Cashflow is essential to any organisation’s success. Here are some things to consider when deciding to offer a payment plan option:
1. Frequency pays off so give options
The simple psychology of the subscription model equation is that a customer feels more comfortable with paying a small amount than they do a large amount. The more frequent the payment, the smaller the amount will be.
Statistics from payment solutions provider Debitsuccess show that weekly payments are the most popular with customers, and also the least likely to default. Clearly, paying a smaller amount – be it weekly or fortnightly – is more achievable, so make sure you have these options available.
2. Flexible timing is key – fit in with your customers’ lifestyles
Flexibility around timing of payments also goes a long way toward making customers feel comfortable about paying for a subscription service.
More sampling of statistics show that Thursdays, Fridays and Mondays are the most preferred days for customers to pay. So, if your business can be set up for payments on the day of the week that a member chooses, you’ll be able to attract more members. Ensuring people can pay when they want and how they want will build better relationships and help keep them coming back to pay you again and again.
3. Reversals are inevitable so don’t stress if you get a few
In data tracked from a year’s worth of subscription billing, it is expected that a small percentage of recurring payments will bounce initially for various reasons, such as insufficient funds. That’s no reason to avoid such instalment payment plans – the important thing is having a method for following this up.
4. Avoid credit control at your peril
Not having a robust process in place to manage credit control will mean less cash flow now, and ultimately more expense in administration costs. So it’s critical to have clear processes in place to manage credit control.
Outsourcing your billing to a third party provider can easily solve this issue, and means that your organisation can focus on maintaining a great service, while your billing company manages the task of dealing with the reversals.
5. Ensure you’re secure
As with a number of industries, data security is integral to our business. Being secure and compliant with all industry regulations gives people peace of mind.
Debitsuccess is an externally audited Level 1 compliant company under the Payment Card Industry Data Security Standard (PCI DSS) – so has the policies, procedures, physical structures and technology to ensure data and credit card information is protected.
6. Save time and money
Following up on missed payments can be a huge administrative burden. And what if someone wants to change their payment schedule? Needs to advise a new address? Or has an account related query? All these aspects of managing payment plans take time. That’s why it may be appropriate to outsource a payment solution to save time and administration costs so you can focus on your business.
7. Options, options, options
Technology allows a diverse range of options for your customers to pay. It’s all about making it easy for people and maximising collections.
8. Increase retention
It’s simple – once a customer has an established form of payment that they have to re-establish if they shift to a competitor, they’re less likely to move. Payment plans increase retention due to their reliability, ease of use and security guarantees.
9. Working with others
Most businesses have existing business management software and, to make life easier, it’s important these systems can talk to each other. Application program interface (API) integration enables tools, products and applications to work together, providing customers with greater options and scope.
10. Consistent cashflow
A steady and reliable cashflow is vital to any business. Relying on large one-off payments could make your business vulnerable should these slow down for whatever reason. With an effective payment plan, businesses can rest assured that you have regular and reliable cashflow, putting an end to chasing payments and late fees.
Helping you to help your customers
Having a recurring payment solutions provider on board can help businesses to help their customers. It means greater flexibility, consistent cashflow and a full credit control system, saving time and money so organisations can focus on what’s really important – your customers and exceptional service.