Recurring Payment Processing and Marketing your Automated Payment Program: Here are 15 Easy Steps to Maximize Customer Participation in an Automated Payment Program

AutoPay programs via ACH processing and/or credit card are statistically proven to increase customer retention. The insurance industry was one of the first to leverage the power of automated recurring payments to both grow cash flow and improve retention rates. When a person does not have to think about writing a check or handing over a credit card each month they are much less likely to think “Do I want to keep paying for this service”?

Recurring ACH and credit card processing offers reliable, predictable cash flow and better retention rate, two major benefits of having customers on AutoPay. Add significant time and money savings to the list-$5–8 per person savings for those on Autopay [SBA/Gartner study estimates]. So take the # of your clients and for those not on AutoPay multiply by about $80 [for monthly payments]. That provides yearly savings estimates per client/donor.

Want yet another reason? How about a more valuable company? At some point you may sell your company. Businesses with recurring revenue tend to sell at multiples of that monthly revenue. The business with the majority of their clients on an automated payment plan can potentially sell for a 25% higher multiple.

But that is just the beginning of potential for business improvement. Once you have maximized AutoPay participation you will now have a foundation in place you can use to increase profitability and grow your business. Going through the process can provide you the insights and tools to double your profits. You may be thinking “not possible” but consider the following areas you will have looked at that can impact your bottom line:

• Reliable, predictable cash flow: Planning is much easier when you know your revenue targets are met automatically. Time and money spent on payment collection can be refocused on revenue generation. Instead of collection calls you can make
• The power of systems: by creating/implementing/monitoring/measuring an AutoPay program you will have firsthand knowledge of how powerful having defined procedure/policies in place. Your organization can benefit in multiple areas by creating documented systems.
• Better client service: Training your staff to anticipate client needs/objections, having scripts in place, contacting clients to survey needs.
• New customer acquisition tools: structured referral program [see author John Jantsch], new advertising mediums, local business groups. Creating ideal customer marketing message.

If you ask a business that relies on monthly or weekly payments to list his or her biggest source of stress it would typically be Payment Collection. Clearly a business owner that does not have to spend hours each month running around or calling clients to pay for their valued service has extra time to spend ON the business and not IN it. Business consultants consistently and unequivocally agree that until a business owner can transition from the day-to-day minutia that consume time that owner will not realize that businesses true potential. This is where the power of an automated payment collection system can help transform your business.

So we know that the more customers on an automated payment plan program the better it is for your business. The challenge can be getting your customer to get on board. Though some businesses are in a position to mandate automated payments (health clubs have done this for years) most businesses have to rely on customers agreeing to the change. Here are 15 easy steps to either increase your participation rate in an ACH and/or credit card automated program or encouraging the customer to move from a credit card to an ACH (echeck).

1) Every time you interact with a customer whether they are paying a bill, signing up for service or calling for support let them know about the convenience of an automated payment plan or check by phone. Use the brochure we have developed for you to deal with “safer writing check” arguments. You must train staff to do this automatically. Invest the time and effort to create a checklist/script people can refer to. There is also info at the bottom of this document.

If you have a CRM system use it to denote who is an AutoPay target. If not create an Excel sheet or something similar so that everyone interacting with clients knows they have an opportunity to improve the business by converting them to AutoPay.

There must be a concerted ongoing effort from all team members. EVERY interaction is a chance to save $80/year. The data about who is/is not on AutoPay has to be at everyone’s fingertips. Whether that is via a software/Internet CRM or on an Excel sheet is not important [although automated follow up (auto-responder like AWeber) with CRM system would be nice]. Consider rewarding conversions-remember these can be worth $80/year. If you average client stays with you for 30 [Lifetime value] months you are looking at $200 in savings. If you get someone good at this process have them document what they do and let others model. Make it a contest with the most converts awarded a gift card etc.

How to deal with the reluctant client: You will often get pushback from a customer unwilling to “give out payment data” or says “I have been burned before”. They may have in fact had an unauthorized debit to their account or they may be someone you are always chasing for payment.

Let’s deal with both. First the “it’s not safe” argument. Paper check fraud occurs 4 times more often than electronic payments. In addition when the check writer does experience fraud the burden is completely on them to deal with the fallout [potential multiple instances of disputes/stop payments [and the FEES]. By contrast electronic payments have dispute mechanisms built into the process that legally protect the consumer. There is simply overwhelming evidence that electronic payments are safer and more secure.

If the client still refuses you can appeal to their wallet. If they are writing checks they are spending close to $6/year in postage, why? You can also impose non AutoPay surcharges again using the arguments discussed. How about the environment? Or explaining that they get better service/products etc when you can focus your attention on meeting their needs [or their children] instead of time spent on payment collection.

So you have the information to convince them to use AutoPay. Yet they still refuse. Typically we are now dealing with someone who is worried about payment $ amount not being available in their bank account or on credit card. Times are tough for many people and this is a real concern. The issue is whether the time you spend collecting that payment [or the stress/hassle] is worth having the client. In many instances you are better off “firing” that customer.

The idea may sound anti-business but in many cases you could fire 10–20% of your client base and devote more time to your ideal customer. By doing that you have more time and energy [less stress] spent on those who truly value your service/product. That will translate into more referrals to more of those ideal clients. You will soon replace the fired client base with people who AutoPay J and you love working with.

Very liberating-think about clients that suck the energy from you and how you would feel if you replaced them with clones of those you love working with.

2) Include information about your automated payment plan or check by phone option on all invoices and customer correspondences. Include a call to action to sign up for the automated plan and make it easy for them to do so. You may do an insert with all the benefits [or reference arguments for Autopay. Make sure you say “Call us now to sign up” maybe include an incentive. Direct them to your website for sign up forms/more info.

What’s in it for the customer needs to be your thought process — More time for your business to spend on them delivering a better product or service. They spend less money and time on making payments. How they can do their part for the environment? Yes it is GREAT for you but most people aren’t at all concerned with making someone else’s life easier. Human nature is always “what is best for me”? So recognize that motivation and play to it. If you use a POS system and can customize receipt language add your call for AutoPay. For recurring payments use email receipts and add this call to action.

3) Make your web site a billboard for your automated billing plan. Include sign up forms and directions. Educate your customer [step #13]. If they understand that ultimately they get time and money savings plus better service and environmental benefits they typically will agree. Maybe a Top 5 reasons why AutoPay is the way to go [or the only way]. Here is a Top 5 sample but you can modify as you wish:

1. Saves you time: No more check writing, stamps/mailing envelopes

2. Save money: Stamps are getting expensive!

3. Environmental benefits-less paper. No mailed invoices or paper checks

4. Reduces Identity theft potential: Paper checks with personal info get lost in the mail and sometimes find their way into hands of bad people. AutoPay reduces risk substantially.

5. Helps business be able to spend more time on quality service

Your website can also be used to allow your clients to sign up and provide needed documentation. Your business should always get customer’s permission to debit on a recurring basis. This can be done with a signed form [example at ] or you can have the consumer digitally sign via a web page [example at ]. The reason you want to have evidence of permission to debit is two-fold. First if the customer ever disputed the charge you have evidence to support debit. Second, NACHA [Nacha.org] rules state you need to secure permission.

Your payment processing partner may randomly perform compliance audits. Depending on your software provider or internal technical abilities it may be possible to automate the entire process and have ACH or credit card data pushed into the software.

4) Start an incentive campaign for automated payment sign up. Consider giving away free certificates (see step 6) or possibly offer 5–10% off their next 3 months billing or some other motivational offer. Consider partnering with a local business and offer cross promotional coupons for 10% off products in return for program sign up. An example might be restaurant/plumber/HVAC.

This is also a great way to develop referral partnerships with businesses that have a parallel [non-competitive] customer base. Consider creating your own referral/cross promotional group.

Done correctly you can create a new, consistent customer acquisition tool. Some businesses have taken this a step further and charge a monthly fee to be part of the group. They hold quarterly meetings/do coop advertising, create a local website directory etc.

This is an extraordinarily powerful way to grow your business. If you are the one organizing you have a huge advantage.

5) Create a marketing campaign around AutoPay Push. Use Press Releases and let your customers know [newsletter/invoices/telemarketing etc].

Some ideas:

• Partner up with Feed America at http://www.feedingamerica.org/ . For every AutoPay conversion donate 10 meals to LOCAL families in need. VERY inexpensive and you do fantastic good
• EarthDay [April 22nd 2017]. Start in January and February and target your base and make plan around environmental benefits of no paper checks or mailed statements

6) Telemarket your customers and let them know about the program and advantages [see #13] of signing up. You can use internal staff or hire a telemarketing firm to call for you. For a couple of hundred dollars you may be able to up your participation rate dramatically.

If you have staff with downtime fill it with these types of calls. Utilize any of the other suggestions and TRAIN them what and how to say it. Please do NOT leave this to chance-train, measure and strategize how to improve. $80 year per client incentive to get this right. If they leave a message direct to your website.

There are also economical automated calling services. Eg Callfire.com // IfByPhone.com//Velocify.com. These services allow you to upload your customer list with phone #, craft a message and deliver it for pennies per call. There are multiple options such as only leave a message for voice mail, live transfer any interested customers. You have multiple choices. Clearly you do not want to offend anyone but these are your clients. This is also a great tool to run promotions/specials for slow times.

7) Consider an Incentive program whereby you can reward the customer with a free certificate for: $300 in Gas or Groceries, free vacation, hotel and/or airline tickets. You can try Restaurant.com as a source of certificates or http://www.creativemarketingincentives.biz/

This can be used for MULTIPLE purposes. In-home estimates? Offer reward. How about referrals? Current client refers and gets certificates. Renewals? Anniversary-one year client appreciation. How about surprising new client with $25 restaurant certificate? Very nice way to create a wow moment.

8) Consider implementing an Auto Pay only option for new customers. You can give them a choice of paying automatically via check or credit card. Stress all benefits .

9) Consider posting posters with testimonials from current Autopay users bragging on the benefits of not having to remember to write a check each month. Put these on your website and any brochures/customer correspondence.

10) Offer a raffle for 3 month’s free service to the winner or $100 cash card etc. You only get a ticket if you are a current AutoPay user or you switch over.

11) To incent customer to choose the ACH option over credit cards consider a fee increase for credit card related payments (same price for ACH)

12) REWARD your employees that recruit clients to AutoPay. $25 gift card, restaurant certificate, an hour off work? Be creative. This is a GREAT way to offer your team a shot at extra money. You may even uncover a natural salesperson you have working for you.

13) Tout the benefits: 1-The environment: no more paper invoices/reminder letters/paper checks/bank trips etc etc. 2-You want to focus on providing the best level of service possible.

The less time you spend on admin stuff the more you focus on customer needs. Especially for non-profits the net benefit to the charity/church etc should be stressed.

14) Charge an admin fee [eg an extra $5/month] for NOT using AutoPay. Hit people in the wallet.

15) POS sign up: If you are in a client’s home and can close your sale pre-sell them on Autopay and present it as the best option [use our education piece that details how electronic payments are MUCH safer than paper checks or mailing in payments.

You typically have two options on how to set up recurring payments. The first would be to leverage your existing business software or SAAS platform. Many software platforms today offer integrated payment processing solutions using an ACH Payments API. You may also use a stand alone Virtual Terminal that is specifically designed to manage recurring payments.

A concerted effort by your whole team can yield massive results that make you a more profitable, efficient, process driven, valuable business so get started.