Payment is a universal connection between a merchant and a customer. This article is meant to explain how to maintain this connection on a positive level, what to do to ensure payments, and how to deal with late transactions.
Why is the checkout experience vital for a business?
It is important to understand that payment is the most frequent communication between a merchant and a customer. And if the meeting point is satisfying, a customer might become a regular one and spread the positive word regarding the product or service offered by a merchant. It works well the other way around too: the unsatisfying checkout experience would drag a customer away and even might damage the merchant’s reputation.
According to Gartner, via CMSWire, customer experience is valued more by clients than brand and price factors together, as it generates over two-thirds of customer loyalty. Epsilon also claims that 80% of customers are more likely to buy the product or service if merchants provide a personalized experience. 40% of consumers, says BCG, are willing to purchase more than they had planned if offered experiences are strongly personalized towards them. And 48% of consumers have abandoned the checkout space without buying as they had experienced poor personal treatment, claims Accenture.
Make checkout process pleasant
The checkout process itself is crucial. It directly affects the number of sales and the positive customer experience. In other words, a well-established checkout process brings up rising profit and a good reputation. But when it comes to setting up the checkout flow, there are multiple factors to consider.
Payment methods. Accepting as many payment methods as possible, considering your customer base, is the first step. Besides the usual credit and debit card payment, we recommend analyzing the audience and study the local popular payments for including other methods.
Transaction location. Transaction location refers to the virtual space where a customer makes payments. It can be on-site, so on the merchant’s website, or it can be redirected to another service for purchase collecting. Besides well-known payment services, customers usually have very little or no trust at all in the redirected checkout experience.
Design. Might be obvious, but nobody wants to spend time figuring out where the needed button is, and how to proceed to payment. The checkout design is a merchant’s main tool for selling and it must be in logical and simple order.
We have an article that explains step by step how electronic payment processing works: “The basics of online payment processing”.
If you need a merchant account and need more advice on how to make a checkout process more pleasant, Maxpay is here for you! You can open multiple merchant accounts that come with a dedicated account manager that will be helping you along the way.
Maxpay is PCI DSS compliant and has a risk team and Covery anti-fraud platform to monitor your business performance and protect you from fraud.
Ask for payments upfront
Paying upfront might seem to be a pure benefit for the merchant. And it is so. It is true that if a customer pays in advance the merchant can plan better and secure the profit along with the relationship. But there is also an advantage for the customer. Paying upfront ensures the scheduled delivery of the product or service.
Software Advice reports that 78% of customers claim that the customer care experience is way better if the support agent doesn’t sound like following the protocol or a script. And according to American Express, retained customers are ready to pay a 17% price premium if it brings top service experience.
Let’s see a list of merchants’ and customers’ benefits of asking for payment upfront.
|Advantages of the upfront payment|
|financial profit||security in delivery|
|better financial planning||on-time delivery|
|better tax planning||possibility to experience a personal customer care|
|an opportunity to deliver in-time and with better service||possibility to have personalized offers|
|possibility to offer the personalized approach||better financial planning|
|marketing and promotion benefits|
Clearly communicate the expectations
For a positive customer experience, both a merchant and a client must conclude a clear agreement regarding payment details and payment collection. This agreement should include dates, payment methods, information if the payment is direct or deposited, possible discounts and promotions, return and warranty policies, invoice related information. The document must be accessible anytime, it can be sent via email, post, or stay in the personal client’s space on the website, whichever is better.
Send polite follow-up emails
Follow-up emails in 2021 are something of an official confirmation that the payment had happened. Invoice information, delivery details, and other necessary points of the deal must be re-sent by email.
But when the payment is late or not processed till the end, there is no need to blame a customer. There are a hundred reasons that could interrupt the schedule. The email could be stuck in the spam folder, a customer could be out of the network for a while, the person in charge of payments could be unavailable for some reason.
To solve the situation, first of all, we recommend politely reminding a customer about collecting payments after a week or so. Immediate pressing would not help a merchant’s reputation, and could even terminate the payment event. And if there is no response after the first follow-up, it makes sense to try another channel of communication, such as phone, physical letter, social media, and so on.
Offer a personalized invoice schedule
When it comes to collecting late payments or accepting big amounts at once, we advise you to think of a personalized invoice schedule. Collecting all the late payments with one invoice can be quite stressful.
First of all, a customer might feel guilty for the delay, and so taking all the funds for all the previous payments is not the best option for a merchant that wants to maintain good relations. The better way is to propose to divide payments between acceptable periods. A customer would appreciate the approach, and a merchant would be able to set up the predicted income.
The same scheme works well with relevantly expensive charges. A merchant might offer a customer a divided scheduled payoff, along with other personalized bonuses.
Contact other people at the company
Collecting payments from companies and businesses requires a different approach than with individuals. The deal should be more established regarding all the payment details, schedules, and the contact person in charge of the payment delivery.
Often the payment is not performed due to the personal factor in the company. Such things as vacation, rotation of the position, and new personnel factors can affect the payment collection. The only thing that can be done by a merchant is establishing a clear written agreement, including those cases when the person in charge of the payment is for some reason not available.
Consider customer value
After all, some clients are not worth trying. Constant late payments, unscheduled interruptions, and not-respected behavior damage the merchant’s business flow. It is indeed cheaper both money-wise and time-wise to terminate the agreement with such a client or company. And if the case is critical a merchant should consider involving the legal institutions to solve the payment collection issue.
Tips for collecting from late-paying customers
Let’s sum up how to collect payments that are out of date.
- Positive approach. Most of the issues are easy to solve just using a customer-oriented approach. Staying on the positive side, gently reminding, and making a step towards the customer is the best way to get the payment delivered.
- Keeping track. It is a must for a merchant to keep track of all the late payments. Having a clear system with reminders and payment status is crucial in understanding at which stage the late payment is.
- Proposing a dividend payment. To propose a dividend payment might be a good option for those customers that had accumulated the debt. Same with just one late payment, it can save the situation.
- Starting with an email. The first step is always an email. A polite reminder with payment details and a merchant’s insurance is the customer’s responsibility. Give an email around one week to be responded to.
- Following with a call. The next step is a phone call. Indeed emails can be lost, a person in charge of payments can be not available. A call might solve this simple problem. Also, considering a customer or a company type, a call can be substituted with a message, physical letter, and so on.
- Hiring a collection agency. If none of the methods brought the payment to a merchant’s wallet, it is time for clearly not polite methods. A collection agency usually collects the debt and takes a percentage of the amount, or it can pay a merchant off, taking that late payment into ownership.
- Taking legal action. The last stage is a court in the case worth it. Depending on the lawyer costs and all the other legal fees, it is up to the merchant if he or she wants to proceed.