6 unusual credit control tactics
Throughout our blog and resource centre you’ll find lots of credit control tactics and helpful tips to improve collection times.
Some of those tactics are more common than others, but sometimes the more unusual approaches yield better results.
With that in mind, we look at six unusual credit control tactics that some businesses use. Could your business learn anything from them?
Using Post-it notes
HMRC was once reported to have been sticking handwritten Post-it notes on letters to tax avoiders to ‘nudge’ them into paying up.
The handwritten notes, which contained messages such as: “Please give me a call, if you would like to discuss,” were designed as a nudge tactic to improve response rates.
Research shows that people are more likely to respond to messages that indicate extra effort and a personal touch, so handwritten messages such as this could be a good way to improve collection times.
Saying thank you
Saying thank you to a customer for paying on time might not seem like much of a tactic, especially when all customers should do it anyway.
But, at a time where late payment is a common occurrence, a simple “thanks” can drastically improve your collection efforts.
By thanking your customers, you show that their prompt payment is appreciated which can encourage them to continue paying your invoices on time going forwards.
If saying thank you for paying on time seems unnecessary, offering a reward for it probably sounds outrageous.
But offering early settlement discounts as an incentive can significantly improve payment times.
Whilst this may seem counterproductive, the cash flow benefits of receiving payment early cannot be ignored.
Even the smallest favour or hint of goodwill is enough to surprise customers and encourage prompt payment.
Suspending services may seem like an extreme step to take but it can prove extremely effective.
By refusing to trade with a particular customer, you’re forcing their hand to either clean up their act or go elsewhere.
Though this may seem counter-productive, you should ask yourself how valuable a customer they are if they don’t pay on time, and it can often be the nudge they need to improve their payment practices.
Focus on design
Lots of people get bogged down by the contents of their invoices, emails and letters. Whilst this is of course important, research suggests that it’s actually great design that elicits responses from people and gets them to take action.
Intuitive design keeps navigation simple and makes accessing the information customers need easy. This, in turn, makes the process of paying easier.
Therefore, investing some time and money into the design of your touchpoints can improve both user experience and collection times.
We often hear stories of businesses in the news who have gone to extreme lengths in order to collect payment.
From padlocking car wheels to a lamppost, to entering offices dressed as a “smelly tramp” and refusing to leave, some will do anything to get paid.
While these are definitely not tactics we would recommend, they are certainly unusual.
When you’re frustrated about a late payment, taking drastic measures may feel necessary. But these tactics can actually have a negative impact on your business.
Instead, the best tactic in most cases is mediation. Adopting a polite but insistent approach demonstrates your intolerance for late payment – but also how you value them as a customer.
In many cases, being empathetic to the customer’s situation can push your invoice to the top of their pile and foster better relationships in the future.
Do you use any of the credit control tactics? Or do you have more unusual credit control tactics to share? Let us know in the comments below.