Simplifying a billing structure that had outgrown the people running it

The organisation: a national waste operator

A customer base grown partly by acquisition rarely arrives tidy. This one had 310,000 residential customers carrying, between them, 10 to 12 different billing types and around 8,000 separate prices, many of them for the same service.

The problem: complexity that landed on people, not systems

Some of that was harmless duplication: one customer paying €201 a year, another €202. Some of it was not. Plans that had never been advertised or sold in years were still live, a few of them carrying as few as 100 customers. And a large number of customers taken on through acquisition were still on the price they had joined at, years after the cost of serving them had moved on.

The cost of that landed on the people, not the system. Every billing type carried its own invoicing quirks. Staff had to retain all of this extra knowledge, because nearly every customer was handled slightly differently, and nobody could answer a pricing question without checking which of a dozen worlds the customer lived in.

What the work involved

Our team ran this work, from the first categorisation to the last batch.

• Categorise the whole base before changing anything. Our team placed every customer by billing plan, by price, and by what they actually used against what their plan assumed. That is what turned "the pricing is a mess" into a list of specific decisions.
• Close the plans that had stopped earning their place. Plans with almost no customers, plans that had not been sold in years, and plans that were near-identical to a neighbour were shuttered, with each customer moved to the closest surviving plan rather than to whatever was cheapest to administer.
• Collapse the price variations. Our team consolidated prices with little variance from each other. Prices too low to cover the cost of the service, mostly legacy rates inherited with acquired customers, were brought up to current levels.
• Model the trade before committing to it. What the consolidation would gain, what it would cost in customers, and how much complexity would actually come out, written down and agreed before a single customer was moved.
• Pace the rollout around the contact it creates. The plan ran over eight to nine months, and the constraint was never technical. Customers were told in batches small enough for the customer care team to absorb the calls and emails each batch produced.
• Write down the process and train the people on it. Our team documented the new plan structure, the rules for placing a customer in it and the answers to the questions customers would ask, then trained the customer care and billing teams on them before the first batch went out. The complexity had lived in people's heads; this is what replaced it.
• Hand the system supplier a specification, not a request. Our team wrote the changes up as instructions precise enough for the supplier to script and run in bulk, so 310,000 customers were not touched by hand.

The results: half the invoicing effort, and a review that repeats annually

• Manual invoicing dropped from 20 hours a week to 10. That was one staff member's week, spent by hand across every billing run the operator did, and halving it is the clearest measure of the complexity that came out.
• The first year brought in €3.5m of annualised revenue, excluding VAT, from bringing legacy prices back in line with cost.
• Around 95% of the 310,000 customers ended up on a simplified plan or price.
• The 8,000 price variations came down to fewer than 3,000.
• It became an annual review, and it has run every year since. Each pass takes six to eight months, most of that spent pacing the communications, and each one takes another layer of complexity out.
• New regulatory changes, such as weight limits and excess charges on plans that used to be unlimited, now land inside that review instead of adding another exception to the pile.

Pricing complexity accumulates. Every acquisition, every promotion and every exception is cheap to add, and nobody is ever given the job of taking one away. What changed it here was giving somebody that job, and repeating the exercise every year. This is the experience behind our consultancy.

See all four case studies, or read making releases boring at a high-street retailer and real-time integration for a recycling operator.