Different approaches to moving customers to Direct Debit

From incentivising the switch to making it compulsory, consider which approach is right for your business.

Incentivise the switch

Some customers might be incentivised just by the fact that Direct Debit lets them pay in instalments. For example if they usually pay annually, point out that Direct Debit allows them to spread costs throughout the year and pay on a day which suits them (GoCardless lets you collect payments on any day of the month).

If that’s not enough to get your customers to move, why not try financial or product incentives, for example:

  • Offer a one-off charitable donation for every customer who switches to Direct Debit, and ask customers to vote on their preferred charity to receive it.

  • Give a free gift. UK conservation charity, The National Trust, offered a free pair of binoculars to people who pay by Direct Debit, for example.

  • Try a discount on your product or service. Some energy providers, including EDF in the UK, and Origin energy in Australia offer a percentage off your bill. While UK gallery, The Tate, offered £10 off membership fees for those who choose to pay by Direct Debit.

  • Consider waiving any admin fees. Norwich Residential Management (NRM), in the UK, encourage their residents to pay service charges by Direct Debit in an instalment plan, rather than by cheque or bank transfer - if they do, NRM waive the £25 payment administration fee.

  • Try a limited time offer. Window cleaning firm, Premier Clean, offered customers who chose GoCardless 10% of their next clean for a limited period.

Make it compulsory

If customers really won’t budge, you might want to consider making it compulsory for them to pay you by Direct Debit.

This is a good option for your business if:

  • Cash flow is becoming a problem
  • If you are spending a large proportion of your time chasing payments
  • You don’t have a finance or admin team available to chase payments
  • Efficiency of payment collection is important to you
  • If you are looking to grow your business and need to have simple and consistent payment processes that are easy to scale

While you may have to turn down the odd client who won’t change; you’ll free yourself up to focus on winning the right kind of business.

If you find it difficult to enforce this change on existing customers, start by including it as a condition to new customers only (see Chapter 3 of this guide).

“GoCardless works flawlessly with regular orders,” says Kiril, “so it’s the only way to pay for Söt by Mörk – we wanted to kick off this new venture on the right foot.”

Kiril Shaginov, co-founder at Mörk Chocolate – Speciality hot chocolate powder (wholesale & retail) and cake wholesaler

“When we engage with new clients, part of the set-up process is to complete a GoCardless mandate. We will only complete work for clients if an active GoCardless mandate is in place.”

Paul Bulpitt, co-founder at The Wow Company – accountants and business advisers

Darren Green from Green Pro Clean talks about his experience of making it compulsory for his customers to pay by GoCardless.

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