A successful cash flow system is essential for business success in 2018. In fact, a recent research by a US bank revealed that cash flow issues account for 82% of small business bankruptcies, according to Entrepreneur.com. Many small to mid-sized businesses still struggle to manage a good cash flow system, despite its significance.
A company can use a variety of strategies to increase cash flow and debt collection. Offering early payment discounts, providing a variety of payment choices, reminding customers via phone, or mailing letters are a few of the most popular. These conventional methods can be very expensive and time-consuming. What therefore is the answer for companies looking to increase cash flow without sacrificing resources? Reminders for SMS payments!
Why SMS is the best method for reminding people to make payments
According to studies, SMS payment reminders increase loan payments made on time by a remarkable 7-9%. After using SMS reminders, the average number of late payments is also decreased by two days each month. Considering how simple and inexpensive it is to send SMS online, they are some very convincing figures. You might wonder why SMS reminders work so well.
SMS has a high response rate and is straightforward.
Businesses may communicate instantly and interactively with SMS. According to Morgan Stanley, SMS messaging is the most efficient way to communicate with your clients because more people possess mobile phones than cars worldwide and because over 90% of individuals always keep their phones close at hand. With a 98% open rate, SMS is one of the most widely used gadgets on the planet, increasing the likelihood that your payment reminders will be seen compared to other methods.
Additionally, SMS enables you to communicate with your clients even when they are not in the nation or at their workstation. In addition to avoiding email spam filters, it is more straightforward than postal mail.
Delivery and receipt times
Time is of the importance when it comes to debt collection. It only takes a few minutes to generate and send SMS reminders online with SMS software. Compared to emails, which typically take 90 minutes to respond, 95% of SMS messages are opened within the first few minutes of being received and have an average response time of only 90 seconds. In comparison, it can currently take up to six days for traditional techniques like postal to be dispatched in Australia, which can make it extremely challenging to promptly recover receivables.
Economical
It can be expensive to post reminders for payments. It can cost more than $5 each reminder when administration, printing, and postage are taken into account, and there is no assurance that it will be received. Reminders for SMS payments can significantly save these expenses. Online SMS sending saves administrative time, eliminates the need for printing, and costs only a few cents each SMS. For many firms, calling clients to collect debt can be a costly and resource-intensive procedure.
Boosts client satisfaction
Compared to more conventional techniques like contacting or sending a letter of notice, SMS reminders are generally regarded as less intimidating and confrontational. This improves the general brand experience for your customers. Since 85% of students prefer SMS as a customer support alternative, SMS payment reminders work especially well for younger audiences. Additionally, most consumers will value the chance to be warned before they incur penalties if they fail to make their payments on time. Customer retention may improve as a result of fewer complaints over late penalty fees.
A few more things to think about
The timing and format of reminders frequently affect how quickly repayments are made. The client’s name, your company name, the amount owed, the precise due date, and the payment method should all be included in an SMS payment reminder. Creating the ideal SMS payment reminder is easy with SMS software. The timing of your reminder may also have an impact on the outcome of the payment. The ideal time to send an SMS is 24 hours prior to the due date, therefore send your customized SMS reminder 24 hours in advance. SMS software allows you to plan messages ahead of time, freeing up your company to work on other projects.