Every service-based business knows that sometimes customers miss payments. It happens to everyone. But, how your business prepares for missed payments can drastically impact how quickly you get paid. More importantly, it can impact how much time your team has to spend recovering these payments.
If you don’t have the right tools and processes in place, delinquent or missed payments can bog down your operations.
When admins are forced to stop what they’re doing to track down customers with overdue accounts, other critical tasks have to remain on hold. (Not to mention, nobody enjoys having awkward conversations with customers who failed to pay on time.)
However, with the right tools you can drastically decrease the number of missed payments you experience and get paid faster. This means decreasing those awkward conversations and keeping your team focused on serving and growing your membership.
What are these tools and how do you get them?
Read on to find out.
1) Recurring Monthly Payments
Many service-based businesses have made the switch from lump-sum payments to recurring monthly payments based on its convenience.
From a customer’s perspective, it’s more convenient to make small monthly payments rather than save for a large lump-sum.
For businesses, recurring monthly payments mean predictable and dependable income. This means it’s easier for your club to forecast, budget and plan for expenses.
Furthermore, monthly recurring payments also protect your business from losses.
If a customer fails to make a monthly payment you can easily pause their account and restrict their access until payment is received. If the customer fails to rectify their delinquent payment, it’s easy to find a new customer to take-on a small monthly payment rather than a lump-sum.
However, the good news is most customers will simply register once and keep paying your business every month for several years as they progress through your programming. This means no more seasonal registration. Instead, registration is always open and new customers can join whenever a spot becomes available.
Recurring monthly payments require less time selling
In most cases, it’s easier to sell a small monthly payment than one large lump sum. That’s because when customers pay small monthly sums, your fees won’t force them to stop and re-evaluate their purchase. But, if a customer has to pay large lump-sums every time they roll over to a new season, they may be forced to pause and reconsider your fees and how that lump-sum works with their budget.
In these cases, you may need to field questions about the upcoming season, or you may need to proactively engage customers to sell and excite them about what’s coming next.
While it may not be difficult to ‘sell’ to your existing customers it does take time. And that’s time that could be better spent growing your business by proactively engaging brand-new customers. Or, it’s time that could be used to continue improving your programs, facilities and the other parts of your business to best serve your existing members.
2) Installment Payments
If your business isn’t ready to transition to monthly payments, consider installments. Installment payments allow you to divide large lump-sum payments into smaller chunks spread across a season or semester.
Similar to recurring monthly payments, offering installment payments makes your business more affordable. As a result, you’ll be able to increase the likelihood that your customers make payments on time.
Plus, with card on file, you and your customers don’t have to worry about manually timing their payments.
After the initial installment payment is made, a card on file system will take care of all scheduled payments without your admins needing to lift a finger.
Of course, these smaller installment payments don’t just make it easy for your existing customers to pay on time, it makes it easier for you to attract new customers too!
When your business offers more manageable installment payments, you can immediately reach a new audience. Suddenly youth who previously couldn’t participate can now find a place at your club, school or studio.
3) Automated Expired Credit Card Notifications
If your club transitions to either recurring monthly payments or installments, you’ll want to watch out for expired credit cards.
Credit cards only expire once every few years so it’s much less hassle than chasing down seasonal check or cash payments. However, it’s still something you’ll want to keep an eye on.
Luckily if you have software like Uplifter, your system will automatically notify customers if they have a credit card on file that’s going to expire before their next payment is due.
This automated expired credit card notification feature is just one more way to help your business get paid faster. And since it’s automated, your admin team doesn’t need to spend any time tracking it. They can just turn on the feature and move on to other tasks!
4) Automated Overdue Payment Reminders
If your business isn’t ready to transition to installments or monthly payments yet, there’s still a tool that can help you recover payments more quickly.
Using club, school or studio management software like Uplifter, it’s easy to turn on automated overdue payment reminders. These reminder emails are automatically sent as soon as an invoice becomes overdue.
This simple tool saves your admins from having to compose and send emails when an invoice slips into delinquency. If your admins still want to reach out with a phone call, they can be confident that the account owner has already received a notification with instructions on how to make their payment.
Of course, with software like Uplifter, customers can quickly make a payment directly through their family account. Your admin team doesn’t even need to get involved. It’s simple and fast.
5) Early-bird Discounts
One last way that you can get paid faster is to create urgency during registration. This can be accomplished by creating a sense of scarcity for your product or service.
Naturally, you don’t want to create scarcity by shrinking your class sizes. Instead, consider creating a limited time offer. Limited time offers motivate buyers to act fast before they miss out.
For service-based businesses, one of the best ways to do this is to offer early bird discounts for registration. This will motivate buyers to register sooner, allowing your business to secure revenue more quickly.
Remember that early bird discounts need to be well planned.
Consider how many discounted seats you’ll offer and how long you’ll offer your discount. Most importantly, calculate how much your business can discount your service while still making a sustainable profit.
Cumulative Improvements Can Make A Big Difference
When you have registration and club management software like Uplifter’s, you can easily combine these tools to enjoy amazing cumulative benefits.
For example, your club can launch an early-bird discount to secure revenue faster. Then, you can collect fees on a recurring monthly basis so it’s easy for customers to pay. With card-on-file, your club can be confident that payments will be made automatically.
However, in the rare case that a customer’s credit card is set to expire, an automated expired credit card notification can be sent to alert your customer. If they ever miss that notification, your overdue payment reminder will be triggered as soon as a payment is missed. With payment instructions included in your automated email, customers can quickly rectify their missed payment all on their own.
The cumulative effects of these automations help alleviate time-consuming tasks for your admin team and help ensure your business gets paid faster. It’s a win-win!
Have questions about any of these tools? Feel free to contact us. We’re always happy to help!
