Anyone who owns or manages a business understands how cash flow can make or break them. And for member-based organisations, getting a payment system that provides you with a secure line of cash, frees up your admin time, and importantly, really works for your kind of members, is critical.
You must make it easy for your members to pay you. Offer them payment options that allow them to chip away at their fees, taking away the hassle of having to find the cash up front, or physically pay the bill each month.
These days, people are automating so many of their regular payments to avoid late fees and to remove ‘paying the bills’ from their daily to-do list.
“Today’s consumers have become accustomed to paying for goods and services on monthly subscriptions — mobile phones, gym membership, TV, insurance and more. Now owning a new car could become a thing of the past as greater numbers of customers opt for car leasing.” – thecourier.co.uk
The Fitness Club Story
When it comes to subscription payments in member organisations, the Australian fitness industry is a great success story. During the 1990s, more fitness businesses implemented direct debit billing, giving their members the flexibility to pay their memberships over time, rather than up front. And with this secure line of cash flowing in each month, owners and operators could confidently undertake expansion plans, add new services and enhance their businesses. As a result, the sector expanded and went from strength to strength.
The Golf Club Story
But the benefits are evident in industries beyond fitness. Think about how golf clubs used to be run, for example. Their annual membership fees were scheduled at the same time each year, so they’d be heavily reliant on that massive influx of membership dollars. In the meantime, outgoing expenditure and wages would need to be managed very closely, and late payments were cause for concern.
Meanwhile, new members joining part way through the year could still be faced with paying full fees if there was more than 6 months of the year remaining—which let’s face it, would be quite off-putting for a new customer—not to mention the fact that annual fees paid in a lump sum are a major expense to budget for and a big commitment to sign up to.
Many golf clubs have since introduced a monthly direct debit billing system that has completely transformed the way they manage their cash flow, engage with their members and work on their businesses.
A Win-Win for Businesses and Members
There’s much to be learned from the experiences of these member industries, particularly as clients become increasingly technology-savvy. People are seeking convenience and flexibility with their membership payments through direct debit billing. And companies are looking to build loyalty and long-term productive relationships with their customers, which many of our PaySmart clients find is a natural bi-product of offering this kind of payment option.
So if you’re a member organisation, or any kind of business that takes regular payments from clients for products, services or memberships, it’s worth giving serious thought to the payment methods you offer them. Contact PaySmart today for more information and an obligation-free Benchmark comparison to any other billings provider. Don’t settle for less.
