BT quietly stops discount for paperless billing, backfire

So you want to start with e-billing? Well that’s easy. Legal issues and the availability of service providers no longer form a problem. And changing the behaviour of your customers is just as easy. Just give them a penalty for receiving paper bills. Who cares about the pesky customers anyway?

Or take a customer centric approach and give the customers who want to receive electronic bills a discount. Why? Well because you save big time with e-billing and you need your customers to sign up to generate these savings. So you give them a kick-back on your e-billing savings.

BT and its e-billing strategy

British Telecom (BT) started e-billing a while ago. Part of its adoption program was that BT customers who at the start of the adoption program agreed to receive their bills via e-billing (i.e. paperless) received a £1.25 discount that they have customarily got for the more convenient way of receiving their bill as a kick-back on the savings for BT.

But then BT makes a turn for the worse:

• BT raised it prices for the second time this year
• as from September 2010, the discount has been removed for all new customers
• BT also decided that as from December 2011 the customers who have been with BT longer than 14 months and had opted for paperless billing are to lose their monthly £1.25 discount
• The discount removal was not communicated to the company’s customers with the original price rise communications and is now only being revealed to them in e-mail communications

This is what a BT spokesman said:

BT electronic billing backfire: customers want paper bills again

From a savings perspective the change is understandable: BT saves about £36 million with this turnaround. The responses of BT customers however understandable too. Customers are already deciding to change their package to go back to paper billing, writing on moneysavingexpert:

• “Making BT send bills again is a petty response to the removal of the paper free discount but I smiled to myself as I hung up the phone.”
• “[This] does seem an odd decision by BT as it will probably cost more than my discount to print and post a paper bill to me.”

The savings perspective wins

The writer of Hermes Project however got it right:

“[most] customers will not call up to change back to paper billing so BT will be making much additional revenue through what is effectively a stealth price rise. The big question will be whether the remainder of the industry follows suit, of course.”