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Why You Should Get Your Clients To Prepay

By News Creatives Authors , in Small Business , at October 18, 2021

LinkedIn & Personal Branding Expert – CEO & Founder of Black Marketing – 1,000+ LinkedIn Recommendations, 4 Best Selling Books.

At the beginning of the pandemic, I changed our business model from post-payment to prepayment, and it had a dramatically positive effect on my company. Discounts are always part of any negotiation, especially for businesses in Asia, and we have always given discounts for longevity. So, I started adding prepayment as an added incentive to sign clients up for six to 12 months. Business shot up. Cashflow shot up. We went from having 5-7.5% bad debts to having zero bad debts.

Another positive side effect of this was that I also found clients were more committed. The mere act of prepaying meant that clients wanted to get their money’s worth and would approve content, messaging and engage quicker and faster than ever before with my team. They now approve everything super quickly. It transformed the relationship.

My legal bills also went down, as I no longer needed to employ lawyers and debt collectors to chase outstanding bills. We are reclaiming the time and energy that this would typically take. My stress levels went down. No more was I outraged that someone was two months late paying bills or just decided not to because they’d already received the service. There has been no more worrying about entrepreneurs in Vietnam with bank accounts in New York and $100-value companies registered in Hong Kong not paying and then having the problem of receiving the money. 

Now people have to prepay, or they don’t get the business. And this might be a strategy to consider implementing in your company, too. 

Making The Transition To Prepay

I started off with both my main services. Premium and Ultimate were offered with a 20% discount for prepaying. Then we transitioned every Premium service to be prepaid. This was partly because my Premium Personal Branding Service is often taken up by individuals with no company behind them, so I’m not able to collect a debt if they refuse to pay. 

I still offer the 20% discount on my Ultimate service, which includes Personal Branding and Social Selling. This deal tends to be taken up by founders, CEOs and entrepreneurs of established SMEs or sole traders. Additionally, if they don’t wish to prepay, then they have to prepay a one-month deposit, which gets paid back at the end of the contract as long as it’s paid up. As a result of this change, most people prepay the entire six- to 12-month contract.

Make the transition in your company over time, even if that means over some years. First, consider starting prepayment as optional but give customers a large enough incentive to move to it and away from post-payment. After some time, move all of your services to prepay. 

Also, be sure to market the service hard and communicate what prepayment looks like, include it in the contract and send the invoice at the same time. Communication should happen as a natural state of affairs: agreement, starter kit, invoice to be prepaid before onboarding and then onboarding.

Filtering The Committed And Noncommitted

Prepaying can be an effective way to sort out your customers. For my company, it sorts out people who have budget sign-off from those who say they do but in reality, don’t. It sorts out people who are committed to enhancing their personal brand and those who are just trying it on. It sorts out people who are thinking about becoming a thought leader on LinkedIn and those who say that they wish to but don’t really want to commit.

It’s also a very honest way of doing business. I tell people straight away that they need to prepay to access our premium services. “Are you serious about your personal brand? Are you serious about your LinkedIn marketing? If you are, you need to prepay, or you don’t get our quality service.”

Use prepaying to save time that would otherwise be wasted on potential clients who don’t sign up or do sign up but then don’t pay later or are flakey. People are rarely flaky or uncommitted if they have to prepay — they’re focused.

As a result of prepaying, my company had a record year last year. Have the confidence to get your clients to prepay, and it could transform your finances and your mental well-being. 

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?


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