It’s spring and your budget season is coming to a close. Time to do some analysis and make some important decisions. Budgets can be a great way of controlling your accounts receivable, and a well-thought out plan can lead to happy, loyal customers.
Budget Performance This Year
The question of the moment is: how did your budget customers perform this season? Depending on the weather in your geographic location, your fuel prices, and the accuracy of your predictions, your budget calculations may have been spot on, too high, too low or, more likely, a combination.
On the Mark
If your predictions for customer usage and product price were accurate, your customers’ payments and their financial obligations should be close to a wash. Congratulations! You can focus on a simple roll-over to next year’s budget plans. But if you…
If budget payments were overestimated, you owe your customers money. It’s nice to have that extra cash in your hands right now, but even nicer if it’s really yours. That being said, there are some good options on how to handle this:
- Roll it over – Notify the customer of the credit balance, thank them for their business, and offer to roll it over into next year’s budget to make the monthly payments even lower than this year’s.
- Use the credit balance – If you haven’t delivered to them in 60 days, consider using the extra dollars to top off their tank.
- Offer a deal – You can offer them a special discounted rate if they use the credit on some other service or product.
- Refund the money – Sometimes you can generate the best customer loyalty by simply returning the money and thanking them for their business.
If your budgets were underestimated, your customers owe you money and you need to decide how to tactfully collect it.
- Recalculate mid-season – When you see this start to happen, you have the option of recalculating and changing budget payments mid-season. As long as you made this possibility clear to the customer upfront, it shouldn’t come as too much of a surprise. You can explain that weather is unpredictable and prices can be that way as well. Explain that increasing the monthly payment means saving them from a balloon payment at the end.
- Give a choice – You can give your customer the option of paying the balance now, or rolling it over into the next budget season. Customers appreciate options.
Make Budget Accounts Even More Successful in the Future
With its potential to please customers with predictable payments, and to help you even out your account receivable, a budget program is worthy of your time. Consider improvements that may make them even more attractive.
There is a huge amount of room for creativity here, with the potential to create a rewarding and fun customer relationship. Maybe signing up for a new budget plan automatically enters your customer into a lottery drawing for a fun prize. It may simply make sense to offer a number of cents/gallon off the standard price, or potentially offer interest on a credit balance where allowed.
There is also the option to offer price protection in conjunction with your budget plans. You can set up a guaranteed price for a number of gallons or maybe a period of time. These pricing plans can match your purchasing agreements with your suppliers, so you are both protected from fluctuations.
Targeted Marketing Messages
Use segmentation to increase your number of budget accounts. You can segment your customer list, based on customer account data, and send targeted emails or texts with a specific marketing message tailored to that particular group. For example, you can specifically target will call customers, touting the benefits of a fixed payment and predictable deliveries. Separately, you can target your automatic accounts with a message thanking them for being a loyal customer and laying out the benefits of a fixed payment. The more tailored the message, the more likely you are to get a positive result.
Recognize the Value
Make sure to recognize that your budget accounts are some of your most valuable customers. They have essentially segmented themselves into a list of your most loyal patrons. Let them know how much you appreciate them and inform them about the other services you offer. They are likely to be interested.
Budgets have some real potential for improving the customer experience with your company, and for improving your cash flow. Take stock of where you are after this winter, review your processes and consider new possibilities.
Learn more about how you can get started with budgets in ADD Energy E3®, or how you can implement some new options, including our new Communications Module, by contacting us at firstname.lastname@example.org or 800-922-0972. For more customer communication ideas, view our webinar with LP Gas, “How Timely Communication and Focused Marketing Messages Can Boost Profits.”