Paperless billing: Cost savings calculations and implementation strategies

Last updated
Jan 22, 2024
What would it mean to go from 50% of your customers on paperless billing, to 90%? Let's do the math.

Transitioning customers from traditional paper statements and mail delivery over to digital billing methods has become a major priority for many businesses today. And for good reason – going paperless provides compelling benefits like cost reductions, improved efficiency, and environmental impact.

In this guide, we’ll cover what you need to know to run a successful paperless billing campaign, including:

  • Calculating potential cost savings
  • Creating adoption incentives
  • Implementing smoothly to drive enrollment
  • Maximizing ongoing customer satisfaction
  • Avoiding potential pitfalls

Why get customers on paperless billing?

Paperless costs savings

There's conflicting data out there about the true costs of paperless. We've seen companies charge fees ranging from $2 to $6 for sending paper bills, which can give us a range of costs.

Somewhere along the way a SaaS company decided to say it's $12 to $30, but it's nearly impossible to find that original source research. On the other hand, Jim Haigh from a now-defunct website called "Keep Me Posted" (that advocates for free paper billing) reported to Paperage in 2020 that it costs less than $1 based on his research. However, both of these sources have an agenda, so to speak, so can either of them be trusted?

Let's take the conservative side and say it's $1 to print, including an envelope and labor, and current postage is 55 cents (yes there are lower prices unlocked for higher volume sends).

For a company sending 10,000 bills at $1 printing and $0.55 postage, moving 70% of customers to email would save nearly $130,000 annually. At the high end of $5 per bill, this could be upwards of $420,000 annually. At either end of the range, this is a good chunk of change.

Increased engagement

When your customers sign up for email or app-based billing, you're getting more of their digital attention. Unlike postage, sending digital communications is a lot less costly. How can you use your new relationship to engage with your customers?

  • Send a deal or a discount to thank them for going paperless
  • Complement with a robust perks program and have an excuse to reach out more often
  • Promote new products and services directly in their portal or in emails

Increased efficiency

With instant digital delivery, the billing cycle speeds up dramatically. Customer service inquiries about invoices also decrease, freeing up staff for other priorities. Customers on autopay are great targets for paperless billing, and vice versa. Use this as a way to promote other services as well.

Environmental impact

Paperless billing is a sustainability win, reducing paper waste and carbon emissions. For many customers, this is enough to sign up. For quite a few others however, they may not have access to the Internet and might still rely on paper statements. Despite that, according to Statista, since its high of around 213 billion units in 2006, the U.S. Postal Service (USPS) has declined in mail volume YoY. In 2022, the USPS delivered only 127.3 billion units.

Calculating cost savings

The potential reductions depend on your current operations and customer base. Use realistic projections to justify the investment needed to transition.

Here’s how to estimate:

  1. Gather data on current printing, postage, IT and customer service costs.
  2. Project customer adoption percentage based on incentives
  3. Remove proportional expenses associated with customers going paperless
  4. Compare old costs vs. new costs to reveal savings

For example:

A company spending $15,500 to mail 10,000 bills could save:  

  • $7,750 per month by moving 50% of customers to paperless.
  • $10,850 per month by moving 70% of customers to paperless.
  • $13,950 per month at 90% - that's $167,400 per year!

People are taking the paperless plunge

McKinsey and Company have completed a "digital payments survey" every year for the past seven years. During covid's early havoc in 2020, there was rapid adoption of digital payments, though it was questionable how much was due to necessity and would be permanent.

There was also acceleration of adoption of other forms of digital payments, like cryptocurrency, digital wallets, and peer-to-peer apps, indicating overall more integration with digital payments and expansion of more types of products and services.

Of those surveyed, 83% prefer to pay with a mobile device or online, more than 20% want to use a payment app or digital wallet, and only about 5% said they want to pay through the mail.

In 2021, according to Broadridge, approximately 3 in 4 adults in the US and Canada across all generations intended to switch at least one bill to paperless. Millennials were at the forefront with 87% saying they'd start paying at least one bill digitally in 2021.

According to Broadridge, approximately 3 in 4 adults in the US and Canada across all generations intended to switch at least one bill to paperless in 2021. Millennials are at the forefront with 87% saying they'll start paying at least one bill digitally in 2021. The graph shows Gen X in 2nd place and boomers last, amongst those switching.


So it seems like the trends are on the digital revolution side.

But what about the laggards?

In 2022's survey, McKinsey found that "although penetration of digital payments reached 78 percent in 2020, recent growth has been incremental, implying that some systemic barrier must be overcome to reach the remaining group."

They also found that over 25% of consumers could still be considered "digitally averse". So keeping your program easy to sign up for, easy to use, and secure & private is essential.

McKinsey & Company's 2019 Digital Payments Survey found that 25% of consumers fall into a behavior segement of "digitally averse." The graph shows 15% as tech savvy, 23% convenience seekers, and 36% as "offer junkies".

Don't go full rogue

We don't recommend going full rogue and switching everyone automatically, or eliminating paper statements without an alternative. We do recommend taking a strategic approach to realize the full value while also keeping customers happy and engaged.

The risk is cutting off those who are not digitally connected to their bank, or without access to Internet, and causing yourself a PR mishap. You might not be able to get to 100% switching, but going forward you can change the game.

Switch the default going forward

This onboarding slide from Charles Schwab shows that the paperless boxes are checked as a default, and the user must un-check them to opt into paper billing. This taps into user psychology and the idea they they're already opted in. Those who truly need paper billing will select it at this point.

Screenshot from Charles Schwab showing paperless billing selections are default preselected to "yes" and the user must opt into paper billing.
Charles Schwab onboarding flow shows paperless is the default. But - no perk.

Drive adoption with creative incentives

Incentives are a powerful way to influence desired customer behavior. By offering a perk or gift (like a $5 cup of coffee, or $20 off coupon), companies can make headway into converting more of the "digitally averse" segment who may be lagging to sign up for paperless.

The cost savings between 90% adoption and 50% adoption is well.. Almost double. So it's worth a multi-pronged strategy that includes multiple incentives to encourage paperless signups.

If you're ready to start or reinvigorate your campaign, consider a multi-channel approach to repeatedly communicate with your customers using multiple messages.

The right incentives speak to what motivates each customer. Get creative to reach the whole breadth of your customer segments.

Executing a seamless transition

Follow these best practices to rollout paperless smoothly:

  • Allow paperless or paper billing based on preference or need.
  • Highlight sustainability impacts and convenience benefits.
  • Send ongoing email reminders with 1-click instant access links.
  • Bake prompts and checklists into your account portal.
  • Provide extensive educational resources and support.
  • Monitor feedback closely and resolve issues immediately.

Giving customers control, educating them on benefits, and offering prompts plus ongoing support will ease the transition.

Avoid potential pitfalls

We mentioned this earlier, but this is important to recap, because serving your entire constituency is not only the law (Americans with Disabilities Act of 1990) but it's just the right thing to do so as not to alienate any of your customers. What else you should keep in mind and prepare for: 

  • Customer education around accessing digital bills
  • Concerns over email security and privacy
  • Lack of internet access for some demographics
  • Loss of physical statement touchpoints
  • Missed emails and payments
  • Overwhelming customers with new features
  • Deliverability of emails

Mitigate risks through thorough training, education, professional IT support, communication, and reasonable paper options. Handle the transition carefully to avoid missteps.

Then what? Maximize ongoing customer value

Don’t stop at getting customers enrolled in paperless. Leverage digital billing to provide ongoing value:

  • Send relevant tips or offers based on billing and purchase data.
  • Enable seamless one-click payments from emailed invoices, and redesign emails to include complementary deals.
  • Link a perks center to your portal to give preferred customers exclusive access to deals and offers.
  • Automate personalized payment reminder texts or emails.
  • Continuously optimize billing emails and portal experience.

Paperless billing provides a foundation to digitize and personalize the entire billing and payments experience. Use behavioral data and customer feedback to enhance value over time.

When executed strategically, moving customers to paperless billing cuts costs, drives efficiency, and provides environmental gains. With the right approach, paperless billing can be a big competitive advantage for your business and a convenience win for customers.

Contact us to create a custom campaign to boost paperless.

About the author
Adrienne Kmetz
Adrienne is a marketing expert with a career history of working in startups of all sizes, from early stage to series A. She has 17+ years of experience writing about business, finance, and entrepreneurship. She went to Colorado College where she majored in skiing.
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