Membership dues are the lifeblood of your business, so many club owners utilize the services of banks and outside billing companies to make sure those revenues are received each month. But is your billing services provider really working as well as it could at making, and saving, money for you?
Here are the three key areas to evaluate if you currently outsource your billing:
1. Rates: Start with the basics – your recurring dues payments. What does your billing services provider charge to process your membership dues payments each month? Is it a flat rate per payment or a percentage of each payment received? If you’re like many clubs, you may have different types and lengths of memberships, so you probably have different transaction amounts coming through each month. The key question is…If you are paying more in fees to process a $50 payment than a $10 payment – why?
For example, in reviewing your last month’s statement, you find you paid $4.50 in fees to process a family membership, but only $1.50 to process a singles membership. Both were EFT drafts from checking accounts – the only difference was the price of the memberships. Are you being overcharged? If you’re not sure, ask your billing processor to explain the difference in fees for these two transactions.
In the above example, a flat rate per payment arrangement will likely save you money on your processing fees compared to a percentage of payment rate structure. Once you have identified your basic processing fees, you will also want to look at services.
2. Services: Beyond the payment processing itself, what other services are automatically provided to you within the processing fees? For example, you’ll want to determine if welcome letters, statements, marketing promotions and other communications with your members are automatically included. Does the billing company handle updating members’ account information, following up on late payments, skip tracing, and other customer service functions? Or, do you, or your staff, have to perform these activities? Many companies include none of these services, or may only offer them for an additional fee.
Certainly the ideal scenario is a low flat rate on all transactions for your upfront processing, with services for all the backend functions included at no extra charge. Try to determine exactly where your billing provider fits in that equation. Bottom line – are you getting your money’s worth?
3. Integration: This is possibly the most important and most often overlooked area. Another way your billing company can make or save you money is by how well their systems and people integrate with your own – and also with your members.
If your billing company can effectively apply your policies as it relates to freezing accounts, cancellations, renewals, etc., that saves you and your staff time, and it improves overall efficiency within your club.
Perhaps the most important question though is…How well does your billing provider understand your business, and do they effectively represent your mission statement and message to your members?
Are they operating in a way that is truly an extension of yourself?
A good motto to follow is: “It’s not just in the dollars collected, it’s in the members retained.” Ideally, your billing provider should know how to talk to a delinquent member in a way that not only helps get them current with their payments, but gets them back into the club.
On the technical side, do you have easy access to all the information and reports you need, either over the Web or through your front desk system? Is the technology helping you, or is it causing you to lose touch with your members?
For example, when checking in a member at the front desk, you should be able to view any conversations your billing company has had with that member; know which customer service rep spoke to them; the time, the date and the context of their conversation, as well as when any correspondence was sent to them. Or, if the member sent correspondence to your billing company, you should be able to access that information too.
Likewise, can the member go online and print a copy of their contract; view their transaction history; update their account information, and make payments over the Web? Ideally, your database software and online access should not only enhance communications between you and your billing company, but also between you and your members.
If you haven’t done it recently, now’s a good time to look at your current rate structure, the services you do and don’t receive, and how well your billing provider is serving the overall efficiencies and goals of your business.
Sid Nelson is a former club owner, and since 1999, the COO of Affiliated Acceptance Corporation. He can be reached at 800.233.8483, or by email at AskSid@affiliated.org.
