One of the things that has come as a surprise to us over the last few years is that the communications providers (CPs) that have prospered through the recession are not those obsessed with pricing. In fact, those CPs most willing to cut their margins in an attempt to offer the cheapest calls are the ones that have generally found themselves in trouble. It’s a sad fact of life that if you sell on price alone, someone will always be cheaper eventually.
Selling on price alone is not a sustainable business model. The customers attracted by the cheapest price point are the ones with the least loyalty, chopping and changing whenever they can see a fraction of a penny saving on a minute. The base churn involved in this model is disruptive and costly.
In contrast, those CPs that have done very well are the ones who take the trouble to maintain their billing tariffs by following good housekeeping routines and making the most of their telecoms billing platform’s functionality. It is revenue assurance, not margin cutting which has been the path to success through these difficult times.
Best practice in telecoms revenue assurance means checking constantly that everything is correctly billed at the right tariffs so that revenue is not lost and customers are not overcharged leading to disputes and base churn. If you think that the benefits of revenue assurance are not worth the effort, then note that the big telco carriers have teams of people working on revenue assurance, double-checking everything that is billed. They do this because it pays off.
When implementing our aBILLity billing platform for new customers it’s amazing to see the number of CPs who do not bother to check their margins prior to every bill run. Some CPs do not regularly check their actual buy prices are in accordance with the tariff agreed with the carrier. Assuming the carrier always gets it right can be a costly mistake. If your end-customer rate tables are wrongly set or not regularly maintained, your customers could be being overcharged or undercharged which is bad practice either way. It often appears that someone set the system up for them in the past and they just let it run!
Common sense says they you should conduct appropriate margin checks as a matter of routine before and after each billing run. Only by doing this can you have peace of mind that your customers are being correctly billed so as to maximise margins and ensure that you’re not losing money. We have seen some absolute howlers, where customers have been charged an expensive 09 premium rate for calls to mobiles, either because they hadn’t taken the time to work out proper tariffs, or in some cases, because they hadn’t invested in training that would have educated them on where they were going wrong! Of course, when the customer eventually finds out they are very upset.
There really is no excuse because most telecoms billing platforms should provide the tools to drill down to where margins can be increased and where potential losses could arise. In the case of our aBILLity platform, there are a number of telecoms revenue assurance tools available as standard within the package. CPs can also create innovative packages and price plans and there are numerous features and billing techniques to increase margin and add to the bottom line, without necessarily increasing published tariffs. ‘What If’ functionality allows variables on the customer’s billing profile to be changed to maximise either a cost-saving or profit. For buy-in rates, Carrier Watch functionality will allow the CP to check buying rates against an agreed tariff and automatically flag up specific over-charged calls, so a credit claim can be e-mailed back to the carrier.
Telecoms revenue assurance is not a big ordeal because full management reporting is generally available. For example with aBILLity ‘Sales Check’, full onscreen reporting is available for the CPs’ to slice and dice their revenues and margin any which way they desire. If you have never audited your margins or simply don’t have time, we offer a revenue assurance consultancy service where an expert billing manager will spend a day scrutinising your system looking for any margin increasing or lost revenue opportunities. For those CPs daunted by the task of getting their billing system back to optimum levels, we also offer a three-day Spring Clean programme of database cleaning with training so that the billing platform is in tip-top condition and the correct staff skill levels are there to maintain it.
Authored by Peppa Campbell, Field Services Manager at Union Street