To remain profitable, a business needs to keep attracting new customers and retain existing ones. Keeping customers once you win them is essential to build customer lifetime value and long-term profitability. That’s because attracting and onboarding a new customer usually involves costs such as sales, marketing, advertising, and administration.
By Charles Pittaway, MD of Netcash
But once they’re on board, costs of cross-selling and upselling to customers are lower than winning new prospects over. One study found that increasing customer retention rates by 5% increases profits by 25% to 95%. There are many elements that go into customer retention, but one that many small and medium businesses overlook is the billing and payments experience.
This is a part of the customer relationship that should be smooth and effortless, but frustrations often creep in. Here are a few ways a better billing and payments experience can help you to increase customer satisfaction and retention.
Personalised invoices that customers can pay instantly
Paying monthly accounts is a pain point for most consumers. They get a range of invoices by email or text or on web portals. They usually need to log into online banking or a separate payments gateway to pay each bill.
But with a modern payment solution, your customers will be able to pay directly from a secure link sent by SMS or email. This saves them time and effort, and it makes it less likely they’ll forget to pay. It also facilitates a smoother customer relationship.
Fewer failed payments
Research from LexisNexis found that 60% of organisations reported losing customers as a result of failed payments, and that failed payments cost the global economy an estimated $118.5 billion in fees, labour and lost business.
A robust, modern payments gateway will help to minimise failed payments, reducing the risk that the customer will give up in annoyance and shop somewhere else.
Supporting the customers payment medium of choice
The selection of payments options is dauting for an SMB. They include cash, EFT, debit orders, payments at retailers, debit, and credit card payments, QR codes, digital wallets, and instant EFT. But many customers have a strong preference about which payment instrument they use. Some feel strongly enough about it that they might go elsewhere if they can’t, for example, pay by card or instant EFT.
Or, they can pay with another instrument if their first choice fails. It used to be complex to support all these options. However, today’s fintech payments solutions support anytime, anyhow payments from multiple channels and instruments in a single platform. They also integrate with leading software vendors to enable you to automate payments, acceptance, and reconciliations from end to end.
No effort subscriptions and debit orders
One of the most mundane reasons for customers allowing their relationship with a company to lapse is that they simply forget to make a monthly payment. Enabling them to sign a debit order mandate or a card subscription is a powerful way to retain customers. They won’t need to remember to make a manual payment and you’ll receive the money on time each month.
Analytics and data to get customer insight
Once you’ve invested in a payments solution that integrates smoothly with your accounting solution and ecommerce platform, you’ll have access to rich data about your customer journey. You’ll be able to analyse transactional data to understand customer likes, preferences, and behaviour. These insights can help you improve your customer experience to build loyalty and satisfaction.