Dunning often gets a bad rap. But, what if there was a way to change the perception of dunning? What if the dunning process could become a company’s next USP?
Unexpected phone calls that ruin a perfect day. Arbitrary deadlines that don’t seem to make sense. To the average customer, missing a payment or being reminded about it are not generally regarded as positive experiences.
However, all companies need to secure their revenues. Getting paid, aside from a profit motive, is also about survival. When late payments and non-payments spiral out of control, the effect can be very detrimental to the balance sheet.
Make dunning a positive experience
How can your clients get more out of their dunning process, while maintaining a great customer experience? There’s often a lack of clarity regarding the best way to approach this problem and get results. In essence, what companies need to do is take a good look and evaluate their communication process. Is the message being received by the recipient? Is it being understood? Does it lead to the desired action?
To that end, we’ve developed a framework with an easy-to-remember acronym: UDAP.
Let’s break it down in just four steps:
Step 1: Understand
First, companies need to know their customer’s preferences when it comes to communication channels. E.g. don’t send letters to customers who prefer emails.
Step 2: Diversify
Secondly, companies need to diversify their approach. Multiple communication channels work better than one. The customer journey, whether it’s for purchasing new products or paying old bills, will benefit from the inclusion of multiple touchpoints.
Step 3: Adjust
Thirdly, companies need to meet their customers halfway. In practice, this means delving into their customers’ demographics and behaviour in order to increase the effectiveness of dunning efforts. For example, if a customer segment has trouble reading, the company can supplement its emails, for example, with audio and video.
Step 4: Provide
Lastly, companies need to provide options rather than ultimatums. Assuming that a company’s customers like the service it provides and actually want to pay to keep making use of it, the question then becomes: how do you make sure the customer always feels empowered to resolve the outstanding debt?
For starters, companies need to make sure they offer all the payment methods customers use and expect, including local and regional payment methods. Moreover, customers need to be provided with flexible self-service options, all within a few clicks. One such option is allowing them to select a future due date on which to pay. Another, is offering the option of starting a custom payment plan, so customers can pay a certain amount per month until the debt is paid in full.
Moreover, companies can either incorporate a self-service strategy within traditional communication methods or opt for more high-end solutions. For example, at Alphacomm, we created an interactive video reminders platform that informs customers regarding late payment and involves them in the resolution. How? By allowing customers to make their own decisions, at their own pace in a non-threatening digital environment.
Bonus tip: Set the right tone
When it comes to getting late invoices paid, establishing personal contact can prove quite tricky. First off, customers value being in control of the solution to their financial woes. Moreover, there is often also a deep sense of shame associated with debt. A shame that is only exacerbated by having to discuss it in detail with a total stranger. Paying outstanding bills should be as simple as making an online purchase. Customers should be able to do this easily and without the ‘help’ of a bill collector.
Therefore, it is crucial that managers take a good look at their dunning process and assess how they are addressing their customers. This means taking a look at the tone of voice used in company communications and asking if that is how they would like to be spoken to.
Moreover, how helpful are these messages? To what extent are companies pre-filling or providing information that customers would otherwise need to go search for themselves?
By using a personalized and positive approach throughout the dunning process, a ‘sense’ of personal contact is established long before the actual deed. Though customers may not want to get on the phone, merely knowing that it would be a non-threatening experience if they did, goes a long way in terms of establishing a healthy relationship.
Also, the upshot of empowering customers to help themselves is that employees have more time to handle the cases that require personal attention.
In the end, it is important that customers feel a company is on the same page as they are. By applying these steps, your clients will:
- help their customers take care of their finances without feeling overwhelmed or pressured,
- boost customer loyalty by adopting a customer-friendly stance
- cut the overall costs of dunning, by reducing the need for intervention by live customer service representatives.
Sounds like a win-win right?
Get in touch
If you’d like to spar about how to improve the dunning process within organizations, reach out to us anytime.