How Can Automation Help You Recover Missed Payments and Improve Revenue?

Introduction

Many coaching businesses face the challenge of stalled revenue despite acquiring new clients. A common reason for this is the failure to collect 100% of client payments, which can lead to significant lost income each year. Automating the payment recovery process can help address this issue effectively without harming the client relationship.

Understanding the Payment Collection Problem

When businesses take on clients, they often assume that payments will always be successful. However, it is typical to lose between 5% and 15% of payments due to various reasons. Even with a collection rate of 85% to 95%, substantial payments can go unrecovered, resulting in a yearly loss of tens of thousands of dollars. Addressing this gap requires a proactive approach to recover failed payments.

Building an Automated Payment Recovery System

The main idea behind automation is to be promptly notified of failed payments and to attempt collection without disrupting the coaching relationship. The process involves setting up triggers, flags, and communication channels that operate seamlessly in the background.

Triggering Automation

• Use Stripe's failed payment event as the trigger in a tool like Zapier.
• If not using Stripe, alternative triggers include email notifications from PayPal or other payment platforms.
• Configure the trigger to detect failed transactions and initiate corrective actions.

Flagging Clients with Payment Issues

Once a payment failure is detected, tag the client's profile in your CRM or project management tool to signal a payment issue. This can be done by:

• Adding a custom field like 'Payment Issues' with options such as 'Late Payment'.
• Creating a separate log to record all failed payments and linking it to client profiles.

Notifying the Business Team

Set up a dedicated view or dashboard showing clients with payment issues for easy monitoring. This ensures that your team or virtual assistants are alerted to follow up where necessary.

How to Approach Payment Collection without Jeopardizing Client Relationships

It is crucial to maintain a positive coaching relationship while managing payment issues. This can be achieved by handling recovery through a separate department or automated communication, such as:

• Sophisticated email sequences from a dedicated account, such as 'Sarah from Accounts'.
• Automated systems that send polite reminders without direct human intervention.
• Formal contact, particularly for B2B clients or high-ticket packages, using a finance department email that emphasizes professionalism.

Setting Up Dedicated Contact Channels

Options include creating a generic email like billing@yourdomain.com or a more professional alias. This ensures automated messages appear credible and are not flagged as spam. Consider domain-based email addresses for high volume scenarios to improve trust and deliverability.

Automating Client Communication

Integrate your email account with automation tools to send personalized, automated messages to clients regarding payment failures. These messages should include:

• The reason for the failed payment.
• Instructions to update payment details or transfer funds.
• Polite reminders that do not threaten the coaching relationship.

This process ensures clients are notified promptly, reducing the need for manual follow-up and allowing your team to focus on core coaching activities.

Managing Retries and Follow-ups

Set up your payment platform to retry failed transactions automatically at specified intervals, such as every 36 hours. Automate email notifications to clients prior to each retry, providing clear instructions for updating their payment information. Limit manual retries to prevent excessive attempts and potential flagged accounts.

By automating retries and notifications, businesses can significantly increase recovery rates while preserving client trust.

Practical Takeaways

• Automate payment failure detection using platforms like Stripe or email parsing.
• Flag payment issues efficiently within your CRM for easy monitoring.
• Separate payment recovery communication from coaching to maintain relationships.
• Use dedicated email addresses or domain aliases for automated outreach.
• Configure your payment platform to retry payments and send polite reminders automatically.

Conclusion

Implementing an automated system for payment recovery can help your coaching business recover lost revenue while maintaining positive relationships with clients. The process involves strategic setup of triggers, notifications, and flags that work harmoniously behind the scenes. With proper planning and execution, automation becomes a powerful tool for sustainable growth and revenue stability.