Chasing Customers for payment – the triple threat approach

When and how to employ a three-pronged approach to chasing customers for payment on account

What is the ‘triple threat?’

Apparently, in the world of film and theatre, a “triple threat” is someone that can sing, dance and act really well. Rather than being good in one area, they are excellent at all three. In the world of Accounts Receivable, I use the phrase ‘triple threat’ to the ways customers are chased for payment: by phone, email or letter.  Some of our customers use all three methods for each reminder when chasing late payments on certain accounts. Here’s why:

1. TRACKING: Certainty that they have got the message

Knowing the customer has received a message is not always guaranteed. Compare the two blue ticks on WhatsApp with the simple delivery confirmation with a normal SMS text: it is reassuring to know when your message has been seen. By increasing the number of routes to the customer, you can not only be more certain that one or more of your versions of the message will catch their attention, with some methods, you can also pinpoint exactly. Bosses and supervisors appreciate such certainty.

If you email a customer from your normal email account, you may not know whether they even received it (you may get a bounced email message, but what it if went into their ‘Junk’ folder automatically? With Corrivo, you get that certainty – you know that your message has been sent, delivered, read and even acted upon. By sending emailed links to a portal where letters are viewed securely online, you will get the most comprehensive tracking on customer activity. But you can send a link and a PDF attachment and have a postal copy delivered too if you wish.

 

2. ONE STEP, TWO HITS – reinforcing the message a day later

By sending a letter by post as well as by email (whether using PDF attachment or email link to a portal), you can more or less be sure that the email will be seen first, then the physical counterpart. The paper version reinforces the emailed version and gives the customer the signal that you really do mean business. Some of our customers use this ‘plus postal’ method in their first Dunning letter only as it is so effective at getting the message across. They find they usually receive either payment or some contact from the customer before the second Dunning letter is due.

 

3. BEST FOR REMINDERS, NOT INVOICES – Finding the most effective medium

What may be the best way to deliver an invoice may not be the best way to deliver a reminder message or chase late payment. This is particularly true for customers that receive invoices by EDI. EDI users rarely receive reminders letters through EDI – you need alternative contact details and each customer, and each contact, for that matter, has their own preferred medium – they may check emails assiduously but be slow to open postal mail.

Your phone calls may reach head office, but the call may fall flat at the IVR or switchboard controller when the contact is working from home. A three-pronged attack gives the customer a chance to respond in their preferred medium and give you insight into how best to contact them next time. Our customers find that receivables contact details have needed updating more than once yearly since the pandemic began.

 

4. FORCED REFRESH – ensuring you use freshest contact details

Let’s say your customer receives invoices by EDI and rarely pays late. This time, it is different. How likely is it that the contact details they gave you by phone, email or postal mail are up to date? People move on, and teams relocate. Since the pandemic, the ‘where’ aspect of postal reminders letters is particularly problematic.

Do your contacts ever show up at the postal address, and does anyone that is attending site forward mail quickly? Our research shows that there can be a time lag of, on average, five days before postal reminders reach the right recipient.

If postal addresses for letters are unreliable or garner slow responses on their own, emails and calls may be a better bet – and you should have more than one invoice contact per account. Emailed links to a letter that is viewable online can be more effective than simply sending an attachment. The advantage of this is that you will know not just when a message has been delivered but when accessed online or downloaded.

 

5. SECOND IMPRESSIONS – Making an impact

Here is the paradox: just because you know a customer has read an email or viewed a PDF, or even downloaded a reminders letter online from one of your branded portals, this does not guarantee that they take the message seriously. Many companies find, on review, that emails were ignored but that when paper was involved, the customer paid attention and acted.

 

6. DEMONSTRATING INTENTIONS – obtaining true certainty

Our customers find that emailed links or emailed PDFs alone are not great at getting results. When the supplier sends the reminder or dunning letter using BOTH an email with a PDF attachment AND a link to an online version of the letter – which sits alongside full account balance information, the results are better. They get more responses and faster response times – you are showing the customer that you are going to great lengths to reach them AND are offering a backup in case they delete an email. Use paper too, and the customer can hardly fail to get the message!

 

7. ALL GUNS BLAZING – When to go for the triple-threat

Consider this:

If AP and AR have an invisible fence between them, your contact details may be out of date. What if you have recently updated the primary invoice contact’s details but not the person(s) to whom reminders are sent?

We cover this in Corrivo by allowing you to specify multiple addressees or contacts for reminders communications. You can send the same reminders letter to the CFO as well as your AP contact if you wish. This may seem heavy-handed, but the flexibility is there in the system because, in reality, Ap teams often have a group email address, and when it comes to reminders, you may wish to know exactly who from the customer company has accessed your letters.

8. COMPLETE COVERAGE – multiple methods and multiple contacts

The most comprehensive and arguably heavy-handed approach to chasing customers is to use all three methods (in some cases, you can use four where the fax is a viable option) and also send the same reminders letter to multiple contacts.

There is so much more to our Collections module I could share with you. If you are interested in a quick tour or have any specific questions, please email or call me.

davidh@datainterconnect.co.uk