Breaking down barriers: How billing transparency builds customer trust
The business world today is a lot more transparent than it used to be — in all kinds of industries and in nearly every aspect of operations. It’s no longer taboo to discuss salaries, most companies are upfront about the data they gather on you, and many businesses are willing to share far more details about their products than you’d expect: For example, that brewery you love might give you the recipe for your favorite beer so you can try brewing a batch of your own. (Good luck getting your hands on KFC’s secret herbs-and-spices blend, though. Some things never change.)
This trend toward transparency has increased customer expectations, however, and it’s particularly important when it comes to billing. If you aren’t crystal clear about fees, taxes, and other charges, you’re not just giving customers something to complain about — you’re giving them a reason to leave. And if it’s really bad, you’ll go viral for all the wrong reasons.
Take the woman in Georgia who ordered three cases of toilet paper from Amazon. She probably thought she was getting a good deal until a surprise shipping charge appeared — one that tacked on an extra $7,455. Her saga ended up becoming national news. A little bit of bad PR might not be a big deal for one of the biggest companies in the world, but what would that publicity do to your business?
Another great example (or bad example, depending on how you look at it) are the so-called “junk fees” that some businesses charge. The term is often used for resort fees or destination fees at hotels, which many travelers find frustrating — especially when the added fees feel sneaky or egregious. One man who stayed at a hotel in Washington, D.C., found himself fighting back against a $20 “Daily Mandatory Destination Charge,” which he felt was an underhanded attempt by the hotel to frame its own fee as a required tax. He avoided the charge, but it took some work.
Transparency could have helped prevent those bad experiences: Even if a customer doesn’t like a fee, understanding it (or at least feeling like the business was upfront about it) can take some of the sting away.
Slack’s unique approach
Slack took a more radical approach to its billing — you might call it the opposite of “junk fees.” Just before its launch in August 2013, the company decided to credit customers for inactive users instead of charging them, which was unheard of in the enterprise software space.
This built invaluable trust and brand loyalty, and freed administrators from having to constantly scan and remove inactive users in the organization. It also garnered Slack some positive publicity when the company credited a client $2.07 for one inactive user, which was a small gesture that turned out to be potent.
What can transparency do for you?
With multiple billing periods, pricing and packaging changes, and even mid-cycle upgrades and downgrades, billing can be inherently complex for subscription businesses — which means it’s complex for your customers too. That makes it all the more important to provide transparency, while also giving customers as much control over their account as possible. The benefits go beyond bringing clarity to your transactions, or adding convenience to their subscription management. They increase your brand’s trustworthiness as well.
Chargebee + Avalara can help you do all of those things — and deliver better experiences to your customers. Here’s how.
At the account level
Your customers expect the ability to self-manage their account effectively and efficiently — and you should empower them to, even if that means also making it easy for them to downgrade or cancel their service. Almost everyone has had a frustrating experience when they needed to jump through several hoops to close an account, which sends a clear message that the company doesn’t really value you, but just cares about keeping your money flowing.
This matters more than ever in an era when it’s common for customers to sign up for a streaming service, cancel after a couple of months, then come back when the next hot show premieres. It’s better to let them do that with ease than risk them not coming back.
Chargebee’s self-serve portal allows your customers to make simple account changes autonomously, like changing the number of billing licenses or making upgrades/downgrades, with zero customer representative intervention. That’s a win for all parties.
At the invoice level
A detailed and accurate invoice should list out the line items with the customer’s details — plans, mandatory and nonmandatory add-ons, coupons, discounts, prorations, and credits, if any. Chargebee’s Billing LogIQ helps you map complex subscription billing scenarios with your business logic and put your billing system on autopilot.
At the tax level
Sales taxes vary from state to state and even city to city, and rates and regulations change all the time. For subscription businesses, trying to keep it all straight can be a daunting task, especially if you’re trying to do it manually. What’s worse, an error can easily snowball — with multiple customers over multiple months, even a small mistake can turn into a big hassle.
Thousands of businesses around the world use Avalara AvaTax to avoid those hassles. It automates sales tax calculation, keeps track of regulatory updates so you don’t have to, and ensures a reliable, transparent experience for your customers. Even better? Avalara integrates seamlessly with Chargebee to provide the following benefits, right in the system you already use:
- Enhanced accuracy: The AvaTax + Chargebee integration validates your customer’s address, identifies the proper tax jurisdiction, and reflects the accurate tax owed in your shopping cart in real time.
- Reduced risk: With over 12,000 sales and use tax jurisdictions, U.S. sales tax is a complex beast — but AvaTax is designed to help you tame it, reducing your risk of error with regular updates to reflect changing rates and rules. You don’t have to look anything up. You don’t have to wonder if that new law in Kansas (or anywhere else) affects you. AvaTax knows.
- Greater opportunity: Manually managing sales tax takes valuable time and resources — what could your people do with that extra bandwidth? Automating your sales tax compliance, including Avalara’s filing and remittance options, can create opportunities for growth in other areas.
Don’t give your customers a reason to leave when they look at their bill — and don’t give tax auditors a reason to levy penalties and fines for noncompliance. With Avalara and Chargebee, your business can build trust and drive more revenue through transparency and automation.
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