Posted by Bethany Frank on 29 Jan 2016
Customers have no shortage of options in the modern age, often leaving businesses scrambling to set themselves apart and attract attention to their own products and services. What’s often overlooked, however, is how customers are paying these products and services once they choose to buy them. For many businesses, payments tend to be an afterthought or even overlooked entirely. But payments play an integral role in overall customer experience, and taking steps to enhance the process can ultimately improve business.
Get Paid Faster
Business owners understand the pivotal role of good cash flow in a thriving and growing endeavor. Without a proper flow of funds, productivity suffers and expansion is difficult. Traditional payment methods like checks can take a relatively long time to process, so businesses that still collect a majority of their revenue through arguably outdated methods may unknowingly be putting themselves at a disadvantage. Because payment methods such as credit card, debit card, and ACH are typically processed faster than checks and require less work on the customer’s part than an in-person payment, offering such options is a simple route to accelerate payments.
Slow payment processing isn’t the only problem plaguing cash flow within some organizations. Rough economic times have left many consumers in a financial bind. When not offered flexible payment options, some customers may stall on payments or miss them completely, increasing the risk of accumulating bad debt. A platform that gives customers the freedom to choose their own payment method allows them to manage their own finances better, which could lead to quicker payments for your business.
The Future is Digital
With consumers spending so much of their time online, businesses should strive to take as much payments activity to the web as possible. Beyond pure value, customers also seek convenience, making features like electronic invoicing and online bill payment differentiating factors that could lead consumers to one business over another.
Sending paper statements and receiving payments in the mail is a lengthy process that costs businesses both time and money. Traditional bill presentment and payment processes also leave a lot up to the consumer—he or she must take the initiative to sort through mail, open your bill, and go through the motions of writing and mailing out a check. Instead, sending statements electronically and accepting payments via web and other channels increases the chances that your bills are seen, and it makes it easy for your customer to take action and pay you sooner rather than later.
Customer Satisfaction is the Goal
While credit cards are the most popular payment method in the United States, preferences are quite varied in other countries. In India, for example, 17 percent of online payments are made via bank transfers. Businesses that serve an international clientele should definitely consider offering a wide variety of payment options, but freedom of choice is highly valued in the United States as well. According to a J.D. Power study on customer satisfaction in the utility industry, satisfaction increases when customers are offered billing and payment options. The case study indicated customer satisfaction is highest among customers who use their utility’s online website to check their account or pay a bill. Various studies have confirmed similar observations within a number of industries.
Open Up New Markets
A comprehensive payments platform also provides valuable data to help sales and marketing teams devise effective strategies to entice new customers. Data collected by an electronic bill presentment and payment platform can help a business identify trends and customer behaviors for highly targeted or customized loyalty programs.
Offering multiple payment channels and methods— particularly web and mobile options—can also help a business attract customers in the “millennial” generation. Considered an almost exclusively digital cohort, millennials prefer online and mobile payment methods more than any other generation. Nielsen reports 55% of mobile payments are already made by smartphone users ages 18 to 34. Millennials are expected to account for $1.4 trillion in spending by 2020 and already represent the largest segment of the American workforce, making them an increasingly important demographic to take into consideration.
Flexible payment methods and channels offer a variety of benefits to businesses looking to modernize their services, offer value and convenience to customers, and appeal to new or developing markets. The right payments platform can help a business transform outdated and costly administrative processes while enhancing the customer experience. Is an electronic payment solution right for your business? Learn more here.
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