One big frustration that we as business owners face is failed payments. You know what I’m talking about, you create a program, offer a 4-pay payment option and on month 2, you get a failed payment notification from one of your customers.
There are lots of reasons for a failed payment: someone may have changed their credit card, their credit card may have expired, bank issues, payment processor issues, etc. No matter the reason, it’s frustrating.
Statistics show that, on average, 10% of all Business-to-Business (B2B) and Business-to-Consumer (B2C) recurring payments fail. And it’s especially bad for those who sell information products, online training, and physical products that are shipped as 12-17% have recurring payment failures. You aren’t just losing money for that one month – failed payments are a compounding issue. You are losing money month after month. And one more statistic – 90+% of customers usually don’t come back. Over time, you are losing a lot more than you think. Looking at those stats, it’s a very real problem that we all deal with and you need to have a plan.
In this short video, I give you 3 tips that you should be implementing in your business to make sure you get paid!
One big frustration that we as business owners face is failed recurring payments. You know what I’m talking about, you create a program, offer a 4-pay option and on month 2, you get a failed payment notification.
There are lots of reasons, someone may have changed their credit card, their credit card may have expired, bank issues, payment processor issues, etc. No matter the reason, it’s frustrating.
Today’s system I’m going to walk you through a Follow-Up and Collection System to Make Sure You Get Paid
Business owners generally do 1 of 3 things when it comes to failed payments:
1. Do nothing and chalk it up to the cost of doing business
2. Use automation and hope it works
3. Use automation and poor delegation
You could always turn over this part of your business to a collection agency or a business that specializes in payment recovery, I have a resource for you down below.
But for the majority of us who may encounter this every so often, we just want a system that is efficient, automated, provides a good customer experience, and doesn’t turn our team members into collection agents.
Let me talk about the 3 tips I have for you today…
Tip 1. Have a clear check-out process.
I want you to pay attention to this part: “you understand that your membership will automatically continue and you authorize us (without notice to you, unless required by applicable law) to collect any and all outstanding receivables using any eligible payment method we have on record for your account.”
This means that in Infusionsoft, they may have two or three credit cards connected to their account, and this makes sure that I’m allowed to go in there and charge a different credit card. Make sure you have language like that in your terms and conditions.
Tip 2. Recharge settings.
In your payment processor program, make sure the settings are set to autocharge “yes,” so that cards can be retried. Default max retries – I’ve seen some set to 1 and I think that’s too low and I’ve seen it have 20, which I think is too high. Every time you go to hit a customer’s credit card, their bank might be applying charges. Reset failed autocharge attempt counters when Credit Card changes – set to yes. Because once it hits the max amount of retries is reached, it may not retry the card because it needs to be reset.
Tip 3. Have a follow-up system.
In my follow-up system I have the recharge, try the credit card three times, two days apart, if it reaches that end and there’s no update, then it applies a tag and it kicks off a campaign. This campaign in Infusionsoft is saying “when that tag is applied, assign a task to me to make sure that I follow-up. Send user the email, a day later they get email number two, and two days later they get email number 3. Each email has a link to update their credit card, it has my contact information, and gives them plenty of opportunities to update their credit card
That’s the extent of my follow-up system. This isn’t a huge problem for me – yet. I do have a failed payment every once in a great while and so I’m not losing thousands of dollars each month, but if you are, I urge you to use a payment recovery service because the reality is that the success rate is about 10-20% when you’re using an automated system.
I have a special freebie for you. It’s from my Business Freedom Guide program. I have an SOP Hub and one of those is Handling Declined Payments. This freebie walks you through a sample process for handling this. Enjoy!
Catch up on other Financial and Payment Systems episodes + resources menioned in the video:
- [Video] 6 Tips to Get Super Organized with Your Small Business Finances
- [Video] Choosing an Accounting System – Considerations & Low Cost Program Comparison
- [Video] Behind the Scenes – Setting Up Your Financial Systems
- You could always turn over this part of your business to a collection agency or a business that specializes in payment recovery, I know that Pat Flynn and Amy Porterfield both use Casey Graham’s company, Gravy Solutions. One final stat: 70% of payment recovery requires manual efforts, so if you are losing lots of money each month, give them a call.
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Did you enjoy this episode and want to put it into action? Grab this Growth and Profit Plan!
Growth & Profit Plan: Financial & Payment Systems
If you are in year 1 or year 10, it’s never too late to get your financial act together. This Financial & Payment Systems Growth & Profit Plan is about bookkeeping – recording what’s coming in and what is going out – and other systems that you can easily set up and use in your business.
I cover why tracking your numbers is so important, simple systems for setting up your business for financial success, and provide lots of helpful worksheets, letters, and resources to help save you time and be more productive.
WHAT YOU GET
The Financial & Payment Systems Growth & Profit Plan includes:
- Training video
- Business accounting worksheets
- Sample chart of accounts for coaches, consultants, and service providers
- Payment letter templates to handle difficult client situations with ease
PLEASE NOTE: Once you purchase, you will receive an email with your login/password to gain lifetime online access to your Financial & Payment Systems training.