Banks, mobile phone providers, fixed line telephone suppliers, and airlines have all made efforts to encourage e-billing. Now it is the turn of the utilities, as British Gas encourages its customers to sign up to paperless billing. The service may provide advantages in targeted email marketing, but easy communication via email may lead to increased volumes of customer queries.
British Gas has signed up 150,000 customers to e-billing.
British Gas has been promoting its paperless billing service to customers across the UK. Incentives include a GBP5 discount for each bill (electricity, gas and telecoms) handled online.
Thus far, fewer than 1% of British Gas’s 17 million customers have signed up as a result of its advertising campaign. It believes that over a million will be taking advantage of this option by 2005. To take a comparable example, Barclays Bank, with over 16 million customers, is now approaching its 5th anniversary for the online service, and has 4.2 million registered customers. Awareness and uptake has been driven through its extensive branch and ATM network. However, British Gas lacks a face-to-face outlet and must rely upon marketing on its bills and through high profile advertising campaigns.
There are clear benefits to be made from getting customers online for billing. British Gas passes on at least some of the cost benefit of e-billing to its customers. British Gas, like Barclays, is likely to experience an improvement in customer retention as a result of this option. For a multi-utility, the condition of supplying an e-mail address may also open the door to cheaper and more targeted marketing.
The example of paperless billing in other industries suggests possible returns in bill delivery, improvements in customer retention, and even developments in targeted marketing. However, the attractiveness of email for querying and the ease of requesting actual reads or to query the bill amount while online could lead to paperless billing customers costing more rather than less to serve.
Any approach to introduce e-billing must therefore be taken in the wider context. Pure comparisons of e-billing processing and delivery against traditional billing and delivery may conceal the real story. Customers will welcome the flexibility of dealing with their utility over a variety of channels, but the cost saving miracle of the Internet may yet turn into a mirage.