Billing and collections can be the most uncomfortable aspect of your business if not handled correctly. Information discrepancies or slightly too aggressive payment collection tactics are at the heart of many negative member experiences, so it’s important to implement a procedure that gets membership fees paid off, without hurting the perception of your club.
The most important thing to consider in billing and collections is your relationship with your members. If your current process consistently receives negative reactions, it might be time to rethink your strategy.
“Don’t be greedy,” said Ed Bogacki, the president of Gold’s Gym Tampa. “We’re here to help people. I’m here to make money and help people make a living, of course, but it’s not always about the money.”
The best way to deliver positive experiences — and stop billing and collections from being considered as negative — is to keep members top-of-mind. “I want to create a fun fitness environment for my customers, something they can experience and want to come back to,” said Dave Dos Santos, the CEO of Best Fitness. “I want to have different relationships with my customers than just as the person who’s collecting money.”
However, there are some practical ways to improve your billing and collections process. First, eliminating those painful collections conversations starts with minimizing the number of returned electronic funds transfers (EFTs) you get each billing cycle.
Then when these problems still occur, having the right software and billing partner in place, along with proper communication, can sort out any errors before they escalate to relationship-damaging interactions.
Minimizing Returns and Declines
The best defense against awkward billing or collections-related encounters is preventing as many returned EFTs as you can. Traditionally, the best way to accomplish this has been getting the account and routing numbers to a member’s bank account on file.
“It’s easier to bill from somebody’s checking account than it is their credit cards, because credit card info often changes,” said Dos Santos. “Try to increase your checking account numbers — get it to 50 to 60 percent of your portfolio.”
However, getting account and routing numbers can be more difficult than it was in the past. “If you get a member’s account number and routing number of their checking account, that always helps,” said Bogacki. “But nowadays, it seems like it’s difficult to get that information from people because nobody uses checks very much anymore. It’s just easier to get a credit card or debit card number.”
Bogacki has also found it extremely helpful to have software that can automatically update changes to members’ payment methods. “Your billing software should be enrolled in a program where when one of your members updates their credit card information, it updates the credit card information for you,” he said.
The more you can prevent payments from being declined or missed, the fewer awkward billing conversations you’ll have with members. But no system is perfect, and problems will still surface, which is why it’s important to have a reliable software partner.
The Importance of a True Partner
Companies like Twin Oaks, ABC Financial, Paramount Acceptance, Jonas Fitness, and ASF Payment Solutions are just a few examples of software partners for club operators to choose from. The best partner can completely manage your billing and collections process, giving you more time to focus on programming, equipment and marketing.
“Your billing and collections partner is important,” said Dos Santos. “They’re extensions of your business, so whatever your values are for your business, you’ve got to make sure they’re representing that.”
In fact, your collections partner’s values should resonate closely with your club’s values, considering the fact you’re trusting them with contacting your members regarding billing on your behalf. “Our staff doesn’t contact members — we leave it to the professionals,” said Dos Santos. “We leave it to ABC Financial to follow up, and they do it very well.”
After all, your club staff shouldn’t be expected to serve as collectors. More likely than not, collections isn’t their primary responsibility and they haven’t been adequately trained as such.
“We don’t want a staff member reaching out because we don’t feel like they’re prepared correctly,” said Dos Santos. “They’re there to service the member, they’re there to take care of the member, and they’re there for positive situations.”
It’s also important to feel like a true partner with your software company, according to Bogacki. “Look for a company that wants to be your partner, not just another number for them to brag on how many clubs they handle,” he said. “Bigger is not always better.”
But no matter how critical your software partner is, it’s important to remember that the billing and collections process still needs to be managed or have some level of oversight from the club’s leaders.
“Sometimes, there are problems on our end,” said Dos Santos. “You want to make sure someone in the background is always making sure we’re tweaking the process and making sure the process is stable.”
At the end of the day, it’s just like any other component of your club — you get out of it what you put into it. “Software doesn’t do anything you don’t want it to do — it doesn’t run your company,” said Dos Santos. “It’s only as good as the information you put into it. It’s just a tool to help you run your business more efficiently.”
Constant engagement with members will help in all aspects of club management, especially with billing and collections. Whether a member is 10 days behind on their payment or 90 days, it’s important for that member to feel you are personally invested in them.
“What’s best for business is always to keep engaging with your members,” said Bogacki. “Somebody should be at least calling them once a month and when they’re leaving a message, say, ‘Hey, we’re just checking up on you. We wanted to see how you’re doing.’ Then, when you finally do have to contact them because their billing didn’t go through, they’re more receptive because they’re not thinking you only contact them when you want their money.”
If you have a large amount of members, however, the once-a-month call is easier said than done, so it’s important to use other forms of communication when necessary. “The reality is if you’ve got 5,000 members, it’s very difficult to call 5,000 people in a month,” said Bogacki. “So send emails and send texts, along with phone calls.”
For Gold’s Gym Tampa, the most successful method is using a consistent variety of contact methods.
“For the first 10 days, ASF Payment Solutions will do automated phone calls and emails to the member,” said Bogacki. “After that, I have an auto-texting company that allows us to send that member a text stating their account is overdue. And that usually gets it.”
At Best Fitness, members typically have 90 days to pay. “If after 90 days, we’ve put a ton of calls, emails and texts into you, you then go to a separate collections company and they do get a little more aggressive,” said Dos Santos. “But I also think it’s important for clubs to allow delinquent accounts back on billing [after they’ve paid].”
No matter where a member is in the billing or collections process, it’s important for clubs to be considerate of that member’s feelings. More likely than not, they’re not trying to scam the club, so it’s important to proceed with a certain level of understanding.
“You really have to go with a soft approach,” said Dos Santos. “We all make mistakes, and there could be issues — you have to be sensitive. Recognize the goal is not to be a debtor, but to get that person to be a gym member.”
Billing and collections can be uncomfortable, but if your members’ health and wellness remains the primary objective, the conversations about their payments become more about how to get them back in the club and less about the money. And that speaks volumes to members.
“I want to be known as the fitness education center, the place where you come to get fit,” said Dos Santos. “I don’t want to be known as the place that’s collecting money from you.”
By being more personable and understanding throughout your billing and collections process, your members will feel more welcomed and motivated to come back to your club. “It creates a positive perception of your club,” said Dos Santos. “That’s why you have to allow people to get back on billing, and you can’t just be a debtor.”
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