Unfortunately, getting customers to pay their invoices (and on time) can be a challenge. There’s no sure-fire way to get them to pay every time, on time —but there are ways to motivate them.
One way is by using a tool incorporated in Esker’s Collections Management solution: payer rating. In some ways, it’s similar to a credit score, but much more transparent in the way it is calculated. By adding the total days past due for all paid invoices and then dividing that by the total number of paid invoices, the average days late is calculated, and thus, a payer rating. Customers are then categorized based on their average days late from best to worst: excellent, good, fair and poor.
Right about now you may be thinking “How is that motivating for customers?”
Companies have the option of displaying that payer rating within automated payment reminder emails, painting a clearer picture for customers on their payment history performance. Some customers may not even realize that they have a bad track record, leaving them bewildered by their status. But that’s not a bad thing!
In a recent call with a company, they spoke to us about their experience including payer ratings in their payment reminder emails. Soon after they had begun to include them, they received a call from a customer shocked at their “poor payer” rating. The customer didn’t understand why they had received that rating, but once it was explained, vowed to improve to “excellent payer” status.
Nobody likes hearing that they aren’t doing well. When they see that they have a less than satisfactory rating, it motivates them to do better.
Just think about it: You open an email with your account statement enclosed and you see above it that you have been given a “poor payer” rating. Would you be satisfied with that? Competition is extremely motivating, and although the competition is oneself in this case, it doesn’t diminish that motivation.
Give people something to strive for when it comes to making their payments and you’ll likely be pleased with the outcome!