In my business, we collect debts for several membership-based clients. Often their customers have problems with paying, these are for various reasons;
- like they didn’t use the service,
- they can’t afford it or
- it wasn’t what they were expecting.
If you run a membership-based business this can cause all manner of problems when it comes time to collecting the money from your customers.
Most membership type businesses have a mandatory twelve-month contract, however, if you are just starting out I would recommend it. A one-year commitment is fair, as there are overheads to cover. The collective of customers is what keeps the cash flowing in to keep up the standard expected.
We collect for business coaches, mentors, and online training companies. Signing up online for a membership-based service has been made easy with the technology now available. Making sure your customers pay is another ball game.
When a customer signs up for a mentoring or an online membership program, make sure your payment terms are very clear. it must be recognised that a lot of effort has gone into putting the program together and the customer has an obligation to pay.
If a customer fails to turn up to the training and does not take advantage of the information provided, why should you be penalized by them refusing to pay?
Selling from the stage is a great way to build revenue for a mentor or coach. Following are some tips I have learned from my experience collecting debts for this type of business.
1. Make sure the information provided in the contract by the customer is correct, get your salespeople to take their time with the signup process.
2. Test the phone number before they leave! Yes, I mean this.
3. Carefully explain the cancellation or refund procedure.
4. Take a deposit from the credit card that is on the contract. This will ensure you have the correct numbers.
5. Check that the card doesn't expire before the end of the contract.
6. Swipe the card on an old fashion swiping machine. Or take a photo of the card on the contract. You must get the numbers right. reads the terms and conditions when they buy these services, but it is important your terms and conditions are clear, especially when it comes to customers defaulting on payments.
People rarely read the terms and conditions when they buy these services, but it is important your terms and conditions are clear, especially when it comes to customers defaulting on payments.
Lastly, and most importantly, once a customer comes on board with your membership based business be consistent with the message on your policies, returns, and conditions.
Remember that your terms and conditions set the standards of your business.