From the lingering impact of the COVID-19 pandemic, through to the cost-of-living crisis and rising inflation, this concoction of economic pressures mean that many have had to find ways to cut down on their expenditure and remain financially stable.
Consumer activity has been notably impacted due to these factors, as seen through
decline in streaming subscriptions and more people turning to alternative payment methods such as buy now pay later. However, it is not just individuals that are feeling the effects, businesses are also under increased pressure to ensure they are being
efficient in their spending to alleviate the financial impact of the past few challenging years.
Whether selling to companies or consumers, changing or reducing spending habits will be disheartening and worrying to hear for many. While this concern is understandable, providers should also see it as a wake-up call to adapt and meet these new expectations
to avoid being left behind. Firms need to rethink the purchasing options they are offering customers and, fundamentally, rethink their business models to meet evolving demands.
Some proactive organisations that have realised the need for change are viewing the current circumstances as an opportunity to re-evaluate the payment options they are offering to customers to provide more choice for those looking to monitor their expenditure.
This is because providing a wider variety of payment options means they can - where possible - avoid losing customers for which previous billing options, such as fixed-fee subscriptions, may no longer be viable.
The number of different billing and payment options has grown in recent years, which some have quickly embraced. One of the most prominent of these new business models that companies are deploying is a usage-based pricing (UBP) model that allows end-users
to only pay for what they consume.
to an OpenView report from late 2021, a quarter of companies that currently use a UBP model say they introduced it within the previous 12 months, and 2021’s adoption of UBP exceeds that of both 2019 and 2020 combined.
It’s positive to see businesses actively putting in place alternative billing models to meet changing customer needs. However, while this move sounds straightforward, 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
of the problems energy customers contact Citizens Advice about are related to inaccurate billing. This example demonstrates that offering more payment choices alone is not enough and needs to be supported by technology and solutions that enable companies
to do this properly, so they don’t risk compromising on efficiency or customer experience.
Those looking to offer variable payment options and for technology to support this should ensure they implement automated solutions, such as data mediation (the ability to quickly and accurately process raw-usage data), into the billing process. Using platforms
which can quickly analyse a customer's usage and their payment options means firms can rest assured they are providing customers with accurate invoicing information at all times, removing the risk of human error and costly mistakes.
At the same time, firms should implement technologies which can adapt to customer demands. Prioritising billing solutions which have the added flexibility 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 needing to make dramatic changes as some have had to in current conditions.
It’s clear that companies which want to retain customers and attract new ones must offer greater choice in areas such as payment options. However, change is difficult and putting new processes in place can be both risky and daunting. As such, those that
want to provide more billing options need to ensure their offering to customers is backed up by technology which can manage these new processes and adapt to changing consumer needs. Through this, firms will be able to provide their customers with the variety
they crave, provide the same quality of service and help sustain through this turbulent economic period.