Targeted, Proactive Communication: The Key to Reducing Bill Confusion and Telecom Customer Churn

“Why is my cable bill $40 higher than last month’s?”

Unexpected charges—and the confusion they create—damage customer satisfaction, loyalty and your bottom line. Yet they happen all the time, with 49% of consumers having received unexpected or hidden fees in their cable, internet and wireless phone bills. More than half (54%) of customers who encountered an unexpected fee abandoned their purchase or didn’t sign up for service. It’s hard to think of a customer experience (CX) problem that’s at once so widespread—and so damaging—as bill confusion.

To retain customers, communication service providers (CSPs) need to strategically communicate their billing changes. A proactive approach to billing explanation will head off customers’ frustrations and strengthen their trust in your brand.

Failing to Explain Changes Is a Common Billing Statement “Sin”

CSG’s Bill Design Assessment, a comprehensive questionnaire, evaluates how well a billing statement meets customers’ needs and expectations. After analyzing print and digital bills from 30 different companies in communications services, utilities and other industries, we identified a significant opportunity for improvement across the board. In fact, even the highest-scoring bill failed 10 of the 23 criteria questions.

Among the top five billing statement sins we uncovered is failure to acknowledge or explain changes since the previous bill. Many customers who see any increase are quick to investigate it—often by calling the contact center.

The High Cost of Bill Confusion

Confusing bills damage customer experience, causing a host of problems related to:

Higher operational costs. Bill confusion leads to contact center calls. These interactions drive up costs with live agent time, credits, refunds and retention offers agents provide to at-risk customers.

Churn. One survey found that 46% of telecom customers canceled a phone, internet, TV or cable contract due to poor customer service experiences. Not surprisingly, there’s a strong correlation between service experience and surprise charges on a bill.

“Even if a telco’s prices are the lowest available, customers reeling from poor customer experience, faulty connectivity, or surprise charges on their bills are unlikely to respond well to any marketing campaign.” — McKinsey & Co.

Reputational damage. Some dissatisfied customers file complaints with the Better Business Bureau, leave negative online reviews, or tell their friends and family, dampening your brand’s reputation and jeopardizing future business. Almost all (94%) consumers say a bad review has convinced them to avoid a business.

Is Ignorance Bliss? Or Is Honesty the Best Policy?

With many Americans experiencing a cost-of-living crisis, hidden fees hit harder. That’s why they’re now seeking more reassurance around pricing from their providers. According to Ernst & Young, “this means—for example—providing clear explanations of pricing changes and giving their more proactive customers the capabilities and tools needed to find the information they’re seeking.”

For customers who are frustrated by hidden fees and unexpected bill increases, communicating proactively may be the best way to keep them from abandoning your brand. But giving customers a heads-up on a price increase can provoke some of them to cancel services or leave right away, when they might not have done so until discovering the increase later.

How can service providers walk the fine line to keep most customers happy and informed?

Different Messages for Different Customers

Intelligent targeting is the key to effective billing communication. CSPs must carefully target bill-related communications to specific subsets of customers who are likely to take negative actions (e.g., cancel services or churn).

The first step is to identify the customers who …

• Have experienced a significant increase in their bill amount
• Are price sensitive (i.e., previously canceled services when prices increased)
• Have a high propensity to churn (using business rules and churn predictions)

The next step is to determine what messages (if any) to send to each subset of customers.

Example: A Smooth Promo Roll-off Communication Strategy

When promotional offers expire, either the promotional services roll off the account (and customers must add them back at a new charge), or customers continue receiving the services with an increase in their bills. The challenge, then, is juggling two competing business priorities:

1. Increase the number of customers who retain services, increasing average revenue per user (ARPU)
2. Avoid alienating the customers who don’t remove the service and are upset about the increase in their bill

The batch blast approach is common—but risky. Sending all customers the same notification about the expiration prevents angry phone calls and loss of brand trust, but it may cause higher-paying customers, who might have kept the extra services, to cancel.

For customers who are likely to keep the services long term (even after a price increase), CSPs should avoid proactive communications regarding the promo roll-off. Instead, they should consider positive reactive treatments (e.g., offer additional free or discounted months) to build upon their customer lifetime value.

For customers who are the most price-sensitive and likely to cancel services or churn, proactive explanation of billing charges and changes is key for retaining them. What’s the best way to do that?

Eliminate Billing Surprises With a Digital Bill Explanation Tool

CSPs can use a digital bill presentment solution that explains charges and month-to-month changes to reduce bill confusion and churn for price-sensitive customers.

Choose an AI-powered bill explanation tool that:

• Proactively notifies targeted customers regarding month-to-month increases in subscription bills
• Explains the reasons for changes
• Answers questions about the bill
• Supports cross-/upsell efforts
• Allows customers to pay in the platform

Enhance Customer Loyalty With CSG Bill Explainer

CSG Bill Explainer is a cloud-based bill presentment solution that uses generative AI to proactively help customers understand and compare their monthly telecom bills. Bill Explainer visually and contextually highlights changes—and the reasons for them—in package fees, usage rates and taxes, using simple and concise language. The conversational bill assistant answers bill-related questions based on the customer’s current and previous bill, and it recommends products and services according to their usage and payment histories. Customers can pay their bill within the Bill Explainer platform, without logging in to the payment portal (and having to remember their password).