While marketing can do many things for your business such as help you acquire new customers or increase your sales, helping you get paid faster is probably not among the things that you are focusing your marketing efforts on – but perhaps you should be. Here are four ideas for how simple changes in your marketing could help your small business get paid faster.
- Segment your customers by potential. This should be obvious, but not every customer of yours will be one who will be ABLE to pay you more quickly. In any business, there are customers who face serious cash flow issues themselves and generally live from month to month. Identifying which of your customers fall into this category will help you to focus on those customers who you have a real chance to change behaviours with, and not on those who you will not be able to motivate for the simple reason that they cannot pay you with money they don't have.
- Jump to the front of the queue. It is critical to understand that getting paid is a competitive situation much like selling your products or services. No matter when your invoice reaches your customer, you want to always be at the top of the pile. Getting paid faster often means getting paid FIRST. So how can you do that? One simple method could be to skip the usual month by month approach. Are you sending out invoices on the 1st for the month before? That's what everyone else is doing as well. What if you sent your invoices on the 22nd of the month instead? They might still end up in your client's pile of invoices to get paid that month or the next, and instead of waiting 30 days or 60 days – you just cut 3 weeks off your waiting time.
- Use the personal connections. We tend to think of payment and invoices as an automated and financial transaction, but someone needs to click the button or sign the check. Do you know who that is for most of your customers? More importantly, do they know who YOU are? When monthly payment is a faceless transaction, it is less of a priority. If you have a relationship with the person signing the check, they can often be motivated to act faster simply because they know you personally. The best defense against getting put on the bottom of the pile is not to be faceless.
- Offer pay promotions. When thinking about marketing for your business, the natural thing to think about is using promotions to incentivize behaviour. Why not use the same technique for getting your invoices paid as well? Invoice discounts for early payment can be a good idea, and could be worth the lost revenue simply for the benefit of getting paid faster. You could even get more creative and send a special promotion with each invoice next month where every customer who pays the invoice before a certain date is entered into a drawing to win an Apple iPad. Their odds would likely be pretty good to win, and you could directly motivate the person who is pulling the trigger for you to get paid by giving them an incentive that motivates them based on their own personal interest.
This post is republished from my original article on the Amex Open Forum website. It is part of "Small Business Friday" on this blog, where I share ideas and marketing techniques specifically to help small businesses stand out. To read more articles like this, visit the "Small Business Friday" category on this blog.