Smart Banking Guide

Lured Money Payment by Offering a Carrot

Written on August 13, 2009 – 10:19 PM | by dodolovesme

While debt collecting consideration should also be given to preventing debts from ever becoming a problem.

But there is a very successful means of getting your money in on time, every time, and that is by providing an incentive for prompt payment. In other words, you reward customers who pay within 14 days.

The nature of the incentive provided would be outlined on your invoice.

Here are some incentives well worth considering…

Scratch Cards and Viva Games Scratch Tickets

Everyone knows their chances of success are extremely limited, but the possibility of a major win is always there. Other advantages are that they’re inexpensive and easy to distribute. For around $2 you can provide a very effective incentive for prompt payment of your account.

Monetary Rewards

Your invoice can illustrate to customers that they need pay a lesser amount if they pay within the required 14 days. Your invoice will show both the actual and discounted amounts so that customers can see the benefits of paying on time. The important thing is that there is a noticeable difference between both amounts illustrated.

Lucky Draws

Your invoice may advertise that all accounts paid by a specified date will be eligible to win a return trip to an exciting destination, or an equally attractive prize. Providing the reward is sufficiently attractive, and the winner is advertised, this form of incentive has a very impressive track record for getting accounts paid on time.

Bonus Points

When customers pay within the required 14 days they’re allocated bonus points. When sufficient points have been accumulated, the customer selects a prize from a published list of prizes. Each prize requires a different number of bonus points.

Planning the lure – your carrot

The introduction of incentives requires careful planning. A poorly conceived and orchestrated incentive plan runs the risk of being a failure and damaging to your relationship with customers. So, take note of these points…

Communicate your plan to customers

The introduction of your incentive plan will require a lead time sufficient to inform customers about it. This education program should attempt to answer all anticipated questions and leave the way open for further customer queries. Don’t make changes without telling customers about them.

Include details on your invoice

Your invoice should carry details of the incentive plan and would be accompanied by a disclaimer should a dispute arise in relation to any part of the administration of the plan. Ultimately, it will be your decision about the giving of any rewards.

Keep accurate records

You must be able to access information on all aspects of the plan. If possible assign this responsibility to one person. Keep in touch with this person to make sure that the plan is operating successfully.

Advertise results

All participating customers must have an opportunity to access results. Depending on the size of your community and the nature of the incentive plan, you may decide to publish the results in the local media or advertise the results in the window of the local store.

It’s imperative that all participating customers are kept up- to-date with all relevant information. But you need to make sure that the plan does not become restrictive and more trouble than it’s worth. However, don’t neglect making personal contact with winners. These are the people who’ll be recommending your business to others.

Vary the plan

Incentives are far more effective when they’re introduced for limited periods only. People can tend to lose interest in incentives after a period, so this needs to be monitored carefully. Alternatively, you may decide to introduce a different incentive every 90 days.

Be open about the success of the plan

Remember the incentive has been introduced for a specific purpose. If it’s not getting people to pay-up in 14 days, cut your losses and get out of it. Just be sure to tell customers why you have acted in a particular way. However, this is unlikely to occur if you’ve thought through the plan before its introduction.

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Tags: bank payment, bonus points, business, community, credit payment, customers, education, games, incentive for prompt, incentive plan, incentives, information, invoice, media, nature, people, personal, plan, points, results, time