Past-due accounts can be a big issue for businesses that pursue subscription or membership models. Customers can fall out of the habit of paying for your product as they transition from one stage of life to another, and those customers may not even realize they haven’t subscribed anymore. They might have missed an email from you reminding them that their credit card is about to expire.
We’ve got some tips for keeping your business’s past-due accounts in good standing and keeping your business rolling along.
1. Use Recurring Billing Software
You can’t manage what you don’t know, and that goes for more than just the logistics of running a business. If you don’t know when a customer’s credit card will expire, you can’t contact them in time to avoid an interruption in their service. You might also end up with a chargeback if they refuse to pay for an item already purchased.
Your business needs recurring billing software that allows you to create an account for your customer and know their payment information. You can set up notifications that will send you an email every time a credit card is about to expire, allowing you plenty of time to renew the subscription yourself or remind them to do it themselves. You can also see when one of your customers has changed their billing address or other account details so you can update your records accordingly.
2. Remind Customers to Update Their Payment Information
It’s not always reasonable to expect a customer to know when their payment information changes without being told. For instance, a customer could be working on debt consolidation through a service like Strategic Consulting and have yet to update their payment information. If you allow them to make the change themselves, they’ll be more likely to continue their subscription or membership rather than letting it lapse and simply forgetting about it.
Customer portal software provides a platform for customers to update their payment information themselves, reducing the number of past-due accounts you have on your hands. You can also use this feature to offer subscriptions or memberships with recurring billing, so customers don’t lose out on the benefits provided by these services even when they’re not actively paying for them.
3. Set a Deadline and a Notification Level
You can allow your customers to have some leeway with their payment plan, but there’s still going to be a point at which you need them to renew or risk losing access to the benefits of subscription services. It’s vital that you clearly communicate that deadline to your customers and then take action when they don’t meet it.
It’s usually best to send a gentle reminder when a customer is one month overdue in their payment plan. If you hear nothing from them after that point, you can set another notification for two weeks later. You should have the final say about how long you want to give your customer to renew, but being consistent with these notifications ensures that they know exactly what you expect them to do.
4. Segment Your Customers by Payment Plan
You’re probably going to have different levels of subscription plans for your customers, which means you must be able to distinguish between customers who are paid up and those who haven’t renewed. You can use customer portal software to allow your customers to update their passwords. This also separates them into groups based on the payment plan they signed up for in the first place, so you’ll know exactly when they need to renew or risk losing access.
5. Use an Automated Message to Remind Customers to Renew on Time
You may have a great relationship with your customers, but they aren’t going to read your mind and know when a payment is due. If you want them to renew their subscriptions so you can continue doing business together, it’s in both of your best interests for you to remind them when the time comes.
Customer portal software can automatically send your customers an email reminder about their payment plans no matter what time zone they’re in, which increases the chances that you’ll hear from them even if it’s late at night or early in the morning. You should also follow up with a phone call to offer personalized customer service to impress your subscribers and encourage them to continue their plans for another term.