This blog post was contributed by Debitsuccess
Cashflow is essential to any organisation’s success – including gyms. At Debitsuccess, we’re the specialist at collecting recurring payments from customers through our full service billing solution so here are some things to consider when deciding to offer a direct debit option to your members:
- Frequency pays off, so give your members options
The simple psychology of the subscription model equation is that a customer feels more comfortable with paying a small amount than they do a large amount. The more frequent the payment, the smaller the amount will be.
Our statistics show that weekly payments are the most popular with customers, and also the least likely to default. Clearly, paying a smaller amount – be it weekly or fortnightly – is more achievable, so make sure you have these options available for your members.
- Flexible timing is key – fit in with your members’ lifestyles
Flexibility around timing of payments also goes a long way toward making customers feel comfortable about paying for a subscription service.
A further sampling of our statistics shows that Thursdays, Fridays and Mondays are the most preferred days for customers to pay. So, if your gym can be set up for payments on the day of the week that a member chooses, you’ll be able to attract more members. Ensuring people can pay when they want and how they want will build better relationships and help keep them coming back to pay you again and again.
- Reversals are inevitable, so don’t stress if you get a few
In data tracked from a year’s worth of subscription billing, we know to expect that a small percentage of direct debit transactions will bounce initially for various reasons, such as insufficient funds. That’s no reason to avoid direct debit plans – the important thing is that you have a method for following this up.
- Avoid credit control at your peril
Not having a robust process in place to manage credit control will mean less cash flow now, and ultimately more expense in administration costs. So it’s critical to have clear processes in place to manage credit control.
Outsourcing your billing to a third party provider can easily solve this issue, and means that your gym can focus on maintaining a great service, while your billing company manages the task of dealing with the reversals.
As with a number of industries, data security is integral to the fitness sector. Being secure and compliant with all industry regulations gives people peace of mind.
We’re an Authorised Representative under the Australian Financial Services Licensing Regime and we’re compliant with anti-money laundering legislation. We’re also an externally audited Level 1 compliant company under the Payment Card Industry Data Security Standard (PCI DSS) – so we have the policies, procedures, physical structures and technology to ensure data and credit card information is protected.
Following up on missed payments can be a huge administrative burden. And what if someone wants to change their payment schedule? Needs to advise a new address? Or has an account related query? All these aspects of managing direct debits take time.
Our full service solution saves our customers’ time and administration costs, and our award-winning customer service team is available to assist with any account changes and related queries. Essentially we offer an affordable way to increase business efficiency, profitability and growth by optimising the way payments are collected. This means you can focus on your business.
- Options, options, options
Technology allows a diverse range of options for your members to pay. It’s all about making it easy for people and maximising collections.
That’s why we have options such as PAYNOW, which allows members to go online and pay outstanding fees on their payment plan at any time, including bank account to bank account payments. What’s more, we’ve found that the introduction of this service has seen payments from outstanding customers double – a win-win for all involved.
It’s simple – once a customer has an established form of payment that they have to re-establish if they shift to a competitor, they’re less likely to move.
We’ve found that direct debit plans increase retention due to their reliability, ease of use and security guarantees.
Most businesses have existing business management software and, to make life easier, it’s important these systems can talk to each other.
Application program interface (API) integration enables us to integrate our industry-leading tools with other partners’ products and applications so we can provide our customers, including those in the fitness sector, with greater options and scope. In fact, we already integrate with a number of the gym industry’s systems.
A steady and reliable cashflow is vital to any business. Relying on large one-off payments could make your business vulnerable should these slow down for whatever reason. With an effective direct debit plan, gyms like you can rest assured that you have regular and reliable cashflow, putting an end to chasing payments and late fees.
Helping you to help your members
Having a recurring payment solutions provider like Debitsuccess on board helps gyms to help their members. It means greater flexibility, consistent cashflow and a full credit control system, saving time and money so gyms like yourself can focus on what’s really important – your members and exceptional service.
For more information about Debitsuccess visit www.debitsuccess.com.au