Debt collection is broken. On any given day, the average dental practice collects only 94.1% of what they are actually owed. So if a practice averages $800,000 a year, they don’t see over $47,000 of that amount. That’s a lot.
Over 1 in 4 Americans has at least one debt in collections. But for many customers, intentional avoidance or inability to pay is actually not the reason they don’t pay.
The real problem: communication.
According to our research, collections isn’t a money problem—it’s a communication problem. The main downfall of traditional collection systems is that they operate on outdated communication methods. This means that they experience the same pitfalls as these outdated methods do—they’re inconvenient, let things slip through the cracks, and don’t reach customers where they are. So, what can you do?
Stop relying on inconvenient communication channels.
If you’ve paid a bill, you already know from experience that paper and electronic bills simply aren’t convenient to receive and respond to. For paper, you have to retrieve and review the bill, write a check, put it in an envelope, seal, stamp, and send. For email, you have to search your inbox/spam folders, locate the bill (hopefully), and then go to a different site to pay. According to our customers, convenience is now a make or break and inconvenience causes consumers to delay payment, lengthening your collections cycle. Customers want the convenience of paying through frictionless, digital channels.
“When we would send out bills, it would take us a little bit of time to get paid. Not because people were trying to skip out, just for the simple fact that it wasn’t easy enough.”
-Charley Boyce, Paschal Air, Plumbing & Electrical
Eliminate methods that don’t deliver consistency.
Traditional collection systems, such as snail mail and email, also make it easy for bills to slip through the cracks. Only 78% of customers who get paper bills by snail mail actually review the transactions on the statement, and only 43% of those who get electronic bills go online to review transaction details. Things get lost in the shuffle, as snail mail takes multiple days (even weeks) and many email bills get sent to spam or are simply passed over. If you want to collect effectively, you need to do so through platforms that facilitate consistency for your customers.
“You get mail from the doctor, it goes in the stack. You don’t open it, nobody opens it. I don’t open it.”
-Brent Kell, Valley Immediate Care
Center your collections around mobile connection.
Traditional collection systems also fail to reach customers where they’re at—their phones. Did you know that only 20-30% of emails get opened? And while up to 90% of snail mail gets opened (much better), paper bills often get thrown aside. Consider the fact that texts see an open rate of around 98% and a response rate of 45%. Over a third of customers prefer a mobile payment option, and recent research shows that consumers now prefer text as their top method to engage with businesses (across all ages). If you want to improve your collections, going mobile is key.
“They no longer have to call in on an archaic system to make a payment. They get a text message, they pay, and it’s done.”
-Ryan Levitz, Ashley Furniture
Collecting payments can often be a time-consuming and exhausting chore—but it doesn’t have to be that way for you. If you implement a system that capitalizes on convenience, consistency, and mobile communication, you can eliminate the common obstacles that keep you from getting paid. And it starts with sending a text.
Podium Payments is a convenient, frictionless way to collect payments through text. By simply sending a secure link that customers can click to pay, you can get paid 80% faster and improve your delinquent collection rates by as much as 300%. To learn more, visit Podium Payments and see what text can do for your business’s collection system.