Flexible payment is the way forward for telecom
How can you, as a telecom operator maintain a good level of profitability when customers are more price sensitive and your company must simultaneously cope with rising electricity costs? It’s high time to strengthen ties with your existing customer base. An attractive offer and flexible payment alternatives enable your customers to choose between summary invoices for their overall purchases, direct payment with each individual purchase, or a combination of the two.
The old truth still holds, namely, that it’s more cost effective to retain existing customers than chase after new ones, particularly in tough economic times. You would therefore be wise to invest in your ancillary services and a truly outstanding overall experience. Doing so will help ensure that your current customers will keep choosing you, over and over again.
Cost control and everyday luxury in the wake of recession
Transparency is the key to offering your customers better control over their costs. It is common for purchases of more inexpensive daily luxuries to increase during a recession, as people abstain from more expensive items. In the telecom industry, it could mean that customers go ahead and upgrade their mobile phone or indulge in additional streaming services, despite having a tighter budget. Doing so is simply more affordable than, for example, the vacation that they’ve put on hold.
Expanding your offer to boost upselling can thus be a profitable strategy. With a mix of fixed and one-time costs, how can you simplify payment and make it more transparent for your customers? Below, we go through some of the pros and cons with different alternatives. As with everything, there is no shoe that fits all. The best way forward is to offer your customers as much freedom and flexibility as possible, even when it comes to payment.
Everything on one invoice
Some customers dislike getting many invoices from the same company, even if each one pertains to a specific, unique service (such as broadband, mobile telephony or streaming). But gathering all purchases on one invoice can be easier said than done. Many of the larger telecom companies have delegated their various services to different parts of the organization. Without the right payment partner, it can be very difficult linking up the various payment flows to each specific customer because of them having a different customer number for each of those flows.
On top of that, gathering everything on one invoice is not necessarily the best option in all cases. In our article on how a wider telecom offering impacts the customer experience, we explain why customers might react negatively to what they perceive as a high total amount, which is particularly true in a recession, when people are more price sensitive.
It can be very advantageous to have a flexible billing solution where you can tailor both the frequency of invoicing and which items to gather on each invoice. It enables you to adapt to each individual customer’s preferences and needs. And, with proactive communication and the ability to communicate with your customer service function directly on the invoice, you can prevent or quickly act on any issues or concerns already at an early stage.
Direct payment of one-time costs when ordered
Enabling your customers to immediately pay for one-time purchases, such as extra surf or a movie they have streamed, helps them differentiate between fixed subscription costs and extras. One seamless way of doing that if for them to pay by debit or credit card. But for the service provider, there is a fee attached each time their customers pay by card. And, with a large customer base, those costs can quickly accumulate to substantial amounts each year.
You would thus be wise to explore other options that don’t have such fees attached. For example, you can allow your customer to register their account details in order to approve withdrawals, much the same as direct debit.
Don’t ignore one of your most effective channels for upselling
But before we get into that, let’s rewind a bit first. Because, before you can start collecting payment for extra purchases, you need to communicate what those items are first, and the value of them. Which communication channels are you currently using for that? And, how effective are they? Far too few telecom companies are taking advantage of the full potential of one their most effective ways to communicate with their customers: invoices.
Did you know that you can use invoices as your primary channel for upselling and cross-selling, even as your telecom company expands its offering? Read more about it in our article on how the payment platform improves the customer experience. Contact us!