Wednesday, July 22, 2009

When do you contact a "customer" for overdue payment?

If your business model relies on questionable renewal policies to keep customer "buying" your service, how long do you wait to contact a "customer" who has not paid their invoice?

A normal company would contact a customer with an invoice 30 days past due, 60 at worst.

How about Lloyd's? 2 months? 3, 4, 5 months? No the correct answer is 6 months. Why wait 6 months? Maybe it was an honest mistake. Maybe they want to wait until the service, delivered unknowingly to the customer, has be "provided" for 6 months, so it is more difficult to cancel the full year.

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