Be it pre-sales or post-invoice, following up with a client can be hard and tricky. Too many follow-ups can make you look desperate. But at the same time, you miss out on an opportunity to make a sale or in getting your invoices paid on time by not following up with your clients. There are however a few strategies to getting your customers to offer a timely response to your follow-ups.
Early Payer Discounts/Upfront Payments
Clients love discounts and inevitably ask for one while negotiating the price on a project. Tie in such discount offerings with their payment schedule. This way, the clients may enjoy a discount as long as they pay on time. Another way to sweeten up the deal would be by offering discounts on upfront payment. This strategy helps you maintain a healthy cash flow and completely avoids the need to follow up with a customer.
Automated Follow Up
Follow ups are absolutely critical at each stage of a client relationship. But following up too often does come across as desperate. One way to tackle this is by routing your follow-ups through an automated channel. Invoicing software tools like QuickBooks come with an option to notify customers for unpaid invoices. While an out-of-the-box solution does not exist for this yet, you may use the QuickBooks API to configure your system to send out automated alerts to customers about payment dues. Clients are more likely to be accepting of frequent follow-ups when they are automated rather then when they come directly from their vendors.
Late Payment Fee
There are two ways to push customers towards timely payment – by creating incentives for early payment or by creating disincentives for late payments. Late payment fee is one way to tell the customer that they tend to lose more money by failing to make the payment on time. While this strategy may not seem too different from the early payer discount strategy we discussed earlier, you should remember that this may not work all the time. Late payment fee works when your client continues to use your service and may be affected one way or the other due to late payment (connection getting disrupted, etc.). If you are dealing with a client for one-time project though, late payment fee seldom works since the client does not lose anything by letting the payment accrue indefinitely.
Not all payment delays are intentional and it may sometimes be because your client may not be checking their emails frequently. If you notice that your follow-up emails are not getting any response, it is a good idea to simply call up and check on the status. Calling your client once in a while is not desperate and may sometimes be the only way for your client to act.
Recurring billing or Credits
If your project involves regular billing cycles, the best way to avoid following up is by moving the payment to an electronic platform and enrolling the customer to a subscription plan. From a service providers’ perspective, this removes all the hassles with respect to getting paid on time. From a client’s perspective, it improves customer experience and helps them avoid the hassle of making payments every month.