When it comes to growing your business, have you considered all the levers to pull at your disposal? While the more mainstream revenue drivers - like new user acquisition - are tried and tested, sometimes a company’s secret weapon for growth is right under their nose.
I’m talking about payments - and specifically, transforming the Accounts Receivable (A/R) function into a strategic growth driver. Optimizing the payment experience is a critical part of the overall customer engagement strategy. And done right, it has the potential to improve retention and growth in a way that’s more efficient than new customer acquisition.
According to Hubspot, it's 5-25X more expensive to acquire a new customer than it is to retain an existing one. And when you do retain a customer, they're more likely to spend more and purchase more frequently.
Existing customers are easier to sell to -- by a long shot: You're 60-70% likely to sell to an existing customer, compared to the 5-20% likelihood of selling to a new prospect.
When it comes to growing the existing customer base, the latest secret weapon of growth-focused exec teams with B2B business models is transforming their A/R process. A streamlined, growth-optimized payment process has long been a proven customer growth engine in B2C and D2C orgs. Now it’s becoming the standard best practice for B2B payments.
Here are five ways that executive teams at B2B companies are thinking about A/R functions as strategic levers of growth.
The collection of a payment from your customer is a critical touchpoint for the brand. Consider how quickly this experience can be a negative one, fostering negative sentiment toward your company. The customer is already handing over their hard-earned money to you. How can you make them feel good about that decision?
Let your branding as well as voice and tone shine through in your payment collection communications. Instead of sending standardized robot language that can leave your customer feeling cold and unappreciated, involve your communications team in the effort to humanize your payments emails or portal so that your brand continues to come through and make a more human connection with the end customer.
Using clear, friendly language leaves customers with a positive sentiment. This touchpoint is an opportunity to personalize the experience for them and remind them of the value they’re getting by working with your company. Happy customers with strong brand affinity don’t churn, they buy more, and they refer friends.
When your customers have to hunt down and manage paper invoices and checks, it’s a lose-lose situation. Both you and your customers have to spend resources dedicated to a manual, analog process that is subject to human error. It creates inefficiencies and a poor experience for you both.
With a seamless, digital experience, payment becomes an easy “To Do” item rather than a full job description.
Besides the general importance of a positive customer experience for the Lifetime Value of your customers, payment streamlining directly speeds the time in which you get money in the bank, decreasing DSO.
Another way to speed your time to reconciliation is providing more options for the types of payments accepted so that customers can pay the way they want to. From a growth perspective, this becomes a competitive differentiator for your company over alternatives. Improve your differentiation even more by offering options that also have lower fees than competitive options. You can do this by tapping into an established global payment network that is negotiated on your behalf.
As the global economy becomes more “borderless,” it’s becoming both simpler and more complex to be an international business. It’s simpler, because tech-enabled infrastructure makes it easier to reach new markets, provision new resources outside of a company’s country of origin - from setting up new websites and acquiring new customers, to accessing goods and services. It’s more complex because fragmented systems and fast-moving regulations that differ per region require considerable time, money and other resources to navigate. This can slow growth and divert time and attention from revenue-focused activities.
Surprisingly, one of the hardest things for businesses to do when expanding internationally is simply to get paid. According to new research, 9 of 10 finance professionals - those who have a role in handling the inbound payments at their companies - said global expansion efforts could accelerate if businesses could deal with foreign exchange rates in an easier way.
Plugging into an existing global payments network allows your team to play in a new customer market without the hassle.
The point of payment is also a unique opportunity to upsell, ask for a referral, or get paid upfront for future services. Unlike in B2C, invoicing communications has been a largely untapped playing field for growth experiments. Work with your sales or growth team to try out new ways to generate revenue during the payment process and double down on methods that return results. With a next gen A/R solution, you can easily track customer transactions and identify opportunities for growth as well as threats of bad payer behavior.
To learn more, speak to an expert today: https://www.flywire.com/industries/b2b