As a business owner, one of the biggest headaches is non-payment and late payment for services and products supplied. All SMEs aim to maximise their cash flow, which means most will be pushing their payment terms to the limit. This means you need tight credit control and cash management procedures to limit the possibility of slow payers or perhaps even bad debt.
Strong cash flow directly involves offering flexibility to your customers in the way they can pay for goods or services. Customers nowadays more than ever expect multiple ways to be able to pay that is most convenient to them, whether that is via a virtual terminal, direct debit or perhaps accepting credit card payments. It is this expectation that has forced businesses to consider their long term strategy when selling online.
Direct debit payments are arguably the most secure way to maintain a stable and reliable cash flow, predominantly because they payment is automatically deducted from their bank account for a certain period of time. The plan after this initial period, is either to have convinced the customer of the invaluable nature of your service, or for your service to have become a regular habit and unnoticeable expense each month. To help maximise your own business in this fashion, here are some of the top tips for growing your customer base’s use for direct debit for small business.
1. Give A Specific Reason And Incentive
You need to provide a strong product and incentive for customers to sign up to recurring direct debit payments, and this is most commonly in the form of a slight saving on their total bill versus manual monthly payments. Also make sure to mention the ease and hassle free nature of direct debit providers, this will be attractive to customers who are extremely busy and don’t necessarily want to have to remember to send a payment each month. Stress that with a direct debit, everything is taken out of your hands and you don’t have to think about it.
2. Reach Out To Customers
Analyse your customer database to see who does and who doesn’t pay via direct debit. Once you have a list of non-direct debit customers, you can arrange a campaign to get the word across to them of its various benefits. Setting up an email campaign is usually the best way to do this, as well as a more general, less targeted campaign on your business’s various social media platforms.
3. Clear Website
Make it clear and obvious on your website that direct debit is the preferred option of payment for your business services. You can include a detailed write up on the process in your FAQ section that customers can go to when they need some clarification before committing. The easier to understand and more accessible you make your information, the more willing direct debit customers you are going to have.
4. Phone
If your business largely deals with a customer base that is perhaps older and generally less tech savvy, then it can make a difference to organise a phone campaign where your staff can talk one on one with people to try to get them to consider switching to direct debit. Older customers may be wary of submitting sensitive details into a computer, but might feel completely different about a real human to human conversation.
It’s important, however, never to have these phone calls turn into hassling, predatory conversations. You should always begin with a general explanation and then invite the customer to share their opinion. Never take the attitude of phoning to try to force a direct debit switch through.
5. Incentivise
Think about extra incentives that you can provide to your direct debit customers other than a slight discount. Depending on the nature of your business, this could be things like automatic free shipping, extra credits, early access … anything that fits with your service.
In a world that demands and appreciates convenience, a direct debit facility remains a thoroughly modern solution for small businesses. There are many direct debit companies, so its important that you do your research to make sure they are the best for your companies customer base and long term plans.