According to research from Fundbox small businesses in the United States, are owed a whopping $825 billion in unpaid invoices. What the study doesn’t make clear however is how many businesses go unpaid due to poor relationship management with their customers.
Where’s My Money?
First, you’re not the only one not getting paid.
79% of business owners in another survey by FundBox say they’re unable to pay themselves because of overdue invoices. Further, 23% can’t hire new employees, 20% say they can’t spend money on new equipment, and 17% state they’re unable to build up inventory—all because of overdue payments.
But what if you had more control?
What if the reason you haven’t gotten paid is because you haven’t given the client the impression you’re worth being paid on time?
How Being Proactive With Relationship Management Will Get You Paid
It’s crazy, I know. The rule should be you do the work and you get paid.
As the business owner, however, you carry the responsibility of implementing relationship management strategies and forging solid relationships with clients where they’re happy to pay on time.
Relationship Management Strategy #1: Move Outside The Inbox
Pick up the phone for a conversation, schedule a video call, or meet in person. Show them you’re a real person whenever possible.
Email’s faster – I get it. But, when you trade face time for screen time, it’s much easier for clients to view you as an interchangeable service provider.
Setting up a weekly or bi-weekly video chat is the simplest relationship management tactic you can employ today that will go a long way in providing value and reminding your client why they picked you over the many other providers of the same service, often at a lower cost.
Taking the concept of moving outside the inbox a step further, find time for casual meetings in a restaurant, coffee shop, or pub. A change of scenery goes long way in adding depth to their perception of you, and remind them why you’re worth paying in full and on time.
- Set up a recurring video or phone call with clients to get outside of the inbox.
- Make a point to occasionally meet in informal settings to build rapport.
Relationship Management Strategy #2: Develop a Personal Relationship
It should go without saying, but people like doing business with people they enjoy spending time with – so find some shared interests.
Whether you’re both currently training for your first half marathon or you can commiserate over the challenges of staying home with a sick kid, giving your clients and customers a peek at who you are as a person—and not just a business owner—will solidify that bond.
While the goal of relationship management is to get paid faster and retain your customer, a more satisfying side-effect is forming a bond that transcends the typical client/vendor relationship and evolves into a friendship that extends long after the contract is over.
- Set aside time in each interaction to learn about your client personally.
- Randomly follow up on shared interests.
Relationship Management Strategy #3. Follow Up Consistently and Frequently.
How well can you build a meaningful relationship in one hour, once a month?
Consistent, frequent, meaningful contact over multiple channels – email, instant messenger, text or phone – demonstrate that you’re not just in it for the paycheck.
Even if you don’t have something to deliver at a specific point in time, use the time to check in with a brief update, pass along an article, or talk briefly about a shared interest.
Gaps happen and goals aren’t always met on-time, However, don’t set the precident that it is acceptable to go weeks without communication or results. If that’s ok with you, your client has every right to assume it’s ok for them—regardless of the payment terms.
- Make a point to minimize large gaps in communication
- Schedule a regular meeting and establish check-in frequency from the outset of the relationship.
Relationship Management Strategy #4: Be Gracious and Thoughtful in Your Automated Interactions
If you’ve been working with a client for a while, or have been sending your invoices automatically, it’s easy to forget how much language counts.
An often forgotten element of relationship management is auditing all of your automated communications.
Even if all of your email interactions and regular phone conversations are friendly, curt default messages saying “Payment is due within 30 days” or “Thanks for being a customer!” can feel inconsistent and off-putting.
Take the time to evaluate all of your default messaging and inject more of your personality into it, so it doesn’t feel like a robotic exchange of goods and services for money.
- Consider how you would respond were the transaction taking place in person and with cash
- Evaluate your existing automated messaging and figure out how you can make it a little more human.
Relationship Management Strategy #5. Remember Birthdays, Holidays, and Milestones
It never hurts to express gratitude by sending something special for a client’s birthday, during the holidays, or after a major milestone.
Gifts should be tailored to their personal interests, but maintain a level of professionalism. In this list of client gift ideas on CNBC for example, there are personalized pen sets, stylish wine sets, terrariums, and more.
If your client has a gift policy that prohibits receiving gifts, a card with a thoughtful message works just as well.
- Mark important dates and milestones in your calendar so you remember to recognize those with a gift or note.
- Select tasteful gifts that reflect their personality in a thoughtful way
It’s Time to Collect What You’ve Earned
You don’t want your invoices to collect dust—nobody can blame you. However, while managing your client relationships will improve your chances of getting paid on time, there’s so much more to it than that.
Making relationships a priority will improve your reputation, increase referrals and recommendations.
Yes, getting what you’re owed is a definite perk. But, gaining a new sense of connection and friendship with the people your business serves? Well, it’s tough to put a price on that.
Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
Join BMFMS on Social Media