Bill presentment has long been a low-priority part of SunTrust Banks Inc.'s online banking service, but the Atlanta company is planning a major marketing campaign in response to a report that found that people who view their bills through its Web site are more valuable than the average customer.
The Forrester Research Inc. report found that people who receive electronic bills are less likely to move their accounts to another financial company than the average SunTrust customer, typically carry higher balances, and purchase more products from the bank. Over a five-year period, these customers generate 140% more profits, Forrester estimated.
Sarah Overcash, SunTrust's assistant vice president and online bill-pay product manager, said, "It was always understood, in theory," that bill presentment, or e-bills, can add to the bottom line.
"But we never had any hard, quantifiable numbers," she said. "We knew just inherently that we should be marketing e-bills, but we were focusing more on overall adoption of online banking and online bill pay, and e-bill was just something that we would get to eventually. We now have proof that this is something that we should be focusing on."
Over the next few weeks SunTrust plans to promote bill presentment to its bill-pay customers.
Cathy Graeber, a Forrester principal analyst, wrote the report, using figures calculated by Aspen Marketing Services. The report found that SunTrust customers who view three or more bills online a month are almost six times less likely to leave the bank than the average customer, purchase 66% more banking products, and their account balances are typically 121% higher.
And the more people use SunTrust's online banking services, the more tied to the bank they become, she said. In every category, people who use e-bills scored higher than people who bank online and pay bills but do not use e-bills.
Few bankers realize that offering bill presentment can significantly boost results in other parts of the company, and few banks are actively promoting the service, Ms. Graeber said. "Many banks have had e-bills for years," she said. "There is just this kind of mentality of 'If I build it, they'll see it.' "
She said Bank of America Corp. realized in 2002 that offering online bill-pay services free could improve its bottom line. B of A had previously charged bill-pay customers, but it dropped the fee after concluding that those customers were more likely to carry higher balances and purchase more banking products — the same benefits associated with e-bills.
Ms. Overcash said that after SunTrust's bill-pay provider, CheckFree Corp., upgraded its software in March of last year to make it easier for customers to sign up to receive e-bills, the Fiserv Inc. unit suggested that SunTrust participate in a study of e-bill use.
In the four to six weeks after the upgrade, she said, e-bill activation increased by 350%, though she would not say how many people use the service.
Ms. Graeber said banks are wrong to think that they need not promote e-bills if their rivals are not doing so. "Banks get hung up on thinking of each other as their competitors," she said. "They should be more concerned and more in tune with what the billers are doing."
