How we gained $5000 in additional revenue with no advertising or signups
written by Allan on August 16, 2012
We’ve always focused on giving LessAccounting a personal, warm touch. It wasn’t until recently that we realized the power of the telephone.
In the beginning of 2012, we had over 400 businesses in LessAccounting with invalid billing information. These are people that WANT TO PAY US, but have expired credit cards, invalid billing addresses, card numbers for cards that have closed accounts or cards with full limits. At $30 a month, that’s $12,000 plus of monthly revenue that we were unable to collect.
We’ve always emailed users with invalid billing codes, and we tend to see little action in return. We don’t know the exact reason why, but we have some theories on the lack of action from our users.
My Sister. Our Billing Department.
In February, we hired my sister, Alicia, part-time just to call users with billing issues. We started by building a “bad billing call list” in the admin area of LessAccounting. The list contains user information plus a button: “Contacted or Resolved.” Alicia hits this action when she’s contacted them. This temporarily removes the user from the list and only puts them back if they have another failed charge attempt.
The Possible Outcomes of Alicia’s Call:
- Wrong Number
- No Answer/No voicemail
- Voicemail – If the user answers, she explains who she is and tells them how to resolve the issue. She can even enter the new credit card in for them if they like. No pressure sales, just a friendly reminder.
No matter the outcome, Alicia always follows up with an email. The body of the email stays the same, but the start of the email varies according to the call result. The beginning has a quick reference as to WHY she’s emailing them, the body contains HOW to resolve the situation, and the signature gives them a way to get in touch with us if they have questions.
Here’s the email she sends:
Hey there! It's Alicia with LessAccounting.com and we spoke on the phone about your invalid billing information for your account. A lapse in your billing will result in a lapse of importing data into your bookkeeping.
To Change Billing Information
- Log into http://LessAccounting.com/login
- Navigate to "Account.”
- It's linked at the top right of the screen.
- Scroll down to the billing form and replace the data with updated information, then hit save. (It might be as simple as an address change.)
- You might want to also head over to the "bank accounts" page and refresh your bank connections.
What We’ve Seen
Most people don’t answer and let it go to voicemail. More issues are resolved via email than phone, but the phone is a nice kick in the pants for most users. Zero users have complained about the phone calls or emails. The vast majority are happy and appreciative of our calls and personalized emails.
The Result
Over the past few months the number of unpaid users has dropped from 400 invalid billings per month to around 240 invalid billings. That's an extra +$5000 a month in billings (180 people x $30). Plus Alicia works about 2 hours a week. During this two hours she helps new, incoming billing issues and she’s slowly working that list down from 240 bad billing users.
Start calling your users with invalid billings today. FYI we use Grasshopper.com for our phone system and love it
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Allan loves his family more than breathing. He lives in Panama City, Florida & grew up washing cars at his family's car washes. Oh and Allan hasn't worn underwear since 2004.
8 Comments
Great post! Are you automatically freezing their accounts upon failure for payments? Do you retry to bill them automatically the next day?
I know why people don’t update their credit cards. Having just gone through this myself, when your credit card is expiring you get 10 emails from a ton of different services and it’s a hassle. Half the websites make you jump through hoops to do it. Non-critical accounts get lapsed. I had to set aside time to update my card on all the websites that needed it.
Great post Allan, I love stories like this.
Love the email. How do you guys manage templates like this? Tout? Gmail?
@taylor when we have common replies via email, we’ll setup the signature to be the full email response in gmail. What’s tout?
@Brian, we attempt to bill for 3 days in a row then stop their bank importing. The bank importing costs us money from our data provider, we also alert the user next time they login that their account is inactive.
Tout is like MailChimp for 1-to-1 email.
They have a plugin for Google Apps, you can set-up templates and track open rates, click rate, response rates. It’s pretty cool.
http://www1.toutapp.com/
There are a few nifty apps out there such as CheddarGetter which will automatically disable a customer’s account if their CC billing fails. In my opinion it holds the customer’s accountable and saves you time and money. We’v recently implemented for one of our SaaS apps and we’re loving it so far.
This is so true, I completely second what a difference a personal phone call can make. True, you only get to talk to a fraction of the people you call but the high success rate makes it worthwhile still. For simple obvious cases I still prefer an email, but everything that’s hard to explain with words or can easily be misunderstood I do via phone. So far I had not one called person complain. In fact, all of them were positively surprised that I’d called them personally. And yes, grasshopper.com are amazing!
Did exactly the same at dimdim.com with similar results. You can read more about such adventures at http://www.sundarsubramanian.com/post/9367177650/adventures-in-online-subscription-business-part-2