New report: How invoicing and payments management impacts customer loyalty

In Billogram’s customer relationship report, we shared information on how customers feel about their relationships with companies in many different industries, particularly when it comes to payments. We’ve now conducted a new survey centered around questions having to do with debt management and how that impacts customer loyalty. You can read the Debt Management Report that was based on that survey here. By comparing the survey results with Billogram’s own data, we learned that many of the things we concluded from our existing customer collaborations are consistent with the survey results.

Customers who are offered automatic methods of payment become more loyal

The report revealed that approximately 60% of respondents would appreciate simple ways of switching to an automatic payment method such as direct debit from their bank account/credit card. With those types of payment methods, there is a lower risk of late payments, which significantly reduces the burden on debt management, as well as the need to send reminders.

The end consumers who participated in the survey seemed very interested in ways to make payment easier, particularly having it automated. In light of the purpose of the report, it’s therefore relevant to take a closer look at how automatic payment methods can affect customer loyalty. An analysis of data from more than 20,000 end customers shows that the churn rate is twice as high for those who pay manually compared to customers who have opted for an automatic payment method.

In other words, offering customers an automatic payment method is a way of meeting their needs and boosting their loyalty.

Getting customers to pay on time can increase their loyalty

Around 75% of survey respondents said that they occasionally missed a payment and received a reminder. Around 22% said that they worried about sometimes forgetting to pay their invoices. Clearly, most people get into situations where they aren’t aware of a payment due date and then fail to pay on time. It is also something that many people worry about. The next question then is how does affect their loyalty when they do miss a payment?

The data that Billogram has collected in its collaborations with customers reveals that churn is almost three times as high among customers who miss payments compared to those who pay on time. So, actively striving to ensure that customers pay on time not only boosts cash flow, but also customer loyalty.

Payment reminders with fees cause customers to start shopping around

Last but not least, and strongly correlated with what has been discussed above, the survey shows that for around three out of every ten respondents, getting a payment reminder with fees attached had a significant negative impact on how they felt about the supplier.

That might not seem like so many people, but important to note is that among those who are sensitive to getting payment reminders with fees, young consumers are overrepresented. Older generations are more accustomed to payment reminders with fees, but the question is whether even this group is more negatively affected than they realize.

In fact, Billogram’s own data shows that churn is six times higher among customers who receive a reminder than it is for those who pay on time, regardless of whether or not the reminder has fees attached.

No matter how we slice it, the evidence from the figures in the report, and our own data from collaborations with customers, leaves us with little doubt that the way in which payments and invoices are managed has a significant impact on how customers perceive their supplier, and how loyal they are over the long term.

Even more insights can be gained from the report that can help you structure your payment and invoice processes in a way that builds loyalty. Want to know more? Read the full report here.