Resellers should look beyond the raw numbers for the bigger picture.

It was at a recent telecommunications conference that I first heard the term “bill shock”.

This is the greatest example of supplier arrogance that I can remember in recent times.

I think only a telco could have such a terrible billing model that they have invented a medical term to describe how their clients go into a state of shock as a result of receiving their bill.

Medically, shock is a condition that arises in relation to a terrifying event. Epinephrine is released in the body which triggers an increase in heart rate and breathing, constricting blood vessels in many parts of the body and tightening muscles. You can just picture those muscles tightening around the bill as it is opened and the full enormity of the bill is revealed.

So. . . rather than look at why their clients react in this way, a telco just invents a new term: “bill shock”.

I’m sure you have had a client at some time contact you with said horrendous bill in their hands. A new service pack was released which triggered some large downloads or there was a quick visit overseas or there was a virus outbreak. All seemingly simple events that our IT non-literate clients don’t usually associate with a huge bill and then, just like a speeding camera fine that turns up in the mail weeks after the event, a telco bill lands on the client’s desk and it simply has too many digits before the decimal point.

The most interesting part is that telcos see this as fantastic additional revenue. I have heard figures from them about the incredible revenue they generate from over-usage charges.

From a simplistic viewpoint, you might point to the actual dollars and say it is fantastic – but I would love to know how much time (and hence dollars) is wasted by client service operators having to deal with incredibly stressed and angry clients demanding to know why they need to sell the car to pay for their bill.

So while the bean counters may look at the actual dollars, the marketing team looks at the client loyalty that is lost and the bad PR created around the events – as many make the national news.

Most telcos could probably employ fewer people in customer service and fewer people in their legal teams if they simply reduced their over-usage charges to something that is realistic.

One client even told me a farcical story where they purchased a mobile device where the account was linked to that device. That device failed and while it was being repaired the SIM card was used for several weeks in another device. Since this was against the rules, some incredible formula was used that resulted in a $40,000 bill being received by the client. That is not a typo – that number had five digits! Legal arguments went back and forth for several months before the bill was finally waived on the logical argument that if the account was locked to the device, then it shouldn’t have worked when placed in another device and hence the telco was at fault.

It has actually reached the point where “bill shock” will soon be illegal in the European Community as service providers will be required, by law, to warn clients when they have gone over data or time limits. The sad part is that customer service is at such a low level in this area that a government has to legislate to introduce commonsense.

The lesson for all of us? There are times when we are convinced (or our accountant convinces us) that raw numbers are all we should judge our businesses by. If we are taking a long-term view, then this can be very dangerous. In the short-term, some numbers for over-usage probably look great on a P&L sheet for a telco, but if the real cost of the additional staff, the additional legals, the loss of loyalty and the bad publicity were all taken into account, then the nice looking number on the P&L might suddenly turn a light shade of red. Make sure we try to look at our big picture when analysing our raw numbers.

Send me your thoughts on how you deal with “bill shock” at

The first 10 emails I receive will receive a copy of my new book, Small Business Ru!es.

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