| | 9 APRIL - 2022Payment methods flexibility: Many organizations focus on prioritizing and often forcing customers towards direct debit as a default renewal payment mode, but even in the mature markets, up to 15 percent of direct debits are canceled or fail every month. This figure is increasing as customers now can easily use neo and challenger banks' services as a way of fighting back.Introducing a greater range of payment options allows customers to transact and interact in the ways and on the terms they want, increasing customer satisfaction and actual revenue retention. Payment plans and schedule flexibility:Many organizations do not offer different payment plans and schedules. There are good reasons for this, as greater customer flexibility comes with implications for managing receivables and cash flow. At the same time, the meteoric rise of buy-now-pay-later solutions, and their rapid consumer adoption over recent years clearly indicate growing demand from customers, especially among younger demographics for greater flexibility and they are ready to pay for it.Right now, as the fight for customer retention intensifies, it is worth considering whether providing one-size-fits-all payment plans, driven by an inside-out perspective, is still the right approach. Today, with mature technology solutions available, the operations problem can be addressed without increasing the burden on internal processes while delivering a positive impact on customers and increasing revenue retention.End-to-end communication:Payment is one of few regular communication channels with the customer and should be treated as such. Too often it is handled as purely transactional and robotic, which is a missed opportunity. Companies need to review their end-to-end payment communications to make sure they are aligned with the brand promise and are truly customer-centric. Many organizations are surprised by the difference made to overall retention by a personalized communication that is clear, timely, positive, comprehensive, and adds value to the customer at the moment of renewal. We must not forget the importance of an ethical approach. This is especially relevant for companies that are selling services and products as subscriptions with automated payment collections. Tactics like failing to send notifications about an upcoming renewal or sending them too late, or not providing enough information about cancellation options, may work short-term, but eventually, damage the company. This is particularly true in a world where any service can be reviewed online and hinder new customer acquisition.Process personalization:With the advent of AI and ML, it is becoming possible to personalize the backend payments process and adapt it at scale to every customer. This becomes even more powerful when reinforced with intelligent communication, ultimately leading to improved customer retention. A good example is when a customer is usually late with payments and pays closer to, for example, payday. Anticipating such a situation and complementing it with positive communication allows companies to suggest the customer adjusts their contract renewal and payment dates to avoid future stressful reminders about missed payments. This directly improves overall retention and reduces the involuntary churn.For many businesses, the shift towards digital sales means optimizing the backend process to delivering the best possible customer experience at the front-end, at the point of customer acquisition. This is where most organizations stop, not dedicating as much effort to optimize especially the last mile of customer retention--renewal payment. Too often, organizations settle for, at best, a mediocre experience, and unknowingly miss significant opportunities to improve customer retention and business profitability. Tomasz KurczykUnfortunately, too many service providers focus solely on the first-time purchase experience and forget the service renewal experience
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