Tuesday, August 24, 2010

Leaving the Mailstream: Verizon

Today, Verizon launched a campaign to convince more residential phone customers to both receive their bills electronically and pay electronically.   The press release combined by an analysis of Verizon's most recent financial statements provides some useful details that explain why transaction mail volumes are decline so fast.
  • The number of Verizon's wireline (traditional) phone residential customers are declining rapidly.  In the 2nd quarter of 2010 Verizon had 17.4 million residential customers, 11.4% fewer than a year earlier.  Some of this decline reflects shift toward phone service provided by the cable company or on-line services like Vonage but most of the decline reflects residential customers unplugging from the traditional phone network.
  • The number of business customers is also declining but nearly as quickly.  In the 2nd quarter of 2010 Verizon had 13.6. million business customers, 5.9% fewer than a year earlier.
  • In June of 2009, 8 million residential customers paid their bills electronically or 46% of all Verizon residential customers are paying their wireline bill electronically.  
  • Currently 2.4 million Verizon customers receive their wireline bill on line or 14% of residential customers receive their bills electronically.  
  • Verizon expects the promotion will increase electronic bill presentment to rise by 250,000.  Following the promotion, Verizon will have around 16% of its customers both receiving bills electronically and paying electronically.

Verizon's effort is designed to reach web-connected wireline customers.   Given that the cost of prize money and advertising expense are modest, the potential return for Verizon is significant.   In all likelihood, Verizon will develop similar promotions in the future as it tries to shrink its paper billing and payment operations.


Anonymous said...

Makes perfect sense. I dumped my land line a year ago. My cell phone transactions are all performed electronically.

The difference between Verizon and USPS is (imho) that Verizon is a business while USPS is not. Verizon is not saddled by a universal service obligation, PAEA pre-funding payments, etc. Could Verizon make money if required by law to provide cell coverage nationwide, instead of just in heavily populated/traveled areas? While making multi-billion dollar payments that no other private company or federal department is required to make? Etc., etc. Put such restrictions on Verizon and watch the red ink build.

Anonymous said...

The Postal Service offered online bill payment from April 2000 to April 2004.
Why was this money-making service dropped?