The following is a contributed piece from SurveyMonkey CFO Debbie Clifford. Opinions expressed are author's own.
In the past several months, COVID-19 has resulted in lost jobs, shuttered businesses, empty schools, and closed services. Although many were able to shift their work and schooling to the home, millions across the country began wondering how they would pay their bills. Not only are we in uncharted waters, but we've discovered they're shark-infested.
Many companies that survived the initial shutdowns continue looking for reasonable strategies, like adjusting billing and collections policies to help their customers, while also keeping their doors open. Airlines, credit card companies, and internet providers have all waived fees as the crisis continues, but that isn't necessarily the right strategy for every business.
As an organization's financial caretaker, advisor, and gatekeeper, the CFO plays a critical role in helping companies chart a path forward. To do so, CFOs must understand how they can retain customers through billing and collections while maintaining good financial health. This means upholding efforts to improve outcomes for all stakeholders while using the data uncovered through customer experience efforts.
Retaining customers is essential
The fact that building solid long-term relationships with customers is a key to stability is not news to any CFO. However, one in three consumers say they will walk away from a brand they love after just one bad experience.
Amid a widespread health and financial crisis, finding the right way to handle billing and collections is critical. Our goal is to retain our customers — in any form — and focus on the long-term health of our relationships with them.
A recent Bain & Company study found even a relatively small uptick in customer retention (5%) increased profits by 25% to 95%. Although a full, back-to-normal reopening of the country is still in the distant future, building customer loyalty by focusing on retention now will provide long-term benefits and a competitive edge.
Building lifetime value might mean collecting $1 today from a customer who was paying $100 yesterday. But this will likely be worth it if the company retains a good customer, especially after the shutdowns are eased.
We should provide as many resources as possible to ensure our customers' success, especially in a subscription-based business like SurveyMonkey. Short-sighted decisions will only provide short-term benefits, and customers that work with an organization that understands their long-term value will be more likely to stick around.
Looking after the company's fiscal health
Of course, the CFO and finance team still must responsibly manage finances as they work with customers. Payment structures vary widely by industry and company; there is no one-size-fits-all solution.
There are several great examples of companies structuring waivers and billing during the pandemic to accommodate its customers' specific needs. Wells Fargo is waiving payments case by case, Aflac is waiving co-pays for certain services, Albertson's is waiving delivery fees, and American Airlines is waiving fees through a certain date.
In addition, a thoughtful finance department must consider the other side of the payment equation, by negotiating fair terms with suppliers. Carefully considering your company's financial position, and proactively engaging with vendors, can help you find a balance that looks after your company's wellbeing and takes care of your customers simultaneously.
This is also a perfect time to examine vendor behavior in other areas, like diversity, equity and inclusion. As we seek to continue building anti-racist policies and practices across our company, an organization's willingness to take a stand cannot end at their own front door. Vendors play a significant role in the ongoing effort for more diversity, equity, and inclusion and it's important to ensure the company's capital goes only to suppliers that support similar values. These initiatives are vital to a company's success and important to employee wellbeing.
Understanding your company's best path
In order to make this all work, organizations must to actively listen to their customers to determine what they need and what's possible to offer. Customer experience (CX) management, a process allowing companies to gather daily feedback signals across a variety of channels, has long been the best way to understand these needs and is the best tool to drive retention and differentiate from competitors.
Keeping communication channels open and active provides hard data that leaders can use to make decisions. Proactively reaching out to suppliers and customers to understand their challenges will help organizations determine the right path forward and where they can best help.
In determining your approach to billing and collections, having clear insight into customer sentiment to help guide your decision making is vital for CFOs. And using CX to gather that insight positions company to improve retention and build strong relationships.
When the crisis subsides, companies with the best customer experience and strongest relationships will emerge stronger, and recover faster.