It’s the end of the line for “first bill shock”

29th October 2019

For many customers, their only interaction with their service provider is the monthly bill. It is critical to get this interaction right because it defines the customer experience and drives a positive relationship. Service providers place considerable focus on the role of the bill as a valuable touch point; it serves as an opportunity to build and nurture a positive customer relationship, and a marketing tool for cross-selling and up-selling relevant products and services.

Yet, the first bill almost always creates an uneasy start to a new relationship, a negative perception of the service provider and often results in a call to customer support to query its content.

A common scenario
The situation arises because customers do not expect or understand proration. Having received their first bill for a new service, an alarmed customer notices that they are being charged a higher amount than they signed for and often this results in a call to the service provider to query the bill. The high call volumes generated by first bill shock often leads to stretched customer service teams and reduces the resources available to efficiently handle customer queries; for B2C providers first bill queries can account for as much as 70% of inbound calls to their contact centre and that figure is marginally less for SMEs. It is not a great start to the customer journey.

Reducing the burden
First bill shock is a pain point that has plagued the Channel for so long that it has earned its place as an unavoidable reality of the industry. Service providers no longer question its existence, instead focusing their efforts on investing significant capital and resources in the development of initiatives to reduce its burden.

Large telecoms providers have attempted to devise cost-efficient processes that explain to customers the reasons their first bill is higher than they had expected. Tried solutions include sending supplementary information alongside the first bill, YouTube video explanations and the use of IVR (interactive voice response) to divert these queries to automated responses and to alleviate the pressure on customer service teams.

A quick search for the term ‘first bill’ highlights the scale of this problem and the effort service providers go to, to alleviate its impact:

While these initiatives have marginally impacted the level of customer service resources required to handle the queries generated, the underlying issue persists and the cumulative effect on the customer experience continues to be negative. As a result, a sour first interaction replaces what should be the beginning of a happy, long-term relationship with a new customer.

Eliminating the problem
At Strategic Imperatives, we actively invite our customers to contribute to our road map and invest time and money in understanding their business, challenges and opportunities. By taking the time to look beneath the surface, we can question issues that our customers have grown to accept as the norm and identify solutions to streamline and improve their business.

As we have done with many parts of the billing process, our approach to tackling the challenge of first bill shock has been a combination of commitment to innovation, fresh thinking and passion for making a difference.

Customers may not understand prorating but Elevate certainly does. Elevate offers service providers the capability to generate an instant one-off partial bill as soon as a customer (or service) is live for the interim period between service activation and the first bill run date – the customer never receives a bill that covers more than one period. For a customer signing up midway through a billing cycle, first bill shock is transformed into a positive first interaction with the service provider as they are billed instantly for the period in between their service going live and the start of their bill cycle.

This approach not only eliminates the first bill shock and its negative impact on the customer experience and the service provider support infrastructure, but also helps to reduce exposure to bad debit by detecting any payment issues at the earliest opportunity. Unique to Elevate, this functionality addresses a pain point the Channel has long accepted as unavoidable.

Our award-winning SaaS monetisation solution, Elevate, empowers service providers to reduce their incoming call volume and the number of unhappy customers arising from first bill shock. One small step for billing platforms, one giant leap for customer service!

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