Billing Lessons Learned at eBay

by Elizabeth Tse

In my career, I have always held roles where - in one way or another - the complete focus is on the customer.

When I was at eBay, I oversaw worldwide billing, payments and collections operations, and gained an intimate understanding of what it takes to develop, implement and maintain a successful, large-scale billing and payments system. After many years in this industry, I have a deep and unique understanding of the intricacies of billing and payments. Even then, I bet you can all guess the most important element of a successful billing system….customer satisfaction.

Too often, people consider billing a back-office function and I think that’s so wrong. Billing is fundamentally a customer-facing process. In which other process in your entire business do you have an opportunity to touch your customer’s bank account?

As we embark on 2010, I wanted to share some billing advice and insight, relevant to companies of any size and at every point in their lifecycle.

Bring billing to the front office.
It’s your most important and your most regular direct customer touchpoint. Think of billing as an ongoing relationship with your customers, not just a transaction.

Pricing and packaging experimentation leads to competitive advantage
A good billing system is not a cost management issue, it helps a company focus on revenue growth and provides the flexibility to change, test and optimize pricing. Companies that experiment with pricing and packaging have a competitive advantage in that they quickly learn what their customers want and how much they are willing to pay. Testing various billing options makes it possible for companies to leverage their service to capture as much market share as possible. Get the most out of your services – bill strategically and learn from it.

Billing is hard.
Sure it starts out easy for some with a simple monthly package but then quickly a business grows and wants to package and promote different offerings. As you expand domestically and/or internationally, you need to address the complexities that accompany different taxation rates and laws, multi-currency conversions, and more. Billing is not just about an invoice, but also pricing, payments, collections and ultimately impacts financial reporting. It has multiple downstream implications.

Anything less than 100% accuracy is not acceptable to customers.
No customer ever shares a good billing story with you since 100% accuracy is the minimal acceptable performance level. However, they sure as heck will let you know if it's wrong. At eBay, during peak hours, customers were listing literally thousands of items per second. Simply being 99.95% accurate for an hour would have left me with thousands of unhappy customers, hence my keen focus on getting it right all the time.

Billing is fundamental to your business process, but it’s not a core competency (unless you’re Zuora).
Billing is mission critical and has to be done right, but you also need to have the confidence and freedom to focus on product development and customer satisfaction in other areas. Spend valuable time building what you sell and buying what you don’t. We’ve addressed this before on the Z-Blog.

I do have a few more billing tips and tricks up my sleeve and will continue to share my thoughts. In 2010, we will maintain our fierce focus on customer success and will showcase the real results and benefits realized by Zuora’s customers. You can already read about many of our customer success stories on Zuora’s customer page. We will expand this series to include regular blog posts as well, so you’ll be hearing from me a bit more this year.

Happy New Year!

Recurring Billing - Build vs. Buy

by K. V. Rao

There are so many emails, articles, television news stories – you name it – beginning with "In these economic times…" and continuing with a negative or depressing story about businesses suffering.

At Zuora, we don't claim to have the answer to bailouts or the housing crisis, but we do consider ourselves experts in SaaS and subscription businesses. Popular during the first tech downturn and again during the offshore outsourcing craze, the Build v. Buy debate is back.

From our perspective, it makes perfect sense to reengage in this discussion – it's something we discuss with our customers and prospects on a near daily basis.

What you build, you should sell.

Our customers are realizing they are diverting precious resources into critical, but non-core activities like subscriber management, billing, and payments instead of dedicating them to building and enhancing differentiation in core products. They fall behind in product differentiation and competitive advantage leading to loss of market share and revenue when operational laundry lists and details are usurping time that could be spent on revenue-generating activities.

What you can't sell, you should buy (or preferably subscribe).

This becomes even more important in tough economic times, when businesses get lean and mean, regain focus on building differentiation in the core business, and divest non-core activities or outsource them.

Today, business agility is made easier by advances in cloud computing, SaaS, and service oriented architectures. These technology trends are making it easier and easier to plug and play best of breed components without having to re-invent or re-build everything.

And with pay-as-you-go pricing (also re-emerging with consumers in the form of 'layaway'), the price is right as well!!!

Most of our customers get it - they chose to invest their precious development resources in gaining market leadership in their chosen domain, be it marketing tools like Marketo, online analytics like Coremetrics, or online storage like Box.net, they made the wise decision to subscribe to our billing service instead of building this critical (but not core) functionality themselves.

Subscription-based services are becoming a strategic advantage, especially in this economy. With the availability of subscription-based offerings for everything from cloud computing (Amazon Web Services) to payroll (ADP, Paycycle) to billing (Zuora!), today's businesses have no excuse. There is enormous flexibility, efficiency, cost-effectiveness and business agility just a few mouse clicks away.