls made by a certain customer are to one particular telephone number. Using this insight, our software would prompt you to offer your new “Partner FreeCall” product to this customer and thereby earn a higher fixed fee every month.

Sounded great then, sounds great now. However, it just doesn't seem to happen in practice. At least not to me or anyone in my family or friends in all our interactions with billers spread across many countries viz. India, Germany, UK and USA. And, recently, when I was definitely a candidate for one such offer, the biller in question never informed me about it.

I've wondered if this total absence of cross-selling and upselling in real life reflected a fundamental disconnect between what a vendor claims its software can do versus what the software actually does. A recent personal experience convinced me that it didn't, and suggested that there could be larger issues at play.

I recently got a bill of INR 1,000 (~ US$ 20) for my daughter's new smartphone connection. When I saw this figure, I got a 'bill shock' of sorts because, according to the plan we'd subscribed to, the monthly fixed fees was only INR 150 (US$ 3). The list of itemized charges revealed more than 600 SMS messages. At INR 1 per message, that itself translated to INR 600, so I ruled out any billing error. Since her GenY friends are equally addicted to texting as my daughter, I checked around and found out they'd subscribed to various SMS packs that let them send a huge number of free texts for a small additional monthly charge.

Armed with this information, I tweeted to my MNO - Vodafone, by the way - to inquire if it had such SMS packs. I soon received a reply that, yes, for an additional fee of INR 35, I could get 1,000 free SMSs. I immediately ordered this pack and, hopefully, the days of bill shock are behind me. (As an aside, my interaction with Vodafone in the above example started with Twitter, moved to telephone and ended with email. It looks like Vodafone has already jumped onto the omnichannel bandwagon, a subject about which I've written here, here and here. Hyperlinks to personal blog removed.)

This was a great example of cross-selling / upselling, except that the biller didn't trigger it. I wondered why. Surely, my MNO had EBPP. Since its CSR who called me in response to my Twitter update knew all about this SMS pack and could put through my purchase in seconds, the MNO's inaction can't be attributed to apathy, untrained personnel or immature processes.

A small back-of-the-envelope calculation makes me believe that my MNO's lack of proactiveness in upselling its SMS pack is deliberate and has nothing to do with technology. For marketers, cross-selling and upselling mean not only selling more products and services to existing customers but also growing revenues in the process. While the SMS pack in question meets the first condition, it falls miserably short on the second: It fetches INR 35 but results in a loss of INR 1,000 - the normal price for 1,000 texts @ INR 1.00 per text - in revenues every month (or at least until the month that subscribers wake up and take corrective action).

When addon products and services carry such a massive revenue downside, only billers who value customer satisfaction and advocacy way above a hit on their toplines will truly exploit the cross-selling and upselling capabilities of their eBilling and eStatementing solutions. For the others, there's TransPromos. More on that later.

Omnichannel Retailing In Action TagsPaymentsRetail banking

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Ketharaman Swaminathan

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