McQueens Dairies

Unlocking payments innovation. One pint at a time

McQueens Dairies supplies milk to just over 1% of UK households, processing and delivering around 1.5m litres of milk a week and servicing more than 350,000 households.

“When we started, it was me, three brothers and one sister working for our parents to cover one milk round,” said Calum McQueen, Commercial Director, McQueens Dairies. “Thirty years later we have 550 rounds every night we of the week, with 1,300 staff working across 22 sites.”

McQueens is undergoing a major round of digital transformation as it aims to offer customers the kind of choice and flexibility they’re used to getting from other subscription services, such as entertainment or ecommerce. But those ambitions were being hampered by its previous bank-operated Direct Debit system, which provided poor visibility into failed payments and wouldn’t allow them to test new ideas for billing cycles or payment types.

“They couldn’t help us to grow as a business,” said Calum. “But when we started discussions with GoCardless we quickly saw that they were the market’s best offering, and that they fit perfectly with our digital strategy.”

Failed payments at an all-time low

McQueens invoices customers every Friday and generates a payment file to upload into GoCardless, which automatically takes payment the following Wednesday. The introduction of GoCardless has been followed by strong growth in customer adoption, which has helped to scale the benefits of Direct Debit for both McQueens and its customers.

“We’re now processing hundreds of thousands of Direct Debits weekly with GoCardless, which has increased by around 15%, and almost all of our customers now pay this way,” said Scott Clelland, Head of Credit Control, McQueens Dairies.

Those “issues” are now at an all-time low. “Previously, we had payment failures of around 5%, but with GoCardless these have been halved to 2.3%,” said Doug Stewart, Project Manager and Head of IT, McQueens Dairies. “GoCardless also automatically retries failed payments, and these subsequent tries have a high success rate, while its tools and reporting allow us to see the trends and make tweaks to bring them down.”

Working with GoCardless has also allowed McQueens to offload payments-related GDPR compliance demands, removing yet another admin headache. “GoCardless holds customers’ bank account information,” said Doug. “That means we no longer have to do those checks ourselves. This was a big box ticked for us — one of many.”

Cheaper and more reliable than cards

Collecting relatively small amounts from hundreds of thousands of customers means cost-effective and scalable payments are vital to McQueens’ cashflow and margins. The reliability and low cost of Direct Debit makes it the natural choice over card payments.

“Our costs – and those of our customers – would be far higher if we used cards to process weekly payments for small amounts at that scale,” said Scott. “Plus cards expire, get maxed out or cancelled, but even if customers change banks their Direct Debits switch with them, so there's rarely any disruption.” 

Free to innovate

McQueens’ implementation of GoCardless took just eight weeks, from planning to go live. The weekly billing cycle provided only a small window for the final step, which could’ve been a tense moment if it wasn’t for the expert support from GoCardless.

With a modern payments platform and the right support, McQueens can finally embark on a phase of payments and billing innovation. “I couldn’t talk highly enough of the technical team at GoCardless, from the implementation to ongoing support,” said Doug. “If we want to play with new payment approaches, they spin up sandboxes for us. And they come back to us quickly on our new ideas and theories. GoCardless has modern APIs and modern availability, and we’re now exploring new billing systems based on the fact they can integrate with GoCardless. That's how important it is to us.”

Keeping the winning streak going

McQueens has grown every year since its bottles first started hitting customers’ doorsteps back in 1995. And Calum believes GoCardless will help the company continue this winning streak.

“We have big expansion plans and GoCardless will make it far easier to keep on top of payments as we grow,” he said. “Whether we’re putting through 300,000 or 500,000 payments, the process will stay exactly the same.”