As a construction manufacturer, you can quickly grow tired of playing the role of payment collector to your building contractors, distributors, consumers, and other sales channel customers. Sending statements of past-due invoices can eat away at your time, due to a seemingly never-ending Outstanding Accounts Receivable. Before you think about hiring a collection agency or write off bad debt due to lack of payment, consider some other options that can make transactions smoother and faster in your sales channel. Incentive program providers like Atlanta-located LoyaltyWorks can assist. LoyaltyWorks provides some simple solutions that can promote on-time payments from your clients, customers, and sales channel partners.
How to Encourage On-time Payments Using an Incentive Program
What Can a Reward Program Do, and How Does It Work?
An incentive company’s expertise can effectively lend your company a helping hand to lower A/R turnover. Within sophisticated online rewards technology, they provide not just a great B2B marketing tool rewarding your customers for selling and promoting your products, but one that can also help encourage desirable behaviors like on-time payments. Rather than invoicing clients and customers , sending them statements, and calling their respective Accounts Payable departments trying to receive payment , you could offer them rewards for on-time, full payments.
What kind of incentives would prompt your customers to make timely payments for the building supplies they buy from you? Reward points that they can then spend in an online shopping mall. This virtual store, like Amazon or Overstock, features millions of merchandise rewards from tools and hardware to electronics and home goods. Studies such as those conducted by McKinsey & Company have shown that these nonfinancial incentive rewards are even more effective motivators than the three highest-rated financial incentives. A study in the Journal of Economic Psychology found that those who receive non-cash incentive program rewards enjoyed their rewards more and would be more likely to tell their friends about it than those who received cash.
Why Are Tangible Rewards So Effective?
Non-cash rewards like HDTVs and new grills have greater influence over your partners’ and customers’ behavior because they develop lasting, emotional attachments to those rewards. Therefore, they will be more motivated to make on-time payments if you offer them tangible rewards for doing so. Not only will this ease your cash flow woes, but it will improve your relationships with your customers and partners. Their association with your company will be a positive one and they will have visible reminders of how much they enjoy doing business with you.
Collecting payments can be tedious, time-consuming, and stressful. Lack of on-time payments can also hinder your company’s cash flow and working capital which could potential stunt growth. By using an incentive management company like Loyaltyworks, your clients will be motivated to ensure they pay on-time. Accounts Receivable collections just became a whole lot easier!