For a small business, managing money can be a difficult task. As quickly as it comes in, it rushes right out, making it hard to grow and reinvest money back into scaling your business. To keep forward momentum, you not only need to keep your costs down but also plug up any money-draining holes so you can remain lean and efficient. One of these money-draining holes is likely debt collection.
Business debt collection requires hours of manpower to successfully execute and places a financial strain on profits. To further complicate the financial situation, small businesses often accumulate debt early on to sustain their growing business. On average, small businesses amass a debt load of $195,000 and pay $2,032 monthly to satisfy that debt.
To stay afloat and continue to grow, it’s imperative that you eliminate unnecessary costs and make your processes lean and efficient. One way to accomplish this is to automate your debt collection.
Why Should You Automate Your Debt Collection?
Time is money and for small businesses, saving time wherever possible is critical to scaling smoothly. Manual debt collection is time-consuming and tedious, as it requires your employees to perform clerical tasks and get on the phone with customers, sometimes multiple times if the customer is unresponsive. What if you could get this time back? How would that positively affect your business?
For one, it would improve and streamline your collections process and increase business and employee productivity. Running a productive and efficient shop is important to business growth.
Automation will also help you save money. Debt collection involves manually reviewing accounts, calling customers, organizing lists, sending documentation back and forth, and more. Automation replaces these tasks helping you regain these man-hours and put more money back in your pocket, thereby increasing your return on investment.
Customers will also benefit from bill collection automation. They will not need to contact a live agent to gather their billing information. All of their desired data will be available inside the automated system and immediately accessible to the customer. This automation increases customer satisfaction.
Lastly, some automated debt collection systems allow your small business to collect customer behavioral data which can help you improve and adapt your system over time. Use this data to segment your accounts according to how they best respond to communication, what time of day contact is most effective and which customers engage more with specific experiences. Once you segment your customers based on this data, use it to create customized collection experiences to increase customer satisfaction and response.
How to Get Started with Automated Business Debt Collection
Whether you want to automate all or some of your debt collection, getting started requires implementing technology that will contact your customers for you and eliminate the tedious manual labor. In addition, debt recovery solutions should offer multiple technologies so you can maximize your campaigns and choose which ones elicit the best customer response. Here are a few potential automated debt collection solutions.
Voice broadcasting is a common debt recovery solution that eliminates the need to make manual phone calls. Simply upload your contacts, create a custom message and send it to all of your customers simultaneously. Within seconds, your customers will receive your voice message and be alerted of their delinquent payments. Voice broadcasting solutions also allow you to schedule your messages and send custom messages if the calls go to voicemail.
Interactive voice response (IVR platform)
Interactive voice response platforms enhance your voice messages and provide increased functionality for customers. Customers can interact with outbound and inbound calls via voice responses or a simple keypress.
An IVR platform facilitates this increased engagement and gives customers assurance that your business is focused on meeting their needs. For outbound calls, provide options for recipients to make payments directly on the phone or speak to a customer service representative. For inbound calls, set up frequently asked question menus and allow customers to automatically retrieve account data without the need to speak to an agent. If callers want to speak to a representative, an IVR platform can facilitate this as well.
Text message service
One of the fastest and most effective ways to reach your delinquent customers is via text messaging. Text messages are opened 94% of the time and read within three minutes, and 98% of the population has access to smartphones. Use a text message service to upload your contact list, create your texts and schedule them to send. To send text messages, your contacts must have opted into your list, however, and given you permission.
For just pennies a call, consider using a text message service to automate all of your customer communication. Once a person becomes a customer, invite them to join your text list and receive company updates, promotional discounts and important business correspondence. If a customer is already on your text list, they will be more engaged and responsive when they get a payment reminder or warning.
Debt recovery solutions will also offer detailed analytics. Use this data to review your customer responses and what performs best, and adapt your solutions accordingly.
Use automated solutions to prevent debt collection
One reason customers do not pay their invoices on time is that they forget payments are due, or they are too busy to make them. Prevent delinquency by using automated solutions to remind customers of upcoming payments. Send reminders a few days and 24 hours before the payment is due. This will weed out the customers who can pay but simply forgot.
In your automated messages, give customers the link to your website where they can submit payment. In addition, provide the option to contact you directly if they have any concerns.
Automated Billing Success Stories
Many companies take advantage of automated debt collection to streamline their processes, speed up their workflow and save time and money. Here are some businesses using automated debt recovery solutions.
WhyNotLeaseIt is a company that offers customers the opportunity to lease products such as furniture, electronics and other household items. It works with retailers to offer lease terms to customers who would not otherwise have the chance to purchase.
WhyNotLeaseIt collects payments from all of its customers, so it needed a fast and efficient solution to remind customers of payment due dates and facilitate payment collection. The company implemented CallFire’s SMS text messaging solution and has increased its inbound call volume by over 40% as a result.
Owned by Brandon Sebald, former tight end for the University of Miami, Planet Fitness services 30,000 members from Miami to Arkansas. Managing overdue accounts posed a time and monetary challenge due to the magnitude of customers needing to be contacted regarding their accounts.
Approximately 10% of Planet Fitness customers default on their payments monthly and manual methods were expensive and time-consuming. Desiring to cut debt collection costs, Sebald deployed CallFire’s text message service and voice broadcasting solutions to notify customers for the first two weeks of overdue payments. According to Sebald, “The return on investment is incredible. The small amount we pay, if one member comes in and pays, it’s worth it for us.”
Waste Connections, Inc. services millions of customers across 29 states collecting and disposing of recycle waste for multiple industries and residential customers. To service this high volume of customers, the company needed a modern payment collection method to replace its outdated and inefficient processes. According to Bonnie Hawkins of Waste Connections, “Mailing and calling such a high volume of customers was becoming cumbersome.”
The company needed an affordable alternative to its laborious, resource-wasting collections process of manually dialing thousands of phone numbers at a time and sending out mail notifications. Waste Connections implemented CallFire’s voice broadcasting solution, and for only pennies a call, it reduced bad debt by 40% and recovered time and resources. According to Hawkins, “A phone list assigned to two people over the course of three to four days can now be completed by one person in about 15 minutes.”
As a small business, you need smart solutions to streamline your processes and put more money back in your pocket to grow your business. Automating debt collection is one such solution as it gives you back working hours, saving you money and increasing your bottom line. Automated solutions are also cost-effective, easy to use and they increase customer satisfaction as well.
Here at CallFire, we offer multiple automated solutions for your small business. As an industry leader, we partner with small businesses to help them become more efficient and save money by automating difficult manual processes. If you are ready to try a solution like voice broadcasting, text messaging or interactive voice response, getting started is fast and easy. Sign up for a free account here, and we will be happy to help you automate your debt collection.