Billers Overlook What Drives Customers Away

Even a single bill can be a frequent interaction between a service provider and a customer. However, recent research shows consumers rate these experiences as average at best. Conducted by PYMNTS Intelligence in partnership with Paymentus, the "Service Commerce Performance Gap" survey polled 2,566 American consumers and 240 senior billing decision-makers across various industries.

Both groups were evaluated using the same 0-to-100 Service Commerce Performance Index, which allowed for comparison between provider perceptions and consumer experiences.

The study revealed several key insights. First, no industry scored above a C on the index, indicating that no sector outperformed the average. The weakest pillar of the index was relationship quality, averaging a 62. None of the 28 combinations of seven billing stages and four industries earned a B. Payment execution fared better, suggesting providers are more proficient at processing payments than creating the larger billing experience.

Contrary to their own self-assessment, providers rated themselves more favorably than their customers did. Only 5% to 6% of service providers believed they were below ideal on core billing capabilities, while consumers reported shortcomings at twice that rate. Moreover, providers underestimated the impact of billing on customer loyalty.

Only 5% of service providers considered billing a major driver of loyalty, whereas 58% of consumers believed their billing and payment experience influenced their overall perception of a provider's service quality.

In terms of payment preferences, consumers' expectations and actual behaviors diverged. While 55% of consumers preferred paying bills with a credit card, only 18% used this method most often. Digital wallets were preferred by 41% of consumers but only used by 10%. Installment plans were favored by 23% of consumers but used by just 2%.

Lastly, poor billing scores were directly linked to increased customer switching risk. Consumers who were likely to switch had an average Service Commerce Performance Index score of 56, while those planning to stay scored the experience at 76, a 20-point difference. Similarly, consumers who found bill pay harder than retail checkout rated the experience 15 points lower than those who found both equally easy.

Consumers who frequently worried about affording upcoming bills also scored nearly 20 points lower than those who never worried.

Interestingly, the report found that 65% of providers believed they understood their churn drivers well, but only 19% backed this claim with data and segmented analysis. Among providers experiencing rising churn, 84% relied on general impressions or partial visibility instead of rigorous analysis. In summary, billing performance provides providers with a quantifiable measure of customer retention that many may not be tracking closely enough.