02/06/2020
10 Proven Ways to Slash Delinquency Rates & Boost Cash Flow for Your Martial Arts Business
Imagine a martial arts studio owner struggling with unpredictable payments from members.
They are constantly chasing overdue payments … stressed by the uncertainty of unsteady cash flow … worried whether they’re going to have enough to make rent for the month.
Then they turn to Member Solutions.
Through our managed billing services, we guide them with proven strategies to encourage prompt payments and reduce delinquency. And, it makes a world of difference.
With our assistance, the school owner sees significant improvement in their cash flow and they get time back in their day to focus more on teaching and less on chasing payments.
Based on our experience, we’ve put together 10 practical tips to help you achieve similar success. These strategies are designed to minimize delinquency and make collections smoother, so you can spend more time doing what you love—teaching your students.
Let’s dive in!
1. Avoid statement or coupon billing methods whenever possible.
Customers that pay by statement or coupon are 23% more likely to become delinquent than those who sign up for auto-pay. Enroll members for bank draft/ACH payment or credit card. It’s a double win for you. Members are more likely to pay on time and electronic payment options save you money.
Learn more about the benefits of ACH payments here.
2. Gather email addresses for every member.
Email is one of the fastest ways to communicate with your members. And, it has become an effective tool in delinquency management. When we send email reminders as part of our payment collections service, we provide a direct link to our member-only website where your members can make payments and update their billing information.
3. Provide a contract copy promptly when requested.
Your membership agreement is legal proof of the member’s obligation to pay. The quicker Member Solutions receives the membership agreement, the better chance we have in recovering your funds.
Want to make contract management super easy for you and your members? Use digital contracts and waivers. Our simple online sign-up makes it easy for members to enroll, renew, and upgrade from any device in less than a minute!
4. Select due dates early in the month.
If a member does miss a payment or has a declined or returned payment, there is a better chance to recover your funds within the same billing cycle if the due date is early in the month. We recommend setting the 1st or 5th of the month as the due date for all of your members.
5. Know who’s delinquent.
Our most successful clients know how and where to find this information online. Here are ways to stay informed:
1. Review the Delinquency Report at least twice per month.
2. Sign up for Email Alerts. We’ll email you and any staff member you designate whenever a member has a returned or declined payment.
3. Examine the Activity Report on a weekly basis. Not only will it provide you with a list of new accounts and funding activity, it will also list any members with an active follow up that is preventing or delaying billing.
6. Work together with Member Solutions.
The clients with the lowest delinquency percentages work with the Member Solutions billing team to make it easy for members to manage their accounts and make payments. Some clients prefer to be direct with their members, while others prefer a subtle approach. Either method will increase collection results, so long as you’ve communicated your preferences to our team.
Once you know who is past due, you can simply hand your member a Member Solutions’ business card and say “Member Solutions has informed us that they have been unable to contact you. Here’s a card with their website and contact information.” Once a member is aware that you may know that they have a billing issue, they are more likely to pay on time.
7. Ask your members to provide you with their most accurate billing information.
Have members provide their billing information to you directly, rather than obtaining it from a driver’s license or previous billing account which may be outdated. Ask the member to verify their vital billing information when they are signing the agreement.
8. Make sure that your member knows that Member Solutions is servicing the billing portion of their agreement to avoid having payments charged back.
Your endorsement of Member Solutions provides your members with a reassurance of your professionalism and commitment to quality service. Place the Member Solutions Decal in your business and hand out Contact Cards, both provided free of charge. Talk about our Customer Account Access Center website, designed specifically for your members to make payments, update their billing information, review payment history, or contact our Member Services Team.
9. Offer settlements to members who have trouble paying.
The longer an account remains delinquent, the less likely you are to receive payment. When a member is no longer attending class or using your facility, they are more likely to stop paying altogether. Once an account reaches 90 days delinquent, we recommend automatically offering the customer a settlement for a percentage of the remaining balance. This could bring you income in the form of a lump sum payment, and leave the member on better terms which could result in new member referrals or re-enrollment in the future.
10. Don’t accept payments in-person.
Generally, we discourage our clients from accepting payments in-person. Accepting payments creates more work for you and increases the likelihood that your member will receive delinquency phone calls and correspondence when they are not past-due. Worse yet, it also increases the chance of double billing your member when the payment is not reported immediately to Member Solutions.
Finally, once you accept that first payment, chances are it will occur again and diminish Member Solutions’ authority when the member decides not to pay.
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