We often talk about how to overcome the non-paying customer that leads to bad business debt, but that does not mean that you should forget about your paying customers who do it right. Forget about them, and it could lead to early and prompt payment being more of an option than something they pride themselves on.
Plus, if you incentivize prompt payment, and properly publicize early payment discounts through an email marketing tactic, you could motivate others to follow in the prompt-paying customers’ footsteps. Positive incentives always make for a better customer experience!
By making it clear on your invoice or contract that there is a discount for prompt payment, your invoice will become more important when billing comes around. An incentive of 2/10 net 45, which means payment is due in 45 days, but if paid within 10 days, they will receive a 2% discount, is quite common. It will cause accounts payable departments to put your invoice on the top of the pile when paying invoices.
Tip: Invoice twice a month to get invoices to customers earlier to decrease the payment cycle and increase cash flow.
Provide better credit terms as an incentive.
While you may list your credit terms on your invoice or contract, often customers will try to negotiate better credit terms. Create a rule that if a customer does not have an incident of late payment over a period of 6 months or a year that they can be extended better payment credit terms (i.e. Net 45 instead of Net 30). Customers will appreciate your flexibility. Always revoke these privileges if it becomes a problem.
Create a “valued” customer group.
Host an event.
The customer does not need to know that the meaning behind the event is due to their prompt payment. Depending on the size of the company, plan an event for customers who promptly pay. Then, take the list and rank it by purchase order totals. Invite the top 5-10% of prompt-paying customers, depending on the size of the list, to personal 1-on-1 events. Common events could be: lunch, dinner, golfing, happy hour, etc.
Thank your customers with invitations to exclusive events that will help them excel in their industry.
Get to know your customers.
Create a personal connection.
Send cards, and make sure they are handwritten.
A handwritten note can go a long way. By humanizing your company, you can create a deeper connection than simply through your product or service. Thank them for their prompt payment, especially on a large order. Plus, don’t stop there. Send holiday cards and grow your relationship between the businesses.
Check in regularly.
Haven’t heard from a prompt-paying, regular customer? Reach out and see how they are doing. They will know that you value their time and money.
Don’t try to sell 24/7.
Send a gift.
Before embarking on gift giving, always establish rules for when a customer should receive a gift. Reward regular prompt payment for repeat customers. By implementing a valued customer event or a 1-1 meeting, you will be able to get to know the customer better and can send a personalized gift as a thank you.