2025-02-17 14:24:44
Conducting well-thought-out research is of critical importance when starting your entrepreneurial journey. It ensures the success of your business in the long run and enables you to secure your position in the market. However, it’s essential to align your research with business goals to access valuable insights.
Your research may facilitate your access to different types of data and fuel diverse business decisions. Knowing the kind of research you’re conducting helps you extract useful findings and implement them effectively.
In this article, we will be discussing the differences between market research and consumer research. The goal here is to help you analyze market and consumer dynamics by educating you on research distinctions and their respective importance.
So, without further ado, let’s start.
You can’t start or run a successful business without market insights. You need to be familiar with the latest trends in order to come up with winning solutions and stand out from other players in your respective industry.
Conducting market research helps you discover viable business opportunities. The data enables you to test the acceptability of the services you offer, which helps you assess the viability of your business idea.
Market research provides you with relevant insights regarding the competitive landscape and barriers to entry or exit. These insights are highly valuable for aspiring entrepreneurs when they start their journey.
Furthermore, you get to analyze the demand for the solutions you intend to offer to your target market. Market research gives you insights into your competitors’ current standing and market shares, letting you learn the strategies they deploy to engage the intended audience.
Also, you get familiar with the current best practices that help you build a sustainable business from the ground up. Hence, market research plays a pivotal role in ensuring success for existing and aspiring business owners.
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What excites people keeps changing over time. The same goes for their needs and preferences. Over time, the pain points representing diverse audience segments may vary. So, the solutions they sought for their problems may lose their relevance.
Consumer research helps you know your customers and be familiar with their changing goals. As you understand the needs or interests of the intended audience, it becomes easier for you to offer personalized solutions.
Consumer research helps you classify your current or potential customers with respect to different demographic and psychographic characteristics.
You can design different buyer personas based on the insights, which paves the way for you to come up with stellar product development and marketing strategies.
Conducting consumer research means learning about your audience’s motivations or expectations and understanding why they will prefer you over other alternatives in the industry. This helps you embrace a customer-centric philosophy, making it easy for you to tailor your solutions to what your customers prefer.
As a result, you ensure continuous improvement and establish lasting relationships with your target audience.
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Now that you know about market and consumer research, let’s dive into details and discuss the key differences between the two.
The first core difference between market research and consumer research is the purpose of conducting each.
Your goal when conducting market research is to gather relevant insights about your respective industry, including the latest trends and best practices, based on which you can offer solutions that meet the set standards.
You strive to learn about your competitors and other external factors that may affect your business performance. Market research also helps you identify new business opportunities and untapped market segments.
Consumer research, on the other hand, helps you get acquainted with the needs or preferences of your target audience.
Your objective is to gather useful information that helps you understand consumers’ psyche and buying behavior. You want to identify the pain points of the intended audience segments and learn about their motivations to make buying decisions.
When your goal is to access relevant market insights, leveraging secondary research serves as the best course of action.
The type of data you gather while conducting market research helps you monitor demand fluctuations, track economic changes, identify emerging trends, assess regional demographics, explore new opportunities, and so on.
The sources that facilitate your access to such data encompass expert opinions, industry reports, and government documents.
On the contrary, you should conduct primary research when you want to learn about consumers and their buying behavior. The data you gather helps you understand why consumers prefer certain products or services over others.
The best way to collect such data is to conduct surveys or interviews. Participating in focus group discussions may also help, enabling you to explore demographics and psychographic factors influencing consumers’ buying decisions.
Another major difference between market research and consumer research is the implication of the findings or insights.
The results you generate by analyzing market research data fuel your business decisions and operations. The insights enable you to come up with viable strategies that ensure the survival of your business in the long run.
You try to stand out from other players in the industry, making sure that you cash in promising opportunities before your competitors do and develop a tolerance to adverse market conditions.
Consumer research, on the other hand, is all about becoming customer-centric and building a strong brand.
The findings from consumer research pave the way for you to ensure continuous improvement and offer solutions tailored to your audience’s needs. You strive to offer seamless and personalized experiences to your target audience, establishing lasting relationships with them.
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Market research and consumer research fuel different decisions for your business and help you come up with viable strategies.
While market research encompasses a broad perspective that helps you understand the market factors and dynamics of the industry in which you operate, consumer research narrows things down and focuses on the audience segments that you may consider targeting.
It helps you come across the pain points of your current and potential customers, enabling you to offer an enhanced buying experience. Each type of research is essential and facilitates your access to valuable insights that cultivate data-driven decision-making.
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2025-02-15 14:17:42
Your headline acts as the gateway to your content, immediately informing the website visitor whether they’ve found what they are looking for or not. Creating a clear and catchy headline is vital to the success of a landing page, setting the tone of what is to come and offering a solution to the problem the user is hoping to solve.
For most viewers, your headline is the first thing they see. With this in mind, we’ve put together a guide on how to craft creative, engagement-driving headlines that captivate visitors enough to encourage them to stay.
It takes about 0.05 seconds for users to form an opinion about a website, so it’s safe to say that first impressions count!
When a user lands on your website, you don’t have much time to grab their attention, so grabbing their interest is a necessity. People immediately want to know whether your site will answer their question or provide what they’re looking for, so this needs to be clear upon first glance.
Less is more when it comes to catchy headlines. In fact, 88% of landing page headlines are less than 10 words–nobody wants to sit and read a lengthy title.
With the headline of a page being the first thing someone is faced with when arriving at a site, it’s role is to immediately show what the page is all about. Without a catchy title that aligns with their needs, you risk the user clicking straight off the page and going to the next website.
In this article, we delve into the type of headlines you can craft to maximize engagement and encourage site visitors to keep on scrolling down the page, providing real examples of websites who display powerful headlines.
When it comes to designing your landing page, every one of your headlines must stand out in order to grab the attention of site visitors.
Experimenting with different headline styles can help you decide on the most effective way to engage your audience. Here are some of our favorite ways to grab attention and drive conversions:
The addition of statistics is always a powerful approach, building trust in your words through concrete facts. By including the results of research in your headline, the viewer is instantly drawn in as they can see the success of your offering for themself.
Using your most powerful statistics in the headline will help you stand out from the crowd thanks to the unique figure that shows your expertise as a brand.
For example, Gocompare shows how much they saved for their customers through their excess refund reward, encouraging more consumers to opt for them when choosing a car insurance provider.
Consider what problem a user would have to make them arrive on your landing page, and highlight this in your headline to emphasize the fact that your business can offer a solution.
Whether it’s a product to help make life easier or a service that can save them time, fostering a problem/solution layout will quickly show site visitors that they have found what they have been looking for.
In some cases, site visitors may not even realize they needed your offering until they see it. By cleverly wording your headline in a way that offers them a solution, you may be able to maximize conversions through your content alone.
The below example is a relatable headline to renters who are frustrated by feeling they are not using their money wisely. By speaking to the emotions of this audience, the viewers are more likely to turn to the company in the hope of a home-buying solution.
Instead of wasting valuable page space talking about your story and the features of your offering, sticking with a short and snappy headline that answers user needs can be all it takes.
This is a great tactic for businesses who have a single service or product offering, getting straight to the point and providing consumers with the answer to their problem.
In the below example, WeightWatchers know that visitors to their site are looking to lose weight. Instead of stating the obvious, they tap into the fact that losing weight doesn’t have to mean cutting out their favorite snacks, giving them a competitive edge over competitor brands.
By encouraging a viewer to take quick action, the decision-making process is shortened as they know they have to act fast.
Whether you have just released a limited edition product, started a time-sensitive promotion, or are on the verge of selling out stock, using urgent sales language in the headline of your landing page will make the viewer feel like it’s their last chance.
This method is effective when targeting consumers who are shopping around to find their best option. By highlighting the deal that gives you a unique selling point, your brand jumps out as the best place to choose.
A promise-based headline consists of a bold claim that asserts confidence in your product or service. It goes beyond just explaining what you offer—it makes a declaration of results.
By using strong language that shows your promise to deliver value, the customer will feel a sense of trust that you are experts in the field. This approach creates an expectation of excellence and encourages users to take action.
For example, Apple used a short and simple headline which indirectly promises that the product is more than just functional, but designed with the customer in mind.
Whether you want visitors to your landing page to sign up to your newsletter, start a free trial, or make a purchase, steering them towards this action through your heading will help guide them through the funnel.
Using direct language in your headline will make the purpose of the page crystal clear so users will know exactly what they have to do in order to get the outcome they are searching for.
The below example from Revolut highlights how using their service will transform their finances, encouraging site visitors to download their app.
With so many types of heading to try out, it can take some time to figure out which works best for your business.
A/B testing consists of creating two versions of the same landing page but tweaking the headline on each. By using each of the landing page links an equal amount, it will provide valuable insights into the success of each. Significant differences in key metrics such as bounce rate, click-through rate, and conversion rate will reveal which of the two headings has provided the best response.
By trialing different headlines and putting them to the test, guesswork is removed from the equation. These tests can be tweaked where needed to finetune the headlines and find the approach that works best for your business.
When it comes to creating a headline for your landing pages, there is much more to it than initially meets the eye. In a world where the web is full of content, your catchy headlines can have what it takes to stand out from the crowd.
To encourage site visitors through the sales funnel, ensure your headline steers them in the right direction and highlights what you are offering them. Whether it’s a solution to their problem or a promotion they simply can’t say no to, your headline sets the tone for the whole user experience.
By putting that bit of extra time into your content and trialing different approaches through A/B testing, watch as your engagement rate grows!
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2025-02-13 14:52:54
Affiliate marketing has quickly become one of the best ways to boost traffic, drive revenue, and establish trust with your target audience.
It also gives business owners and marketers like you an opportunity to connect with other creators and have them promote your product or service. In exchange, affiliate partners get a commission every time they convince someone to check out your brand or buy a product, which makes this a win-win situation for everyone.
If you’re wondering just how popular affiliate marketing is, consider this: 16% of all eCommerce orders in the United States and Canada are from affiliate marketing.
That’s a lot of online shopping!
I believe this shows that brands across all industries have the potential to see results with the right affiliate marketing strategy.
Below, we rounded up specifically how affiliate marketing can help you take your business to the next level. I’ll also share a few common pitfalls that you should keep an eye out for on your journey and how to avoid them.
But first, let’s look at some of the key benefits you can expect if you decide to add affiliate marketing to your existing marketing plan.
Affiliate marketing is one of the best ways to drive traffic to your website and grow your email list.
When you work with creators who share your target audience, you can multiply your reach and connect with people who otherwise might not know you exist. The reason this is so effective lies in your shared audience.
Connecting with creators who have a similar audience ensures that their audience will find value in your content and product and, as a result, are far more likely to take action on your site.
For instance, a vitamin company might decide to work with a health and wellness influencer.
By simply working with the right affiliates, you stand a good chance of seeing more eyes on your site.
Bonus Tip: Offer exclusive discounts or early access to new products as incentives for affiliate promotions to drive more traffic. Creating a sense of urgency and exclusivity is a great way to boost traffic from affiliate links.
Affiliate marketing is less expensive than traditional forms of marketing, such as PPC or mass-quantity email marketing. What makes it so great is generally, you’ll only pay for real results.
Once your affiliate program is up and running, you’ll only pay partners when they manage to convert someone into a lead or paying customer.
Since you’re saving so much money in marketing, it’s no surprise that affiliate marketing offers an impressive return on investment (ROI). In fact, we found that 24% of marketers prefer affiliate marketing over other strategies based solely on the ROI.
Even if you decide to go the route of paying influencers to promote your product in combination with affiliate marketing, you’ll still save a ton of cash.
Bonus Tip: If possible, work with smaller influencers that have a more niche audience. Not only are they more affordable, but it’s often better to reach 2,000 people who are interested in your product compared to 10,000+ if most of them don’t care about your brand.
Working with respected affiliates and influencers gives your brand instant credibility. When a trusted source recommends your products, their audience is much more likely to view your brand in a positive light.
This sort of social proof and support builds trust and results in more sales.
Think about it this way: are you more likely to try a new product from a regular ad or from the recommendation of a blogger you trust? Odds are, you’d go with someone you know!
Your audience feels the same way. They aren’t opposed to trying new products or services, but they need someone they trust to suggest it first. And that’s exactly why working with affiliates can help you improve your credibility and build a positive image.
Bonus Tip: Be careful when researching potential affiliates to make sure their values and audience fit your brand. You don’t want to end up in a situation where you’re partnered with someone who is controversial or has values that don’t align with your brand.
The traffic from affiliate marketing normally has better conversion rates than that from other sources. This is because affiliates choose their audience carefully and show your products to people who are already interested in your industry.
I like to think of it as the difference between promoting your product on the sidewalk versus having a specialty store with a big sign out front. The people who walk into your storefront are instantly more likely to do so, but compared to someone who is just passing your stand on the street,
It also helps that most affiliates offer the product or service they’re promoting with a discount. We found that 83% of people say the number one reason they’ve bought from an affiliate partner is because they wanted to take advantage of a special offer.
Bonus Tip: Give affiliates good marketing materials, like strong product descriptions and attractive banners, to help them highlight the benefits of your product or service. Giving your affiliates the right tools allows them to show off your products well and increase sales.
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Affiliate marketing is easily scaled. As the size of the business grows, new partners in the affiliate program can easily be added to help you improve brand awareness, sales, and much more.
This offers you the flexibility to change with the markets and reach more people without the need for a lot of money at the start.
This is in contrast with traditional advertising, which requires a higher budget to reach more audiences. Affiliate marketing allows a business to scale its marketing over time, which makes it feasible regardless of your current income.
Bonus Tip: The use of affiliate marketing platforms and software makes it easier to manage your program and figure out how your affiliates are doing. Automation tools save you time and resources, allowing you to focus on long-term growth. Analytics can help you figure out which affiliate links are doing well.
Adding affiliate marketing to your eCommerce plan helps you make money in different ways. With an extra source of income, you are less dependent on a single source, which can give you some much-needed peace of mind.
This can be particularly helpful if you’re just starting out and looking for a low-cost way to make more money.
Bonus Tip: Check out various affiliate networks to find which one will be best suited for your business and audience. They all have unique features and benefits, so explore your options and choose a program that aligns with your needs.
With affiliate marketing, there are just as many challenges as there are opportunities. Understanding these obstacles—and how to address them—will ensure the long-term success of your program.
That huge number of possible affiliates might overwhelm you, but remember that not all partners are created equal. It all comes to finding affiliates that best align with your brand and have a similar target audience.
My advice is to research blogs in your industry, connect with social media influencers, and come up with a program that rewards partners for getting people to buy from your site.
It’s a good idea to start slow so you can manage and grow your affiliate strategy alongside your business.
A good affiliate program is all about building relationships; your affiliates are simply external partners, an extension of your brand. The more knowledgeable and supported they are, the better they will perform.
Keep them updated regularly with promotional materials and performance feedback. This will ensure you’re all on the same page, which generally leads to better performance.
It’s also a good idea to coach them and give them praise when they do well. This type of relationship building is how you end up with partners who are happy to promote your brand for years to come.
Other important areas include compliance: Here, affiliates are supposed to make sure that they comply with the law while observing ethical behavior when promoting products.
In this respect, communication is key. Come up with an agreement that articulately explains practices considered acceptable, including proper disclosure and adherence to your brand guidelines.
At the same time, affiliate behavior needs monitoring. Use tracking to make sure the promotions are really meeting your expectations and that people are happy to see your brand.
With the growth of affiliate programs, the likelihood of market flooding now exists. Too many affiliates promoting one single product will certainly dilute its potency and exclusivity.
Offset this by considering a segmented affiliate network. This will keep your messages fresh and exclusive since affiliates can be assigned by product line or demographic segment.
Affiliate performance can change due to seasonal or market trends, or it can be an individually based factor. You might not know what to expect at first, so take things slow and monitor your results.
You might learn that a vast majority of affiliate sales happen during the second half of the year. This is totally fine, as long as you’re ready for it.
You’ll also want to consider developing a diversified network to help when one segment of your affiliates starts to slow down. When done correctly, this can keep your program running smoothly all year long.
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Affiliate marketing has the power to transform your eCommerce business by providing effective traffic, better conversions, and long-term growth.
You’ll want to find a mix of strong partners, nurture relationships, and work together so they can easily and effectively explain to their audience why your product or service is worth their time.
It will take some time before you have a full-fledged affiliate marketing program. Because of this fact, the best thing you can do right now is get started.
Once your affiliate program is up and running, I believe you’ll see impressive results that bring you one step closer to your goals and help you take your business to the next level.
Image by Adobe Stock
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2025-02-12 14:45:36
Verizon Small Business Digital Ready provides exclusive networking opportunities and digital skills training, from courses to live coaching sessions to personalized learning plans.
Interested? If you have not yet joined the Digital Ready program (it’s free and easy), you can do that here. That’s your first step.
The program also provides $10,000 small business grants at certain times of the year. Though the latest grant period has ended, stay tuned for news on when a new round will open up in 2025. Even if you don’t secure a grant, joining Digital Ready and taking advantage of the tools and resources the program provides is a smart investment in your future.
These events and courses are for the rest of February. They are just a sample of the program’s benefits.
Cybersecurity unlocked: Protecting your business in the digital world
Online reputation management
Web design that converts
Finding profitable customers
Determining your prices
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The customer journey: How to inspire customer loyalty
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A dynamic, interactive series designed to help small businesses stay on track and break through roadblocks. Connect with a community of like-minded individuals bi-weekly in either the morning and/or the evening to share your goals and receive guidance and encouragement from your fellow Digital Ready small business peers. Join us to tap into the collective power of community accountability.
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2025-02-11 14:13:51
In business, first impressions are critical. Whether you’re trying to secure funding or building new partnerships, a pitch deck is often the first opportunity to demonstrate your value, convince your audience to take action, and make an impactful first impression.
Research indicates that appearance influences how people perceive things and respond to them. This means that while the content of your pitch deck is essential, the design is just as important in conveying your business’s professionalism and credibility.
As a presentation design agency, we understand the ins and outs of creating and successfully presenting pitch decks. These are some of the most important benefits of a well-designed pitch deck.
A visually appealing, well-structured pitch deck can draw your audience in from the first slide. The more engaging the design, the more likely investors, clients, or partners will stay focused and absorb your message. When everyone is vying for the same opportunities, a unique design helps your business stand out and make an impression that lingers after your presentation—especially since you only have about 8 seconds to grab your audience’s attention.
A pitch deck should simplify complex ideas for audience members, and design plays a massive role. You can break down dense information into digestible, impactful pieces using visuals, graphs, and clean layouts.
Visual storytelling can be another helpful tool—using images and graphics to guide the audience through your narrative can help ensure your message is clear and memorable.
A well-organized pitch deck allows you to structure your story effectively, keeping the audience engaged and making your case stronger slide by slide.
A polished, professional design does more than look good—it signals that you’re competent and serious about your business. Consistency in branding, using cohesive colors, fonts, and visual elements, is vital to reinforce your brand identity for audience members.
Well-presented data is equally important. Presenting key numbers and statistics visually can help with comprehension, ensuring your audience understands and remembers the numbers that matter most.
How you design your pitch deck can draw connections between your narrative and the visuals and create an emotional response in your audience.
For example, your color choice can completely change someone’s interpretation of your presentation. This is because most people in a shared culture assign psychological meanings to each color. Think about how different you might feel watching a presentation that’s primarily red versus one that’s predominantly blue. In the Western world, red is associated with passion, energy, and danger. Blue is associated with calmness and trust. They each send different messages.
The visual shape, layout, images, and pacing of your design elements can also affect your audience’s response to your presentation.
A clean, sleek design reassures investors and potential partners that you are prepared and professional. When your financial slides are easy to understand, it inspires confidence in your business model and prospects. When your brand elements are consistent, it shows that you have a deep understanding of your business identity and goals and that you put time into the work you do.
A well-structured deck communicates that you have anticipated audience questions and are ready to provide clear answers. This level of preparedness can make all the difference when building trust with investors and partners.
A well-designed pitch deck is not only about delivering information—it’s about encouraging action. Whatever your goals, clear and strategic calls to action throughout the deck can guide the audience toward a decision. Thoughtful design can help your key points stick, keeping your business top of mind when it’s time for decision-making.
Just as a thoughtful, polished website works as a business’s online storefront, a compelling pitch deck mirrors your company’s vision, clarity, and dedication to help lay the foundation for long-term success.
By investing in professional design, you can ensure your message lands effectively and resonates with your audience.
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2025-02-10 14:51:44
Late payments, write-offs, and invoice errors put a serious strain on your cash flow. But, for B2B companies, requesting payment up front can lose you customers. By using automated billing and collections, you can offer flexible payment deadlines while reducing the risk of delayed and unpaid invoices.
What is automated billing and collections, though?
It’s the practice of using software to eliminate inefficient, error-prone manual invoicing and payment follow-up tasks, creating a streamlined accounts receivable (AR) process.
It also aims to incentivize customers to pay early by offering the flexibility and convenience that they want. In turn, you can minimize late and overdue payments and, ultimately, get paid faster.
In this article, we’ll explore how you can use automated billing and collections to optimize your cash flow for long-term sustainability.
An automated billing and collections process can be implemented to achieve various goals. But which strategies are best for improving your cash flow and remaining sustainable in the face of customer demands for increased flexibility?
Let’s get into it.
Recurring billing is a payment method that automatically bills customers according to an agreed-upon schedule (e.g., monthly, quarterly, or annually). It removes the hassle of manually creating invoices every billing cycle and reduces the risks of missed payments and invoice errors.
Recurring billing also has some serious cash flow benefits for businesses that offer subscription-based products or services.
Subscription-based pricing models are a type of contract in which your customers agree to pay a specific, recurring amount in return for a product or service. This generates predictable revenue, stabilizing your cash flow.
Oh, and customers love subscriptions. In a recent survey by PWC, consumers cited convenience, cost-effectiveness, and consistency as their top reasons for subscribing. By automating recurring billing, you can attract and retain more customers, leading to a healthier cash flow.
To set up recurring billing, leverage business invoice software. Automatically generate and send recurring digital invoices, track invoices in real time, and accelerate collections with convenient online payment options, reminders, and more.
When customers make late payments, your cash flow suffers. And unfortunately, late payments are a common occurrence.
Research from Atradius discovered that 55% of all B2B invoices are paid late, causing businesses to suffer from cash flow issues and liquidity shortfalls. It drains productivity, too, as teams are forced to abandon their other duties to chase customers for owed capital.
Automated payment reminders and notifications can significantly reduce late payments. Using invoicing software, you can schedule payment reminders to be sent to customers at specific times, such as when they’re nearing their due date or on the date of their deadline.
You can even schedule notifications to be sent at regular intervals to encourage early and timely payments.
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If you use separate billing and accounting receivable systems, integrate them to synchronize their data flow. This reduces the risk of manual errors that commonly occur during data transfer, ensures that bills are sent out in a timely manner, and improves your cash flow by enhancing visibility of invoice statuses and expenses.
Similarly, you should consider integrating your accounts receivable solution with your customer relationship management (CRM) system to unify payment and customer data. With access to customer records within your AR system, you can create personalized invoices and track individual payment statuses with more accuracy.
Customers want to make payments via the method that’s most convenient to them. If you don’t support the payment method they prefer, they’re more likely to put off paying until the last minute, negatively affecting your cash flow.
There are plenty of payment methods available, so try to offer a variety. Popular payment methods include credit/debit cards, digital wallets, ACH wallets, and online payment gateways.
Online payment gateways are especially popular for facilitating recurring payments. When deciding on an online payment gateway provider, aim to choose one that’s secure, intuitive, and convenient to streamline customer experiences.
As well as offering multiple payment options, remember to include the payment options that your international customers prefer. In doing so, you remove payment barriers, align your payment processes with your brand experience, and boost revenue, all of which help you sustain a healthy cash flow.
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What happens when customers fail to make a payment by the due date? Before automation, you’d have to manually follow up with customers, which is time-consuming and frustrating. But with automation, you can set up a tiered escalation process that’s triggered as soon as a customer’s invoice becomes overdue.
For example, you might send an automated reminder to a customer on the first day of the overdue payment. From there, you could send notifications at regular intervals, such as every day or every few days. This may include an updated outstanding balance if the customer is subject to late fees (the best accounting software solutions can automate these calculations for you).
Eventually, the overdue debt might be escalated to a phone call, a legal letter, or a collections agency, as per your pre-determined escalation rules.
With an automated escalation process in place, you can efficiently and professionally recover overdue payments without incurring the stress of manually chasing customers.
Early payment discounts incentivize customers to pay their invoice balance early, speeding up collections and reducing overdue payments. It can even foster a mutually beneficial relationship between you and your customers, which is key to maintaining positive, long-term relationships that drive consistent revenue.
The most common type of early payment discount that businesses offer is 2/10 Net 30. This simply means that if the customer has 30 days to pay their invoice but they pay the full balance within 10 days, they’ll receive a 2% discount. That said, the discount percentage you offer and the number of days you extend it are completely up to you.
Even better, you don’t have to make these calculations yourself. Automated billing systems can automatically apply early payment discounts when customers pay within your predetermined time frame.
Late payment fees and penalties can also be applied as a way to encourage customers to make payments on time.
On your invoice, clearly stipulate that if the customer fails to pay by the deadline, they’ll be subject to a late fee. Typically, this is around 1-2% monthly interest rate on the outstanding balance. This tends to deter customers from paying late and can even incentivize earlier payments, contributing to a healthier cash flow.
And, similar to early payment discounts, late fees can be automatically applied to overdue invoices.
Market shifts, customer preferences, new technologies, and seasonal demands all impact customer payment behavior. If you’re not tapped into current payment trends, you risk missing out on opportunities and overlooking critical issues that are hurting your cash flow.
Automated billing systems provide insight into your unique payment trends, with the ability to track AR metrics in real time. Key AR metrics to track include days sales outstanding (DSO), which tells you how quickly customers pay their balance, and average days delinquent (ADD), which tells you how long it takes customers to pay overdue invoices.
Automated systems also use AI and machine learning to identify patterns and correlations in payment data. Through comprehensive, AI-generated reporting and analysis features, you can access key insights to make informed, strategic payment decisions to optimize your cash flow for long-term sustainability.
By leveraging accounting software to automate billing and collections, you can wave goodbye to inefficient manual invoicing processes, late payments, and cash flow issues.
At the very least, you should set up automated payment reminders and escalation processes to reduce late and overdue payments. Other strategies, such as early payment discounts, multiple payment options, and recurring billing, are also key to promoting timely payments, retaining customers, and maintaining a healthy, predictable cash flow.
So, if you’re looking to improve your cash flow while still offering the flexibility and convenience your customers crave, consider implementing these seven automated billing and collections strategies.
Image from Unsplash
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