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3 2015 Electronic Accounts Payable Benchmark Survey Results The Provider s Role in EAP Program Success Richard J. Palmer Professor of Accounting Southeast Missouri State University Mahendra Gupta Professor of Accounting and Management Washington University in St. Louis July , RPMG Research Corporation. No part of this manuscript may be duplicated, reproduced, or quoted without the express written permission of Richard J. Palmer and Mahendra Gupta. To request permission, contact Richard Palmer by phone ( ) or (Richard.Palmer@RPMGresearch.net).

4 Preface We are pleased to present the 2015 Electronic Accounts Payable (EAP) Benchmark Survey Results. The report is based on data and analysis from over eight hundred EAP-using organizations across North America to identify and understand market trends and the factors that contribute to or detract from the use of and benefits associated with EAP (dynamicallyadjustable cardless accounts used by organizations to pay for invoiced goods and services). Our analysis of the survey data is divided into three separate documents to assist the reader in finding the desired information in the most convenient manner, as follows: Market Trends and Best Practice Program Choices (the Main report) o Analyses and highlights of current trends in EAP use. o In-depth examination of factors critical to the success of EAP programs. o Identification of future trends and growth opportunities for EAP use. Program Profiles by Organization Type and Size o Benchmark data to evaluate EAP programs, broken down within corporate (by size and industry) and government and not-for-profit sectors (states and state agencies, city and county governments, colleges and universities, schools, and not-for-profits). The Provider s Role in EAP Program Success o An examination of customer satisfaction with and importance of EAP provider activities (across economic, service and support, reporting, and integration factors) and how it affects EAP program performance. A Table of Contents for the current report, as well as a Quick Guide to the Reports, which provides chapter content for the other reports, can be found on the next two pages. Financial institutions began marketing EAP accounts around Overall, the growth of EAP has been consistently strong in both good and poor economic conditions. However, the patterns of EAP use and benefits received by EAP-using organizations still vary widely. While many organizations have taken steps to advance their use of EAP to the next level, some organizations lag behind. This Report examines the impact that EAP providers have on EAP program performance, customer satisfaction, and the intent to switch EAP providers. We want to express our sincere thanks to the organizations and providers that participated in the Survey and offered their valuable input. We hope that the unselfish commitment of their time results in more efficient means to acquire and pay for goods in the marketplace. Richard J. Palmer Southeast Missouri State University Mahendra Gupta Washington University in St. Louis 2015 Electronic Accounts Payable Benchmark Survey Results Preface 4

5 Table of Contents Below is a listing of the chapters included in this Report. Click on a chapter title to jump to that page. To return to the Table of Contents, click the link in the lower left corner of any page. Chapter Title Page # i Preface ii Table of Contents iii A Quick Guide to the Reports iv Executive Summary INTRODUCTION AND CUSTOMER SATISFACTION 01 Introduction, Definitions, and Description of Sample Trends in Customer Satisfaction: Economics Trends in Customer Satisfaction: Customer Service and Support Trends in Customer Satisfaction: Data Integration and Reporting Customer Satisfaction and EAP Program Performance Customer Satisfaction and Switching EAP Acceptance by EAP Users CONCLUSION AND ACKNOWLEDGEMENTS Conclusion Acknowledgements About the Authors Electronic Accounts Payable Benchmark Survey Results Table of Contents 5

6 A Quick Guide to the Reports The analysis of the 2015 Electronic Accounts Payable Benchmark Survey is broken into three separate reports to help the reader find the information they desire in the most expeditious manner. The three reports are entitled: Main Report: Market Trends and Best Practice Program Choices Report #2: Program Profiles by Organization Type and Size Report #3: The Provider s Role in EAP Program Success The content of Report #3 is the subject of this document. Information on where analyses may be found in the other reports is identified below. Main Report: Market Trends and Best Practice Program Choices Title Chapter Introduction, Definitions, and Description of Sample 1 EAP Goals and Comparative Advantage 2 EAP Spending Norms 3 EAP Market Size and Spending Growth 4 EAP Benefits 5 EAP Growth Potential 6 Connecting with Suppliers 7 Supplier Acceptance: Drivers and Impact 8 Best Practices 9-15 Mechanics of EAP and Integration with Organizational Information Systems 16 EAP Governance and Risk Management 17 EAP and Plastic Purchasing Cards: Integration and Advancement 18 Internal and External Fraud 19 Differences by Type of EAP Used App. A Report #2: Program Profiles by Organization Type and Size Title Chapter Introduction, Definitions, and Description of Sample 1 Program Performance: Fortune 500-Size, Large Market, and Middle Market 2-4 Corporations Program Performance: State and City/County Government Agencies 5-6 Program Performance: Colleges and Universities, School Districts, and Not-for- 7-9 Profit Organizations Program Performance: Small Organizations 10 Benchmark Statistics by Organization Type and Size App. A Benchmark Statistics by Industry App. B 2015 Electronic Accounts Payable Benchmark Survey Results A Quick Guide to the Reports 6

7 Executive Summary In December 2014, a 40-page web-based 2015 Electronic Accounts Payable Benchmark Survey was released to 3,970 separate organizations that were customers of one of nineteen major providers (including Bank of America Merrill Lynch, BMO, Bank of the West, BBVA Compass, Citibank, Comdata, Comerica, Commerce Bank, Electronic Funds Source, Fifth Third Bank, J.P. Morgan Chase, PNC Bank, Scotiabank, SunTrust, UMB, U.S. Bank, Wells Fargo, WEX, and Zions Bank) or members of the National Association of Purchasing Card Professionals and the National Institute of Governmental Purchasing. Eight hundred and seventy responses were received, resulting in a response rate of 22%. All major EAP providing brands (American Express, MasterCard, and Visa) are represented in the survey response. Electronic Accounts Payable (hereafter EAP ) is a relatively new application of card technology for commercial use. This survey defined EAP as non-plastic purchasing card accounts used to pay for goods and services after an invoice has been received for those goods or services. For purposes of this survey, there are two models of EAP implementation---push payments and pull payments. Within the pull model, EAP has three major variations. Specifically, EAP can differ based on whether or not the virtual card number is constant or if the card number (and its associated credit line) is created specifically for a single transaction and then retired (e.g., a single use account). Within the variation in which the card number is constant, a further distinction can be made regarding the identity of the party (buyer or seller) that will maintain possession of the card number. The second model of EAP implementation is referred to as straightthrough, push, or buyer-initiated payments (BIP). This payment option entails a card account that the buying organization charges on behalf of the vendor, resulting in funds being deposited (pushed) directly into the vendor s bank account Electronic Accounts Payable Benchmark Survey Results Executive Summary 7

8 Trends in Customer Satisfaction: Economics Customers report increasing levels of satisfaction (compared to 2012) with all aspects of the economic relationship with their EAP provider, including the four most important elements (rebates/incentives tied to EAP spending, transactions costs, bank fees associated with EAP, and the overall economic relationship with the provider in relation to EAP). EAP-user satisfaction related to the economic relationship with the EAP provider is a meaningful driver of EAP program performance. The fixation of some EAP-using organizations with rebates and incentives is a concern inasmuch as it indicates a limited recognition of the range of benefits available from EAP payment. Satisfaction with both EAP economics and customer service and support have increased notably since 2012 Trends in Customer Satisfaction: Customer Service and Support Customers report increasing levels of satisfaction (compared to 2012) with all aspects of customer service and support, including the four most important elements (assistance in getting suppliers to accept EAP payment, training materials and support, quality of help from help desk, and overall customer service and support). Negative satisfaction gaps exist for the vast majority of customer service items, with the largest gaps between importance and satisfaction attached to the most important aspects of customer service and support. Seventy-four percent of respondents are satisfied or very satisfied with the performance of their Account Manager, which speaks well of EAP providers hiring and training practices. Customer satisfaction with the performance of their EAP provider s Account Manager rises with increased frequency of communications with the manager. In particular, 46% of organizations that communicate weekly or monthly with their Account Manager are very satisfied with the performance of their Account Manager, while only 25% (22%) of organizations that communicate quarterly (annually or biannually) express a similarly high level of satisfaction. Satisfaction with customer service and support translates into more productive EAP programs that pay for a higher percentage of under $2,500, $2,501 to $10,000, and $10,001 to $100,000 transactions with EAP Electronic Accounts Payable Benchmark Survey Results Executive Summary 8

9 Trends in Customer Satisfaction: Data Integration and Reporting Most respondents consider data integration, reconciliation, and reporting of transactionrelated data to be highly important aspects of the EAP program. Customers report increasing levels of satisfaction (compared to 2012 data) with integration and reporting of EAP data. Respondents report negative satisfaction gaps in the ability to integrate EAP data into resource planning, general ledger, Accounts Payable, or other internal information systems and in the overall integration of EAP data with organizational information systems. Customer Satisfaction and EAP Program Performance Overall, the five largest negative satisfaction gaps are for rebates/incentives tied to EAP spending, the ability to reconcile EAP spending to internal spending records, assistance in getting suppliers to accept EAP payment, the overall EAP reporting package, and training materials and support. The largest positive gaps relate to items of lower importance to respondents. Of greatest need for attention are items of high importance that have large negative satisfaction gaps, including rebates/incentives tied to EAP spending, the ability to reconcile EAP spending to internal spending records, assistance in getting suppliers to accept EAP payment, the overall EAP reporting package, and the quality of help from the help desk. Organizations with higher overall levels of satisfaction with EAP economics, service and support, data integration, and reporting have higher average monthly EAP spending and capture a higher percentage of transactions on the EAP platform (at all dollar levels). Higher overall customer satisfaction is associated with higher EAP spending and overall program performance Higher overall customer satisfaction is associated with more frequent communications and greater satisfaction with the EAP provider s Account Manager. Highly satisfied EAP-users pay a higher number of suppliers with EAP and are more likely to be satisfied or very satisfied with the overall level of supplier acceptance of EAP payment. Organizations with higher overall customer satisfaction are more likely to report (a) automated and trouble-free reconciliations of EAP transaction activity, and (b) that EAP account spending is significantly or completely integrated with the organizational accounting information/erp system Electronic Accounts Payable Benchmark Survey Results Executive Summary 9

10 Customer Satisfaction and Switching Six percent of respondents to the 2015 EAP Benchmark Survey indicate that their organization is currently considering switching EAP providers. The more important reasons for switching EAP providers include the desire for greater rebates or revenue sharing, a perceived benefit from consolidating all banking relationships to one institution, and the desire for better service, support, and spend reporting capabilities. Organizations with higher overall customer satisfaction are significantly less likely to be considering switching EAP providers. The percentage of organizations considering switching EAP providers is notably lower among organizations that communicate with their Account Manager on a weekly or monthly basis. Further, the percentage considering switching EAP providers is significantly lower among those who are satisfied with their Account Manager. EAP Acceptance by EAP Users About 19% of respondents to the 2015 EAP Benchmark Survey both used EAP and accepted payment by EAP. Those organizations that accept payment by EAP (in addition to paying with EAP) identify guaranteed payment faster receipt of payment, improved cash flow, ease of process, and lower AR processing costs as notable benefits. A minority of organizations place conditions on EAP acceptance (such as the elimination of discounts associated with early payment of an invoice). Eighty-one percent of EAP-using respondents did not accept EAP as a means of payment, primarily due to lack of demand from buyers, merchant fees that are too high, and the lack of proper staff and/or training. Seventeen percent of respondents that currently do not accept EAP payment report that their organization plans to accept EAP payment within the next 5 years Electronic Accounts Payable Benchmark Survey Results Executive Summary 10

11 Concluding Thoughts In summarizing the message of this Report, we have given evidence of improved EAP provider performance across key aspects of the EAP value proposition and that higher customer satisfaction is associated with better EAP program performance. Notwithstanding, improvement potential exists and a segment of customers appears in need of greater provider support to move their programs forward. The key point of this report is that a highly satisfied customer tends to be a productive customer, reporting higher average monthly EAP spending, paying a higher number of suppliers with EAP, and capturing a higher percentage of transactions on the EAP platform (at all dollar levels). Further, highly satisfied organizations are less likely to be considering switching EAP providers. Since EAP progress and customer satisfaction with the EAP value proposition move in tandem, it calls for the providers and users to work together to optimize the benefit of EAP use. Dwight If we are to build and maintain the strength required to cope with the problems of this age, we must cooperate one with the other, every section with all others, each group with its neighbors. D. Eisenhower 2015 Electronic Accounts Payable Benchmark Survey Results Executive Summary 11

12 Chapter 1 Introduction, Definitions, and Description of Sample In December 2014, a 40-page web-based 2015 Electronic Accounts Payable Benchmark Survey was delivered to 3,970 separate organizations that were customers of one of nineteen major providers (including Bank of America Merrill Lynch, BMO, Bank of the West, BBVA Compass, Citibank, Comdata, Comerica, Commerce Bank, Electronic Funds Source, Fifth Third Bank, J.P. Morgan Chase, PNC Bank, Scotiabank, SunTrust, UMB, U.S. Bank, Wells Fargo, WEX, and Zions Bank) or members of the National Association of Purchasing Card Professionals and the National Institute of Governmental Purchasing. Eight hundred and seventy responses were received, resulting in a response rate of 22%. 1 All major EAP providing brands (American Express, MasterCard, and Visa) are represented in the survey response. 1 Occasionally, respondents may have given an incomplete response resulting in a different number of responses for different questions. Throughout this report, our analysis of any given question will be based on usable responses to each question. In addition, we have purged unusual outlier responses to specific questionnaire items when appropriate to facilitate a meaningful understanding of the data and made minor adjustments to 2012 data to match 2015 sample composition. Introduction, Definitions, 2015 Electronic Accounts Payable Benchmark Survey Results and Description of Sample 12

13 Defining Electronic Accounts Payable Electronic Accounts Payable (hereafter EAP ) is a relatively new application of card technology for commercial use. This survey defined EAP as non-plastic purchasing card accounts used to pay for goods and services after an invoice has been received for those goods or services. The essence of EAP is a dynamically-adjustable account, meaning that the available credit on a card account is adjusted to match a specific transaction to be charged to a card number. Hence, after the transaction is completed the available line of credit on the card is of little or no value. As shown in Exhibit 1, there are two models of EAP implementation, which we refer to as push and pull. The pull model is so named because suppliers are required to input transaction data in order to pull the transaction through to its conclusion. Within the pull model, EAP has three major variations. Specifically, EAP can differ based on whether or not the virtual card number is constant or if the card number (and its associated credit line) is created specifically for a single transaction and then retired (e.g., a single use account). Within the variation in which the card number is constant, a further distinction can be made regarding the identity of the party (buyer or seller) that will maintain possession of the card number. Buyers and sellers tend to have preferences about where the card number is housed. In some cases, buyers prefer the seller to house the card number so that it does not have to be communicated with every purchase. In other cases, sellers do not want to house the number and take on the associated responsibility for its security. The second model of EAP implementation is referred to as straight-through, push, or buyer-initiated payments (BIP). This payment option entails a card account that the buying organization charges on behalf of the vendor, resulting in funds being deposited (pushed) directly into the vendor s bank account. Exhibit 1: EAP Models and Variations Introduction, Definitions, 2015 Electronic Accounts Payable Benchmark Survey Results and Description of Sample 13

14 Respondent Profile Exhibit 2 shows a breakdown of survey respondents by organizational type: 33% are Privately- Owned Corporations, 21% are Public Corporations, 15% are Not-for-Profit Organizations, 12% are City or County Governments, 9% are Colleges or Universities, 8% are School Districts, and 2% are Federal or State Government Agencies. Exhibit 2: Respondents by Organizational Type Exhibit 3 on the next page separates public and private corporations (which represent 54% of the total sample response as shown in Exhibit 2) into four size categories: 29% are Fortune 500-Size companies (annual sales revenue greater than or equal to $2 billion), 25% are Large Market companies (annual sales revenue greater than or equal to $500 million, but less than $2 billion), 39% are Middle Market companies (annual sales revenue greater than or equal to $25 million, but less than $500 million) and 7% are Small Market companies (annual sales revenue of less than $25 million). To minimize any potential for distortion due to the presence of smaller organizations in the sample, hereafter all figures and exhibits in this Report exclude Small Market corporations and government and not-for-profit entities with annual budgets below $25 million. Information about EAP use at these organizations is discussed in the Program Performance: Small Organizations chapter of Report 2 (Program Profiles by Organizational Type and Size). Introduction, Definitions, 2015 Electronic Accounts Payable Benchmark Survey Results and Description of Sample 14

15 Exhibit 3: Corporate Respondents by Size Fortune 500-Size Large Market Middle Market Small Market 29% 25% 39% 7% F o r t u n e 500 Corporate respondents represent a wide range of industries. Exhibit 4 breaks down the corporate respondents by industry using Standard Industrial Classification (SIC) codes. The Exhibit shows that the response pool is well-distributed across different industries. Manufacturing is the largest single industry segment (29%). No single SIC code within manufacturing dominates this category. Exhibit 4: Corporate Respondents by Industry Introduction, Definitions, 2015 Electronic Accounts Payable Benchmark Survey Results and Description of Sample 15

16 The sample composition is reflective of an emerging technology, with respondents reporting that they have been using EAP for (on average) three years and four months. Exhibit 5 breaks down the respondent base by the length of time that an EAP program has been in place. The Exhibit shows that 13% of respondent programs are less than one year old, 34% are between 1 and 2 years old, 24% are between 3 and 4 years old, and 29% are 5 or more years old. Exhibit 5: Age of EAP Program Connection to the 2012 Report Throughout this report, we will selectively make comparative references to a previous RPMG Research Corporation report--the 2012 Electronic Accounts Payable (EAP) Benchmark Survey Results. 2 The 2012 Results were obtained from a survey that targeted EAP users, but was not exclusive to EAP users. Customer Satisfaction with EAP Provider Relationship Customer satisfaction with Electronic Accounts Payable (EAP) is driven by the value they provide to the organization. Organizations may perceive value in a variety of different aspects of the EAP experience with their EAP provider. Four sections in the 2015 EAP Benchmark Survey addressed the customer s assessment of the importance of and their satisfaction with: (1) the economic elements of EAP use, (2) provider service and support of EAP, (3) reporting, and (4) data integration. The next five chapters identify EAP provider strengths to build upon and opportunities to make improvements to the EAP value proposition. 2 Copies of this report are available at Introduction, Definitions, 2015 Electronic Accounts Payable Benchmark Survey Results and Description of Sample 16

17 Introduction to the Analysis Twenty-five questions in the survey consisted of two parts: the first asking respondents about the importance of and the second asking about satisfaction with various EAP characteristics and EAP provider support services. Both importance and satisfaction are measured on a 7-point Likert-type scale, where 1=not important or very dissatisfied and 7=very important or very satisfied. A favorable gap (where satisfaction is greater than importance) may be interpreted as a strength of the EAP product or related service. By contrast, an unfavorable gap (where importance is greater than satisfaction) may call for further analysis of details, clarification with customers, and possibly, corrective action(s). Throughout this Report, we will recognize (with bold numbers) positive EAP provider performance satisfaction gaps when a or more difference exists in the importance-satisfaction gap. This would indicate that customers are more satisfied with EAP provider performance on the item under consideration, the item is of less importance to them, or both. We will also recognize negative EAP provider performance satisfaction gaps. A negative EAP provider performance satisfaction gap exists when there is a or more difference in the importance-satisfaction gap. This would indicate that customers are less satisfied with EAP provider performance on the item under consideration, the item is of greater importance to them, or both. The great value of the importance/satisfaction portion of the 2015 Survey is that it reveals strengths to exploit and areas in which improvement is needed. When the level of importance is high and the level of satisfaction is significantly lower (negative importance/satisfaction difference or gap), the resulting satisfaction dissonance should be addressed by redeploying resources to raise the level of satisfaction. However, the reader should be advised that not all gaps of equal size are of equal significance. For example, large gaps that relate to less important elements of EAP provider performance are a smaller business concern than large gaps relating to important aspects of EAP provider performance. Conclusion A broad spectrum of organizations is represented in the final sample for analyses of EAP use in both Corporate and Government and Not-for-Profit segments. Though most EAP programs are relatively new, the respondent pool includes a diverse range of experience with EAP. Finally, respondent use of different EAP models creates an opportunity to gain additional insight into the unique nature of this payment technology. Introduction, Definitions, 2015 Electronic Accounts Payable Benchmark Survey Results and Description of Sample 17

18 Chapter 2 Trends in Customer Satisfaction: Economics Importance of and Satisfaction with the Economic Relationship with the EAP Provider In this chapter, we focus on key responses related to the economic relationship respondents have with their provider in relation to the EAP product. Exhibit 6 shows current respondent ratings of the importance of and satisfaction with six economic factors associated with EAP in descending order of importance. As shown in the Exhibit, customer satisfaction on three of the six economic factors outweighs the perceived importance of those factors. The positive satisfaction gaps exist for three items of lesser importance, including foreign exchange fees (1.25), liability protection from employee misuse of EAP (0.31), and bank fees associated with EAP (0.04). A large negative satisfaction gap exists for rebates/incentives tied to EAP spending (-0.86) and a small negative satisfaction gap is reported for transaction costs (-0.16). Most notably, the overall economic relationship with EAP provider in relation to EAP has a small gap between importance and satisfaction (-0.13). Thus, we conclude that, overall, EAP users appear to be satisfied with the economic aspects of their EAP account. Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Economics 18

19 Exhibit 6: Importance of and Satisfaction with Economic Elements of EAP Use (where 1=not important or very dissatisfied and 7=very important or very satisfied) Importance Satisfaction Gap Economic Elements Rebates/incentives tied to EAP spending Overall economic relationship with EAP provider in relation to EAP Transaction costs Bank fees associated with EAP Liability protection from employee misuse of EAP Foreign exchange fees Satisfaction with the Economic Relationship over Time Exhibit 7 on the next page shows customer satisfaction ratings related to the four most important EAP economic items between the 2012 and 2015 EAP Benchmark Survey Results. The Exhibit shows a pattern of increased customer satisfaction for each item since Specifically, satisfaction increased for (a) rebates/incentives tied to EAP spending (from 5.40 in 2012 to 5.67 in 2015), (b) overall economic relationship with EAP provider in relation to EAP (from 5.39 in 2012 to 5.65 in 2015), (c) transactions costs (from 5.15 in 2012 to 5.37 in 2015), and (d) bank fees associated with EAP (from 5.16 in 2012 to 5.44 in 2015). In fact, an uptick in customer satisfaction is reported for all six economic variables, including two not shown in Exhibit 7. Liability protection from employee misuse of EAP went from 5.26 in 2012 to 5.57 in 2015 and foreign exchange fees went from 4.27 in 2012 to 4.38 in Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Economics 19

20 Exhibit 7: Satisfaction with Four Most Important Economic Elements of EAP, 2012 and 2015 Satisfaction with Economics and the Capture of Transactions Not every aspect of EAP provider activity will be associated with changes in customer behavior. To examine whether customer satisfaction with the overall economic relationship with the EAP provider affects EAP program performance, we divided respondents into two groups based on their level of satisfaction, to wit: (1) the Low satisfaction group which includes those with reported satisfaction at or below the median level of the sample, and (2) the High satisfaction group which includes those with reported satisfaction above the median satisfaction level of the sample. Exhibit 8 reports the percentage of transactions paid by EAP (broken down by dollar amounts) across the two levels of satisfaction with the overall economic relationship. The Exhibit indicates that organizations with higher satisfaction with the economic relationship with their EAP provider capture (on average) a higher percentage of (a) transactions of $2,500 or less (14% in the Low and 21% in the High satisfaction group), (b) transactions between $2,501 and $10,000 (15% in the Low and 23% in the High satisfaction group, and (c) transactions between $10,001 and $100,000 (13% in the Low and 21% in the High satisfaction group). Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Economics 20

21 Exhibit 8: Percentage of Transactions Paid with EAP, by Groups with Low and High Satisfaction with the Overall Economic Relationship with the EAP Provider The Primacy of Financial Incentives Exhibit 9 on the next page adds insight into the connection between rebates and other financial incentives and the perceived value of EAP. The Exhibit shows that if rebates were no longer offered, 11% of respondents would be likely and 12% very likely to continue EAP use, while another 29% are neutral about continued use. On the downside, 27% (21%) of respondents indicate that it would be unlikely ( very unlikely ) that their organization would continue use of EAP if the rebates were no longer offered. Thus, it appears that a predominant focus on rebates is causing some organizations to lose sight of other significant benefits that they acknowledge regarding EAP use (see Chapter 5 of the Main Report: Market Trends and Best Practice Program Choices ), including transactional cost savings related to invoice processing and payment, additional working capital float, payment security, and enhanced remittance details. Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Economics 21

22 Exhibit 9: Likelihood of Continued EAP Use if Rebates are No Longer Offered 29% 27% 21% 12% 11% Very likely Likely Neutral Unlikely Very unlikely Conclusion Overall, organizations appear to be satisfied with the economic aspects of the relationship with their EAP provider. Customers report increasing levels of satisfaction with the most important elements of the economic relationship, including rebates/incentives tied to EAP spending, the overall economic relationship with the EAP provider in relation to EAP, transaction costs, and bank fees associated with EAP. Further, we find that EAP-user satisfaction with the economic relationship with their EAP provider to be a meaningful driver of EAP program performance. While satisfaction with rebates/incentives tied to EAP spending has increased, not surprisingly, a negative gap still exists between the importance customers place on rebates/incentives and their satisfaction with those benefits. Further, the fixation of some EAP-using organizations with rebates and incentives is a concern inasmuch as it indicates a limited recognition of the range of benefits available from EAP payment. Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Economics 22

23 Chapter 3 Trends in Customer Satisfaction: Customer Service and Support Importance of and Satisfaction with Customer Service and Support In this chapter, we focus on the customer service and support provided by EAP providers to their EAP-using customers. Specifically, we examine the importance of and satisfaction with different elements of customer service, how satisfaction with key elements of customer service have changed over time, the level of satisfaction with and frequency of communications occurring between the EAP provider s Account Manager and the EAP-using organization, and the impact of overall satisfaction with customer service and support on EAP program performance. Exhibit 10 on the next page shows respondent ratings of the importance of and satisfaction with thirteen aspects of EAP customer service and support in descending order of importance. It is interesting to note that, along with rebates to promote EAP use (shown in Chapter 2), several customer service items are of high importance---including service and support in EAP implementation (6.18), assistance in getting suppliers to accept EAP payment (6.02), and quality of help from help desk (6.02). Negative satisfaction gaps exist for all but two items of customer service and support ( sponsorship of user conferences or other training programs and hours of help desk availability ). The Exhibit shows that the largest gaps between importance and satisfaction tend to be in the most important aspects of customer service and support. Thus, the largest gaps are associated with assistance in getting suppliers to accept EAP payment (-0.71), training materials and support (-0.56), quality of help from help desk (-0.54), and overall customer service and support (-0.53). Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Customer Service and Support 23

24 Exhibit 10: Importance of and Satisfaction with EAP Provider Customer Service and Support (where 1=not important or very dissatisfied and 7=very important or very satisfied) Importance Satisfaction Gap Customer Service and Support Elements Overall customer service and support Service and support in EAP implementation Assistance in getting suppliers to accept EAP payment Quality of help from help desk Training materials and support Friendliness and respect shown by EAP provider support personnel Average time elapsed for help desk to resolve a problem Handling of disputed transactions Knowledge of the organization's purchasing/payables software and business processes Assistance identifying best applications for EAP Hours of help desk availability Support in development of EAP spending reports Sponsorship of user conferences or other training programs Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Customer Service and Support 24

25 Satisfaction with EAP Provider Customer Service and Support over Time Notwithstanding the negative gaps between the importance of and satisfaction with most items of customer service and support, Exhibit 11 shows that satisfaction ratings related to the four most important items of EAP provider service and support improved between 2012 and Specifically, satisfaction increased for (a) overall customer service and support (from 5.41 in 2012 to 5.68 in 2015), (b) service and support in EAP implementation (from 5.39 in 2012 to 5.78 in 2015), (c) assistance in getting suppliers to accept EAP payment (from 4.96 in 2012 to 5.31 in 2015), and (d) quality of help from help desk (from 5.24 in 2012 to 5.48 in 2015). Exhibit 11: Satisfaction with Four Most Important Customer Service and Support Elements of EAP, 2012 and 2015 In fact, an uptick in customer satisfaction is reported from 2012 for all thirteen customer service and support variables, including nine not shown in Exhibit training materials and support (from 5.25 in 2012 to 5.38 in 2015), friendliness and respect shown by EAP provider support personnel (from 5.46 in 2012 to 5.91 in 2015), average time elapsed for help desk to resolve a problem (from 5.44 in 2012 to 5.46 in 2015), handling of disputed transactions (from 5.43 in 2012 to 5.60 in 2015), knowledge of the organization's purchasing/payables software and business processes (from 5.15 in 2012 to 5.32 in 2015), assistance identifying best applications for EAP (from 5.19 in 2012 to 5.25 in 2015), hours of help desk availability (from 5.27 in 2012 to 5.64 in 2015), support in development of EAP spending reports (from 5.02 in 2012 to 5.23 in 2015), and sponsorship of user conferences or other training programs (from 4.96 in 2012 to 5.06 in 2015). Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Customer Service and Support 25

26 Satisfaction with Customer Service and the Capture of Transactions To determine if satisfaction with the EAP provider s overall customer service and support affects EAP program performance, we divided respondents into two groups based on their level of satisfaction, to wit: (1) the Low satisfaction group which includes those with reported satisfaction at or below the median level of the sample, and (2) the High satisfaction group which includes those with reported satisfaction above the median level of the sample. Exhibit 12 shows the percentage of transactions paid by EAP (broken down by dollar amounts) across two levels of satisfaction with overall customer service and support. The Exhibit indicates that organizations with higher satisfaction with customer service and support capture (on average) a higher percentage of (a) transactions of $2,500 or less (15% in the Low and 19% in the High satisfaction group), (b) transactions between $2,501 and $10,000 (18% in the Low and 23% in the High satisfaction group), and (c) transactions between $10,001 and $100,000 (15% in the Low and 20% in the High satisfaction group). Exhibit 12: Percentage of Transactions Paid with EAP, by Groups with Low and High Satisfaction with Overall Customer Service and Support Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Customer Service and Support 26

27 Engagement with the Account Manager Exhibit 13 presents the respondents frequency of communication (phone calls, s, site visits, etc.) with their EAP provider s Account Manager. The Exhibit shows that the majority of respondents communicate with their Account Manager on a weekly or monthly basis (54%), 23% on a quarterly basis, 13% on a bi-annual or annual basis, and 10% on an as needed or other time frame. Exhibit 13: Frequency of Communication with EAP Provider s Account Manager Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Customer Service and Support 27

28 Satisfaction with the Account Manager Exhibit 14 reveals the respondents evaluation of a specific component of customer service--- the performance of the EAP provider s Account Manager. In most cases, Account Managers are the first and regular contact point with the customer and influence the customer s understanding and use of EAP. The Exhibit shows that 74% of respondents are very satisfied or satisfied with the performance of their Account Manager, which speaks well of industry hiring and training practices. Further, only 6% are dissatisfied or very dissatisfied with their EAP provider s Account Manager. Exhibit 14: Satisfaction with the Performance of the EAP Provider s Account Manager Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Customer Service and Support 28

29 Satisfaction with the Account Manager and Contact Frequency Exhibit 15 presents the association between the contact frequency with the EAP provider s Account Manager and the EAP-using organization s satisfaction with the performance of the Account Manager. The Exhibit shows that satisfaction with the performance of the Account Manager rises with increased frequency of interaction with the Account Manager. Thus, 46% of organizations that communicate weekly or monthly with their Account Manager are very satisfied with the performance of their Account Manager, but only 25% (22%) of organizations that communicate quarterly (annually, bi-annually, or other) express a similarly high level of satisfaction. Exhibit 15: Contact Frequency and Satisfaction with Account Manager Performance Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Customer Service and Support 29

30 Satisfaction with the Account Manager and Overall Satisfaction with Key Attributes of EAP Exhibit 16 connects satisfaction with the performance of the EAP provider s Account Manager with the respondent s overall satisfaction with (a) the economic relationship with the EAP provider, (b) customer service and support, (c) the reporting package, and (d) integration of EAP data with organizational information systems. The Exhibit reveals that the overall level of customer satisfaction with EAP economics, service and support, reporting, and integration is highest among respondents that are satisfied or very satisfied with their Account Manager. There are at least a few ways to interpret this relationship. One way is to infer that a customer s satisfaction with the EAP provider s basket of goods and services is strongly influenced by the relationship that exists with the Account Manager. An alternative interpretation would be to adjudge that satisfaction with the Account Manager is derived from the quality of goods and services delivered by the EAP provider. A third interpretation would be that EAP providers that offer a strong suite of product and services are also more likely to have excellent Account Manager training and evaluation processes, from which flows better Account Manager service to the customer. Sufficient it is to state that there is a significant association between satisfaction with the EAP provider s product value proposition and the Account Manager. Exhibit 16: Satisfaction with Account Manager Performance and Overall Satisfaction with the Economic Relationship, Customer Service and Support, Reporting, and Integration of EAP Data Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Customer Service and Support 30

31 Conclusion Respondents consider many aspects of customer service and support important to the overall EAP value proposition. At present, negative satisfaction gaps exist for the vast majority of customer service items, with the largest gaps between importance and satisfaction attached to the most important aspects of customer service and support. Notwithstanding the negative gaps, it is important to note that customers report increasing levels of satisfaction (compared to 2012) with all aspects of customer service and support related to EAP, including the four most important aspects of customer service and support. The majority of respondents communicate with their EAP provider s Account Manager on a weekly or monthly basis. Seventy-four percent of respondents are satisfied or very satisfied with the performance of their Account Manager, which speaks well of the EAP provider s hiring and training practices. Customer satisfaction with the performance of the Account Manager rises with increased frequency of communications with the manager. In particular, 46% of organizations that communicate weekly or monthly with their Account Manager are very satisfied with the performance of their Account Manager, while only 25% (22%) of organizations that communicate quarterly (annually, bi-annually, or other) express a similarly high level of satisfaction. Finally, this chapter provides evidence that satisfaction with customer service and support translates into more productive EAP programs. Organizations with higher satisfaction with customer service and support pay a higher percentage of under $2,500, $2,501 to $10,000, and $10,001 to $100,000 transactions with EAP. Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Customer Service and Support 31

32 Chapter 4 Trends in Customer Satisfaction: Data Integration and Reporting Importance of and Satisfaction with Data Integration Certain attributes that might be considered routine or technical in nature---such as data integration, data reconciliation, and reporting--are nevertheless very important to the daily operations and benefit of Electronic Accounts Payable (EAP). This chapter focuses on the importance of and customer satisfaction with EAP data integration, the ability to reconcile EAP spending to internal spending records, and the overall EAP reporting package. As noted in the Main Report of the 2015 EAP Benchmark Survey Results, the seamless electronic transfer of transaction-related data between the EAP provider and the organizational information system (without manual intervention to correct, delete, or add information) is a notable goal which the majority of respondents report is very important (30%) or important (30%) to the growth of EAP spending. 3 3 See Exhibit 79 of the Main Report. Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Data Integration and Reporting 32

33 Exhibit 17 shows respondent ratings of the importance of and satisfaction with four data integration factors in descending order of importance. Negative satisfaction gaps exist in the ability to integrate EAP data into resource planning, general ledger, Accounts Payable, or other internal information systems (-0.52) and in the overall integration of EAP data with organizational information systems (-0.34). Significant positive gaps exist in the ability to consolidate EAP spending from multiple global sites into one single report (1.50) and the ability to consolidate EAP spending from multiple North American sites into one single report (1.23). Exhibit 17: Importance of and Satisfaction with Elements of EAP Data Integration Importance Satisfaction Gap Data Integration Elements Ability to integrate EAP data into resource planning, general ledger, Accounts Payable, or other internal information systems Overall integration of EAP data with organizational information systems Ability to consolidate EAP spending from multiple North American sites into one single report Ability to consolidate EAP spending from multiple global sites into one single report Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Data Integration and Reporting 33

34 Satisfaction with Data Integration over Time Exhibit 18 illustrates satisfaction over time with respect to aspects of data integration. The Exhibit shows that customer satisfaction has increased in all categories of data integration since 2012, and notably so with respect to the most important aspects of data integration. Specifically, satisfaction increased notably for the (a) ability to integrate EAP data into resource planning, general ledger, Accounts Payable, or other internal information systems (from 5.13 in 2012 to 5.57 in 2015), and (b) overall integration of EAP data with organizational information systems (from 5.16 in 2012 to 5.48 in 2015), but only modestly for the (c) ability to consolidate EAP spending from multiple North American sites into one single report (from 4.79 in 2012 to 4.97 in 2015), and (d) ability to consolidate EAP spending from multiple global sites into one single report (from 4.57 in 2012 to 4.58 in 2015). Exhibit 18: Satisfaction with Elements of EAP Data Integration, 2012 and 2015 Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Data Integration and Reporting 34

35 Importance of and Satisfaction with Ability to Reconcile and Reporting As noted in the Main Report, 32% of respondents report complete auto-reconciliation of EAP payments to internal records and 26% report that they manually reconcile a small (less than 10%) percentage of their transactions. But, for a variety of reasons (e.g., vendor charges a different price than anticipated or refunds returned goods to the card number), a minority of respondents have yet to automate the reconciliation process. Further, the EAP provider s reporting package is an important tool to help the organization evaluate and analyze EAP payment activity as well as provide the transparency critical for management of payment activity. Exhibit 19 presents respondent ratings of the importance of and satisfaction both with the ability to reconcile EAP spending to internal records and the overall reporting package. The Exhibit reveals that significant negative satisfaction gaps exist for both the ability to reconcile EAP spending to internal spending records (-0.73), and the overall EAP reporting package (-0.67). Exhibit 19: Importance of and Satisfaction with Elements of EAP Reporting Importance Satisfaction Gap Reporting Elements Ability to reconcile EAP spending to internal spending records Overall EAP reporting package Satisfaction with Reporting over Time Customer satisfaction has increased for the overall EAP reporting package, rising from 5.23 in our 2012 survey response to 5.65 in Comparative historical satisfaction data is not available for the ability to reconcile EAP spending to internal spending records. Conclusion Most respondents consider the integration, reconciliation, and reporting of transaction-related data to be highly important aspects of the EAP program. At present, negative customer satisfaction gaps exist in the ability to integrate EAP data into resource planning, general ledger, Accounts Payable, or other internal information systems and in the overall integration of EAP data with organizational information systems. However, it is important to note that, in comparison to 2012 data, customers report increasing levels of satisfaction with data integration and reporting of EAP data. Trends in Customer Satisfaction: 2015 Electronic Accounts Payable Benchmark Survey Results Data Integration and Reporting 35

36 Chapter 5 Customer Satisfaction and EAP Program Performance Customer satisfaction with their EAP provider is important to the success of EAP programs. As shown in previous chapters, factors driving customer satisfaction span across areas of economics, service and support, data integration, reconciliation, and reporting. In this and the next chapter, we analyze the connection between customer satisfaction with all aspects of the EAP provider value proposition and its impact on EAP program performance and other organizational choices, including the intent to switch EAP providers. Customer Satisfaction and 2015 Electronic Accounts Payable Benchmark Survey Results EAP Program Performance 36

37 Summarizing Items by Importance and Satisfaction Gaps Of the twenty-five two-part (importance and satisfaction) survey questions related to economics, customer service and support, data integration, and reporting discussed previously, Exhibit 20(a) summarizes the ten most important items. The Exhibit shows that the most important aspects of an EAP program include (1) rebates/incentives tied to EAP spending, (2) the ability to reconcile EAP spending to internal spending records, (3) the overall EAP reporting package, (4) overall customer service and support, and (5) service and support in EAP implementation. Exhibit 20(a): Importance of and Satisfaction with the Ten Most Important EAP Provider Items Importance Satisfaction Gap Rebates/incentives tied to EAP spending Ability to reconcile EAP spending to internal spending records Overall EAP reporting package Overall customer service and support Service and support in EAP implementation Ability to integrate EAP data into resource planning, general ledger, Accounts Payable, or other internal information systems Assistance in getting suppliers to accept EAP payment Quality of help from help desk Training materials and support Friendliness and respect shown by EAP provider support personnel Customer Satisfaction and 2015 Electronic Accounts Payable Benchmark Survey Results EAP Program Performance 37

38 Exhibit 20(b) summarizes the ten items with the largest difference between customer ratings of importance and satisfaction. The Exhibit shows that the largest negative satisfaction gaps are associated with (a) rebates/incentives tied to EAP spending (-0.86), (b) the ability to reconcile EAP spending to internal spending records (-0.73), (c) assistance in getting suppliers to accept EAP payment (-0.71), (d) overall EAP reporting package (-0.67), and (e) training materials and support (-0.56). Of greatest need for attention are the six items of high importance (6.0 or higher) that have large negative satisfaction gaps, including (a) rebates/incentives tied to EAP spending (-0.86), (b) the ability to reconcile EAP spending to internal spending records (-0.73), (c) assistance in getting suppliers to accept EAP payment (-0.71), (d) the overall EAP reporting package (-0.67), (e) the quality of help from the help desk (-0.54), and (f) overall customer service and support (-0.53). The largest positive gaps relate to items of lower importance to customers. Exhibit 20(b): Ten Largest Gaps between Importance and Satisfaction Ratings Importance Satisfaction Gap Ability to consolidate EAP spending from multiple global sites into one single report Foreign exchange fees Ability to consolidate EAP spending from multiple North American sites into one single report Rebates/incentives tied to EAP spending Ability to reconcile EAP spending to internal spending records Assistance in getting suppliers to accept EAP payment Overall EAP reporting package Training materials and support Quality of help from help desk Overall customer service and support It s illustrative to note that seven of the ten items of high importance also have large negative satisfaction gaps, including rebates/incentives tied to EAP spending, the ability to reconcile EAP spending to internal spending records, assistance in getting suppliers to accept EAP payment, the overall EAP reporting package, and the quality of help from the help desk. Customer Satisfaction and 2015 Electronic Accounts Payable Benchmark Survey Results EAP Program Performance 38

39 Impact of Satisfaction on EAP Program Performance To determine whether a relationship exists between customer satisfaction and EAP program performance, we summed the satisfaction scores from the twenty-five survey items asked about economics, service and support, data integration and reporting. We then placed respondents whose summed satisfaction score was at or above the median in the High Satisfaction group and all others in the Low Satisfaction group. We removed a small set of respondents to balance the respondent groups in terms of size (as measured by headcount) and to facilitate comparisons of key EAP program performance measures between groups. Exhibit 21 shows that customer satisfaction with EAP provider performance is important to the development of EAP program parameters and program success. In comparison to the Low Satisfaction group, High Satisfaction respondents report: 44% higher average monthly spending ($2.6 million versus $1.8 million), 35% higher spending per employee ($334 versus $247), 25% higher spending per transaction ($4,692 versus $3,749), and 64% higher capture of transactions $2,500 or less, 31% higher capture of transactions between $2,501 and $10,000, 73% higher capture of transactions between $10,001 and $100,000, and a 67% higher capture of transactions between $100,001 and $1 million. Exhibit 21: EAP Program Performance Measures, by Similar-Size Respondents with High (Low) Overall Satisfaction with Their EAP Provider High Satisfaction Low Satisfaction Percent Difference Organizational Statistics Number of employees 7,665 7,206 6% Age of program (in years) % EAP Spending Metrics Average monthly EAP spending $2,558,101 $1,776,650 44% Median monthly EAP spending $703,794 $400,316 76% Monthly spending per employee $334 $247 35% Spending per transaction $4,692 $3,749 25% Percent of Transactions Paid with EAP Transactions of $2,500 or less 18% 11% 64% Transactions between $2,501 and $10,000 21% 16% 31% Transactions between $10,001 and $100,000 19% 11% 73% Transactions between $100,001 and $1 Million 10% 6% 67% Customer Satisfaction and 2015 Electronic Accounts Payable Benchmark Survey Results EAP Program Performance 39

40 Organizational Context of Customer Satisfaction Exhibit 22 shows that organizations in the High Satisfaction group (as defined previously in this chapter) have a few unique characteristics that may contribute to their satisfaction level. The Exhibit shows that, in comparison to Low Satisfaction organizations, the High Satisfaction group is more likely to (a) use the same bank for EAP, check, ACH, wire transfer, and other payment needs, (b) support administrator attendance at EAP user conferences, and (c) have an ongoing method of communicating information about the EAP program to the organization. These differences may drive increased use of EAP, which generates more benefits to the organization and thus higher overall customer satisfaction. Exhibit 22: Organizational Context of EAP Program, by Similar-Size Respondents with High (Low) Overall Satisfaction with Their EAP Provider High Satisfaction Low Satisfaction 64% 71% 61% 44% 30% Organization uses the same bank for EAP, check, ACH, wire transfer, and other payment needs Organization supports administrator attendance at EAP user conferences 18% Organization has an ongoing method of communicating information about the EAP program to the organization Customer Satisfaction and 2015 Electronic Accounts Payable Benchmark Survey Results EAP Program Performance 40

41 Customer Satisfaction and the Account Manager The EAP provider s Account Manager plays an important role in the deployment of EAP and overall customer satisfaction. Exhibit 23 shows that organizations in the High Satisfaction group (as defined previously in this chapter) have a more positive and active relationship with their Account Manager. Specifically, the Exhibit shows that, in comparison to Low Satisfaction organizations, the High Satisfaction group is more likely to communicate with the Account Manager on at least a monthly basis (67% versus 43%) and report being satisfied or very satisfied with the performance of their Account Manager (84% versus 68%). As with Exhibit 16 (which showed that satisfaction with the performance of the Account Manager is associated with overall satisfaction with EAP economics, customer support and service, reporting, and data integration), the rightmost section of Exhibit 23 reflects the connection between the performance of the Account Manager and customer satisfaction (this time measured by a combination of all 25 aspects of EAP value, not just overall metrics in four categories). As with Exhibit 16, one cannot definitively assert whether overall customer satisfaction is a cause or a product of satisfaction with the Account Manager. Suffice it to say that there is an association between satisfaction with the combined aspects of EAP provider value and customer satisfaction with the performance of the Account Manager. Exhibit 23: EAP Account Manager Performance Measures, by Similar-Size Respondents with High (Low) Overall Satisfaction with Their EAP Provider High Satisfaction Low Satisfaction 84% 67% 68% 43% Organization communicates with provider s Account Manager at least on a monthly basis Organization is "satisfied" or "very satisfied" with performance of Account Manager Customer Satisfaction and 2015 Electronic Accounts Payable Benchmark Survey Results EAP Program Performance 41

42 Customer Satisfaction, Supplier Enlistment Effort, and Supplier Acceptance As noted in the Main Report ( Market Trends and Best Practice Program Choices ) of the 2015 Electronic Accounts Payable Benchmark Survey Results, supplier acceptance is an important component of EAP success. Exhibit 24 shows that the High Satisfaction group (as defined previously in this chapter) reports a higher average number of suppliers paid with EAP than the Low Satisfaction group (199 versus 173, respectively). Exhibit 24: Number of Suppliers Paid with EAP by Similar-Size Respondents with High (Low) Overall Satisfaction with Their EAP Provider Further, Exhibits 25(a) through 25(c) on the next page provides a series of insights into organizational satisfaction with EAP related to aspects of supplier acceptance. Specifically, Internal evaluation. Exhibit 25(a) shows responses to the query, Overall, how successful has your organization s effort been to enlist suppliers to accept EAP payment. The Exhibit shows that 54% or the High Satisfaction group (but only 30% of the Low Satisfaction group) deems their efforts as successful or very successful. Customer Satisfaction and 2015 Electronic Accounts Payable Benchmark Survey Results EAP Program Performance 42

43 Evaluation of provider effort. Exhibit 25(b) reports responses to the query, Overall, how satisfied is your organization with its EAP provider s effort to increase supplier acceptance of EAP? The Exhibit reveals that 73% or the High Satisfaction (but only 39% of the Low Satisfaction) group are satisfied or very satisfied with their provider s efforts to increase supplier acceptance. Further, 15% of the Low Satisfaction (but only 3% of the High Satisfaction) group are dissatisfied or very dissatisfied with their provider s efforts to increase supplier acceptance. 4 Overall level of acceptance. Exhibit 25(c) reports responses to the query, Overall, how satisfied is your organization with the level of supplier acceptance for EAP payment? The Exhibit reveals that 31% or the High Satisfaction (but only 18% of Low Satisfaction) group are satisfied or very satisfied with the overall level of supplier acceptance of EAP. Taken together, it appears that the customers satisfaction with their EAP provider is positively influenced by the success of their own and their EAP provider s efforts at generating supplier acceptance of EAP. Exhibit 25(a)(b)(c): Evaluation of the Organizational Effort to Enlist Suppliers, Evaluation of Provider Effort to Increase Supplier Acceptance, and Overall Satisfaction with the Level of Supplier Acceptance, by Similar-Size Respondents with High (Low) Overall Satisfaction with Their EAP Provider High Satisfaction Low Satisfaction Exhibit 25(a): Overall Success of Organizational Effort to Enlist Suppliers to Accept EAP Payment Exhibit 25(b): Satisfaction with EAP Provider s Effort to Increase Supplier Acceptance 73% Exhibit 25(c): Overall Satisfaction with Level of Supplier Acceptance 54% 30% 54% 32% 16% 14% 39% 47% 24% 15% 3% 31% 18% 48% 42% 34% 27% Successful or very successful Neutral Unsuccessful or very unsuccessful Satisfied Successful or or very very satisfied successful Neutral Unsatisfied Unsuccessful or or very very unsatisfied unsuccessful Successful Satisfied or or very successful satisfied Neutral Unsuccessful Unsatisfied or very unsuccessful unsatisfied 4 Among the 25 importance-satisfaction questions (shown in Exhibits 6, 10, 17, and 19), one question was asked which is of a similar nature to Exhibit 25(b), to wit: rate the importance of and satisfaction with Assistance in getting suppliers to accept EAP payment. We do not believe that Exhibits 25(a), (b) or (c) are confounded by one question of 25 by which we divide groups into High and Low Satisfaction. Customer Satisfaction and 2015 Electronic Accounts Payable Benchmark Survey Results EAP Program Performance 43

44 Success with EAP Technology and Customer Satisfaction As noted in the Main Report ( Market Trends and Best Practice Program Choices ) of the 2015 Electronic Accounts Payable Benchmark Survey Results, the majority of respondents report that data integration is important or very important to the growth of EAP spending. Exhibit 26 shows that organizations in the High Satisfaction group (as defined previously in this chapter) are more likely to report (a) automated or minimal manual reconciliations of transaction activity (67% versus 51% for the Low Satisfaction group), (b) routine timely reconciliations without problems (66% versus 55% for the Low Satisfaction group), (c) significant or complete integration of EAP spending with the organizational accounting information/erp system (67% versus 51% for the Low Satisfaction group), and (d) that EAP integration has been important or very important to the growth of EAP spending at their organization. Exhibit 26: Progress with EAP Technology, by Similar-Size Respondents with High (Low) Overall Satisfaction with Their EAP Provider High Satisfaction Low Satisfaction 67% 66% 67% 67% 51% 55% 51% 43% Organization reports automated or low manual reconciliation of transaction Organization reports a timely reconciliation occurs routinely and is no problem Organization describes EAP data as significantly or completely integrated with accounting information/erp system Organization reports that EAP integration has been "important" or "very important" to the growth of EAP spending at their organization Customer Satisfaction and 2015 Electronic Accounts Payable Benchmark Survey Results EAP Program Performance 44

45 Conclusion This chapter explores the connection between customer satisfaction with all aspects of the EAP value proposition and its impact on EAP program performance. Overall, the five most important aspects of EAP are rebates/incentives tied to EAP spending, the ability to reconcile EAP spending to internal spending records, the overall EAP reporting package, overall customer service and support, and service and support in EAP implementation. The five largest negative satisfaction gaps are for rebates/incentives tied to EAP spending, the ability to reconcile EAP spending to internal spending records, assistance in getting suppliers to accept EAP payment, overall EAP reporting package, and training materials and support. The largest positive gaps relate to items of lower importance to respondents. Analysis of survey responses indicates that organizations with higher overall levels of satisfaction with EAP economics, service and support, data integration, and reporting have higher average monthly EAP spending and capture a higher percentage of transactions on the EAP platform (at all dollar levels). Further, higher overall customer satisfaction is associated with more frequent communications and greater satisfaction with the EAP provider s Account Manager. Highly satisfied EAP-using organizations pay a higher number of suppliers with EAP and are more likely to be satisfied or very satisfied with the overall level of supplier acceptance of EAP payment. Organizations with higher overall customer satisfaction are more likely to report (a) automated and trouble-free reconciliations of EAP transaction activity, and (b) that EAP account spending is significantly or completely integrated with the organizational accounting information/erp system. Customer Satisfaction and 2015 Electronic Accounts Payable Benchmark Survey Results EAP Program Performance 45

46 Chapter 6 Customer Satisfaction and Switching Customer Satisfaction and Intent to Switch EAP Providers Across the entire response to the 2015 EAP Benchmark Survey, 6% indicated that their organization is currently considering switching EAP providers. 5 By comparison, we reported that 10% of purchasing card-using organizations were considering switching card providers in Exhibit 27 shows that organizations with higher overall customer satisfaction with their EAP provider (as measured in the previous chapter) are significantly less likely to be considering switching EAP providers than their Low Satisfaction counterparts (2% versus 11%, respectively). Customer switching adds to the EAP provider s cost burden (since obtaining customers is a costly endeavor) and drives changeover costs for the customer. Exhibit 27: Intent to Switch EAP Providers, by Similar-Size Respondents with High (Low) Satisfaction with Their Provider 5 The percentage considering switching was relatively low across all groups, including Fortune 500-Size (4%), Large (4%) and Middle (5%) Market Corporations, and Government and Not-for-Profit Organizations (7%). Customer Satisfaction 2015 Electronic Accounts Payable Benchmark Survey Results and Switching 46

47 Rationale for Switching Exhibit 28 reports the average importance assigned to the different reasons for switching given by respondents that are currently considering switching EAP providers. Across all respondents, the most important reason for switching is the desire for greater revenue sharing in rebates (6.50 out of 7, where 1=not important and 7=very important). Other important reasons for considering switching EAP providers include the desire for benefits from consolidating all banking relationships to one financial institution (5.25), better service and support (4.88), better EAP spend reporting capabilities (4.63), and because they are near or at the end of current contract term with provider (4.13). Exhibit 28: Importance of Reasons for Considering Switching EAP Provider (where 1=not important; 7=very important) Customer Satisfaction 2015 Electronic Accounts Payable Benchmark Survey Results and Switching 47

48 Contact Frequency and Intent to Switch Providers The EAP provider s Account Manager plays a key role as a liaison between the provider and the organization and is an important component of the customer s experience. Exhibit 29 reports the percent of organizations considering switching EAP providers by the frequency with which the organization communicates (via phone call, site visit, , etc.) with the provider s Account Manager. The Exhibit shows that the percentage considering switching providers is notably lower among organizations that communicate with their Account Manager on a weekly (3%) or monthly (4%) basis, but elevates for organizations that communicate on a quarterly (6%) or biannual, annual, or other (12%) basis. Exhibit 29: Percent of Organizations Considering Switching EAP Providers, by Frequency of Contact with Account Manager Customer Satisfaction 2015 Electronic Accounts Payable Benchmark Survey Results and Switching 48

49 Satisfaction with Account Manager and Intent to Switch Providers In a related vein, Exhibit 30 reports the percent of respondents considering switching EAP providers by their overall satisfaction with their Account Manager. The Exhibit shows that the percentage of respondents considering switching EAP providers is significantly lower among organization that are very satisfied (2%) or satisfied (5%) with their Account Manager. By contrast, the percentage of respondents considering switching EAP providers is much higher among organizations that are neutral (11%) or dissatisfied/very dissatisfied (22%) with their Account Manager. Exhibit 30: Percent Considering Switching Providers by Satisfaction with the Account Manager Conclusion Six percent of respondents to the 2015 EAP Benchmark Survey indicate that their organization is currently considering switching EAP providers. Organizations with higher overall customer satisfaction are significantly less likely to be considering switching EAP providers. Among organizations currently consider switching EAP providers, the more important reasons include the desire for greater revenue sharing in rebates, a perceived benefit from consolidating all banking relationships to one financial institution, and the desire for better service, support and spend reporting capabilities. The percentage of organizations considering switching EAP providers is notably lower among organizations that communicate with their Account Manager on a weekly or monthly basis. Further, the percentage considering switching EAP providers is significantly lower among organizations that are satisfied with their Account Manager. Customer Satisfaction 2015 Electronic Accounts Payable Benchmark Survey Results and Switching 49

50 Chapter 7 EAP Acceptance by EAP Users About 19% of respondents to the 2015 EAP Benchmark Survey both used EAP and accepted payment by EAP. Of this group, we inquired of a few key issues, to wit: what are their reasons for accepting or not accepting EAP and what are their plans regarding EAP going forward? Benefits of Acceptance of EAP Exhibit 31 shows that there is a three-way tie for the top benefit of EAP acceptance, including guaranteed payment (whereas with checks, for example, funds must clear before there is certainty of receipt), improved cash flow, and faster receipt of payment. Each of these items received a 4.34 rating of importance on a 5-point scale (where 1=unimportant and 5=very important). The fourth-most important benefit is ease of process, which is an aspect of EAP that doesn t get as much attention as it perhaps deserves in the market. The simplified process of transmitting payment along with a rich set of remittance details facilitates payment receipt processing for sellers. The fifth-most important benefit of EAP to sellers---closely related to the ease of process ---is lower AR processing costs (3.59). Other items, including, increased sales or competitive advantage, to be classified as a preferred vendor, and reduction or reassignment of AR staff did not rate as highly important benefits of EAP acceptance Electronic Accounts Payable Benchmark Survey Results EAP Acceptance by EAP Users 50

51 Exhibit 31: Importance of Benefits from EAP Acceptance (where 1=unimportant and 5=very important) Michael A satisfied customer is the best business strategy of all. LaBoeuf 2015 Electronic Accounts Payable Benchmark Survey Results EAP Acceptance by EAP Users 51