I work in a SaaS enterprise equivalent to a gym membership. The client knows they should use it because it's good for them (earns them $$$) and once they're in the swing they love it. But despite my best efforts at UX, the subject matter is inherently dry for creativity, and if they get distracted or hesitant, they tend to stop “going to the gym.” As a "personal trainer" I have to stay vigilant to keep everyone happy and motivated or I'm losing clients...hence interpersonal skills.
Some clients don't pay their bills on time and the system automatically cuts access to profitable parts (along with a courtesy email to their accountant and account manager). Once a month, a user emails me and says (to paraphrase his tone), "I can't access my data because you're too late. I'm trying to get a job done and it's making it difficult to work. Can you restore access, please?"
(For context, on this moment I reply to something like " Sorry, it automatically disables you when the account is expired. I have regained access. [name of acct manager on copy] processed invoice “By what date can we expect payment? »)
Can anyone give me an explanation of these users' attitudes and a strategy for what I can say or how I can behave:
- Increase the likelihood that you will be paid on time and at the same time;
- make those users happier as a result of these actions (i.e. avoid "enforcing" payment compliance through punishments. I can think of a lot of enforcement actions I could do that would decrease the user's happiness).
Clients about whom in question, usually refer to countries in Latin America.
42 responses
Some clients don't pay their bills on time and the system automatically cuts access to the profitable portions (along with a postal letter to their accountant and account manager).
How is this letter written? Do customers/users receive or just the accounting department?
Has the user been warned that they will be disconnected from the service?
A simple solution would be: when a payment is late, send a friendly reminder first, both for the account and for the actual user. Then, wait two weeks, send another reminder, and only turn off the service after, say, a few days.
This should leave them enough time to either pay or remember accounting to do so. This also ensures that they will not have unpleasant surprise when their service will be cut as they have been warned...
The reaction you don't want is "Damn, this thing doesn't work!" but you need a reaction: “Damn, we forgot to pay!”
The error page should also say something like:
"Please make sure your spam filter is set to accept the two warning messages we sent you in previous weeks to avoid further inconvenience."
One of the business owners asked for advice on how to collect receivables. Here is a short excerpt from the new book Financial Planning: The Art of Income Creation.
The work of collecting fees has its own technology, which consists in the fact that the client needs to be reminded in time, gradually increasing the pressure. This requires a very high level of discipline, organization and the ability to enforce commitments. Such qualities are not usually found in salespeople, whose talents are usually to quickly build trust and maintain interest.
1. Phone call with a friendly and polite reminder that within the next 3 working days the client needs to pay the invoice.
2. Call on the last day of the payment deadline. In the middle of the working day, the client finds out if the payment has already been made. If payment is not made, he is kindly but firmly reminded that he has committed himself to pay within this period, and demanded that he make payment before the end of the day.
3. If the client has not paid on time, the next day he should be sent a letter by fax or e-mail. The letter must indicate the requirement to pay or penalties will be applied.
4. After sending such a message, you must call and demand that he either pay within a day or provide an official letter with the date of payment.
5. If there is no payment and there was no letter with a request to reschedule the payment date, you must call the next day and demand an official letter.
6. If the client does not send a letter within a few more days, a formal complaint is sent to him with a warning that the case will go to court if within certain period payment will not be made.
7. If the client has not complied with the requirements, send all Required documents lawyers and start a lawsuit.
This sequence may seem too hard, but this is just an example, you can develop a softer one based on it. Please note that in order to perform this work, the employee must enter the “level 1 impact” task on the calendar for each account, and then punctually complete this task. In order not to miss any payments, he must maintain the appropriate tables, constantly work with the calendar. Performing a “2nd level impact” requires calling not just on some day, but at a certain time. Sellers tend to just forget to do this. Considering that a company can have dozens or hundreds of invoices to pay, that's quite a lot of very specific work. When sellers try to entrust such work, the result is always the same - they often cannot complete even the first step on time and correctly, they are almost guaranteed to “forget” about the second step, and they are afraid to even think about the next steps.
When we implemented a “gradual increase in pressure” approach, it always resulted in an increase in revenue and a significant reduction in receivables. After all, most customers make payments rather chaotically, they pay first of all to those who require payment. Of course, this approach can lead to the fact that the company will lose some small part of customers, but, oddly enough, such losses also contribute to revenue growth. The reason for the growth in income is easy to understand - sellers, instead of clinging to their last strength for problem customers, are forced to look for new ones. At the same time, the company is getting rid of customers that eat up resources ( working capital And work time), they go to competitors and create difficulties for them in their work. But, interestingly, when implementing this approach, the sales department most of all disagrees, they always say the same thing: “We will lose customers, everyone will leave us, it would be better if we collect payments ourselves.”
One of the business owners asked for advice on how to collect receivables. Here is a short excerpt from the new book Financial Planning: The Art of Income Creation.
The work of collecting fees has its own technology, which consists in the fact that the client needs to be reminded in time, gradually increasing the pressure. This requires a very high level of discipline, organization and the ability to enforce commitments. Such qualities are not usually found in salespeople, whose talents are usually to quickly build trust and maintain interest.
1. Phone call with a friendly and polite reminder that within the next 3 working days the client needs to pay the bill.
2. Call on the last day of the payment deadline. In the middle of the working day, the client finds out if the payment has already been made. If payment is not made, he is kindly but firmly reminded that he has committed himself to pay within this period, and demanded that he make payment before the end of the day.
3. If the client has not paid on time, the next day he should be sent a letter by fax or e-mail. The letter must indicate the requirement to pay or penalties will be applied.
4. After sending such a message, you must call and demand that he either pay within a day or provide an official letter with the date of payment.
5. If there is no payment and there was no letter with a request to reschedule the payment date, you must call the next day and demand an official letter.
6. If the client does not send a letter within a few more days, a formal claim is sent to him with a warning that the case will go to court if payment is not made within a certain period.
7. If the client has not complied with the requirements, send all the necessary documents to lawyers and start a court case.
This sequence may seem too hard, but this is just an example, you can develop a softer one based on it. Please note that in order to perform this work, the employee must enter the “level 1 impact” task on the calendar for each account, and then punctually complete this task. In order not to miss any payments, he must maintain the appropriate tables, constantly work with the calendar. Performing a “2nd level impact” requires calling not just on some day, but at a certain time. Sellers tend to just forget to do this. Considering that a company can have dozens or hundreds of invoices to pay, that's quite a lot of very specific work. When sellers try to entrust such work, the result is always the same - they often cannot complete even the first step on time and correctly, they are almost guaranteed to “forget” about the second step, and they are afraid to even think about the next steps.
When we implemented a “gradual increase in pressure” approach, it always resulted in an increase in revenue and a significant reduction in receivables. After all, most customers make payments rather chaotically, they pay first of all to those who require payment. Of course, this approach can lead to the fact that the company will lose some small part of customers, but, oddly enough, such losses also contribute to revenue growth. The reason for the growth in income is easy to understand - sellers, instead of clinging to their last strength for problem customers, are forced to look for new ones. At the same time, the company gets rid of customers who eat up resources (working capital and working time), they go to competitors and create difficulties for them in their work. But, interestingly, when implementing this approach, the sales department most of all disagrees, they always say the same thing: “We will lose customers, everyone will leave us, it would be better if we collect payments ourselves.”
Lessons.
So, today we will talk again about freelancing and the difficult lot of those who have chosen remote work.
If you have never worked with clients who are seriously late in payments, or with those who do not pay at all, then you can only be envied. In reality, freelancing is often associated with similar problems. We can say that paying for freelance work is almost the Achilles heel of the whole concept of remote work.
This happens and there is nothing worse for a professional than to invest his soul in a project, and as a result receive only an apology or a banal “frost”. And while banks don't accept "sorry" and "thank you" as payment, you need to do something to reduce the number of such incidents to 0.
In reality, unscrupulous customers can be found almost everywhere and the size of companies is not the main thing. Unscrupulous clients come across both in the form of small local businesses, and in the form of large companies with offices throughout the country. The only thing they have in common is that they start brainwashing you with promises to pay "as soon as you do this one more thing." They will praise your design and feed you promises of future projects and referrals to their partners, but the fact remains that you will sit without pay until you stop working for them yourself.
Such cases will seriously hurt both your pride and the state of your bank account. Luckily, there are several ways to organize freelancing fees that will allow you to significantly reduce the number of shell clients, especially when you don’t have a lawyer you know to sue the hell out of such companies or individual clients.
Majority large companies prefer to pay for freelancing with some delay. Some are due to deferred payments on the part of their clients, the second - after coordinating the work with three directors, neighbors in the corridor and the cleaner Aunt Glasha, and the third - because Jupiter is in the Saturn zone. And many freelancers agree to these onerous conditions.
And that's great, but great only for customer companies. It gives you a mountain of problems and days of empty waiting. If you are hired for a project, then the work must be paid immediately after completion actual work. If there are no delays in your work, then there should be no delays in paying for these delays - start respecting yourself as a professional.
But how do you get customers to pay on time for your services? Let's understand it with simple examples and steps. To reduce the number of insolvent customers, you just need to stick to simple rule - you do not do the work until you receive payment for the previous stage.
For better financial control, create an account in a popular payment system, and also make some kind of widget with the ability to pay online directly to your bank card. Yes, it will cost you a few extra percentages, but it will greatly simplify the process for clients and allow you to better control a large number of small transactions.
« No pay, no further work» - this principle should be fundamental in working with clients. Do not be afraid to mention this in negotiations with clients. For the vast majority, it will be easier to pay you in small tranches for each successfully passed stage.
If your job does not involve fixed costs for anything, then here is an approximate list of how you can organize payment for the project in order to see the client’s interest in working with you on the one hand, and on the other hand to remain motivated until the end of the project:
- Prepayment - 10%
- Prototyping - 20%
- Design/coding of the main elements - 30%
- Creation of other elements - 30%
- Testing + some final edits - 10%
Of course, this list is not a rule and you can move the percentages back and forth depending on the specifics of your industry. But practice shows that the more you worry about splitting a project into so-called milestones, the less risk there will be to make an entire project and get a BIG thank you for it.
And there is nothing wrong with asking for an advance payment even for small projects. Remember that by agreeing to them, you reserve some time in your schedule for fulfillment. And by staking time for such a project, you may lose the opportunity to take on another, larger project. These are all risks that must always be taken into account.
Your clients need to understand that the work will not start until:
- You will not receive payment. If a client complains that he has to pay before the actual work starts, he will most likely be a pretty bad client and bring you a lot of problems. Remember, if you're turning down other projects and waiting for progress on this one, you should get a deposit to insure you don't waste time waiting.
- You and the client will read, understand and sign all the clauses of the offer. A proposal does not become a working plan until both parties agree on every point in the plan. Only in this case, the document will begin to reflect the point of view of both parties.
- The client will not start work on "homework". Waiting for data, photos, graphics, presentations and Word files with texts not only makes your nerve cells burn out faster, but also makes significant shifts in time. Don't start work until you have complete list necessary information- it will only motivate and discipline the customer.
The approaches described here in some cases may seem a little uncomfortable to discuss with a new customer, who can easily “off the hook”. But does the level of discomfort compare with those cases when you did the work and you were not paid? Not? That's it!
Increasing sales, we will inevitably come to credit the buyer, allowing him to deferred payments. For some companies, receivables become a headache - it is not clear how to collect them. To other buyers carry money joyfully and on time. Today in our blog we will talk about how to motivate a client to pay on time.
Every business has a receivable, but successful companies differ in that they know how to manage it. Frantically calling or visiting customers at the end of each quarter to collect anything is not our method. We are not advocating for a complete deferred payment. You just need to know who, when and how much to give. We have already dealt with the question TO WHOM, today we will talk about WHEN and HOW MUCH.
- Divide and rule
If you work according to the factoring scheme, then it is she who will check your buyer, evaluate him, and set a financing limit. Consider for yourself whether all this work is worth the commission that you pay to the factor.
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