How can a business convince customers to switch from paper-based billing to faster, cheaper and greener direct payment options? The short answer: You gotta promote it.
Every month, consumers pay nearly 500 million bills via the Automated Clearing House (ACH) network. Indeed, electronic bill payment has seen impressive growth. But an estimated 42 percent of consumer bills still go through the postal system.
According to the National Automated Clearing House Association (NACHA), the companies that are most successful in migrating customers to paperless billing are those with a marketing budget dedicated toward achieving that goal.
After studying more than 1,000 billers, NACHA concluded the most effective paper statement suppression campaigns are those in which billers actively highlight the benefits of direct payment. Speed, ease, and convenience all rate highly among consumers, according to the extensive study.
NACHA also found that promoting the environmental benefits of electronic payment options also yielded positive results. If you can’t convert customers on the financial advantages, it seems, you can an appeal to their conscience works.
How Large a Budget Do You Need To Boost Direct Payment Adoption?
Because NACHA’s survey doesn't make specific recommendations on marketing budgets, you'll need to let intuition be your guide. But keep the following in mind:
- The average paper check generates anywhere between $4 and $20 in internal costs, once you factor in material expenses, employee hours and processing delays. Consequently, the ROI of even the most aggressive marketing campaigns is quite high.
- NACHA’s report also points out that many billers benefited from "cross pollination" efforts when they combined their marketing campaigns with banks and other financial institutions. Regardless of budget, you may not have to shoulder all expenses on your own.
- New customers represent low-hanging fruit. As you bring them into your system, simply don’t make paper-based billing an option. At the very least, make direct payment something they must physically opt out of (preferably through an online form).