This article is about people who don’t pay on time. Those people make your job of running a business a lot harder.
People sometimes forget to pay for fitness classes. And, they forget to pay on an inconsistent basis. Some months are fine and you get everyone paid on time, and others are not.
When this happens, this slowly creates chaos in decision making. Without a steady income, it’s hard to make hiring decisions, equipment purchases, expand your business, and decide upon anything else that requires predictable revenue.
So, how do you get customers to pay on time?
Having a clear system is the key to reducing late payments
It’s awkward to chase payments. When you try to catch people at the start of class, it interrupts their intention to exercise. When you try to catch them on the way out, it feels like you’re literally chasing them out the door like thieves.
To avoid awkward payment situations, we suggest linking payments to booking; to have a system in which if your customers don’t pay, they can’t reserve their spot.
With online booking and payments together, you can collect payment without making it personal.
Combined with online booking, as one fitness business owner says: “the best part of having online booking is that now is that customers chase me for catch up sessions.”
Move away from cash or adhoc payments
Any payment method that means that customers can forget to pay is a problem. It’s bad for you, and it’s bad for them - it’s embarrassing to be late on payments.
People have busy lives - you aren't helping them by making payments stressful. And late payments can be devastating for you because they eat up your peace of mind and ability to think clearly about your business.
A worse solution is to try and punish your customer. Late payment fees sound like a great idea but they will upset your community, and you'll rarely collect them and push your customer out.
If you have to take cash, then make sure it's in advance (see below). But, most fitness businesses really don’t need to take cash.
Introduce automatic online payments
The best solution to the late payments problem is a new system: regular, scheduled payments, and pre-payments before class.
This hands off system allows you to focus on your business and your customers instead of payments, and it gives you clear and consistent reporting on your business’ revenue.
Automatic online payment systems are impossible without booking tools, so when you’re looking at the cost of an online payment system, you should look for a booking system that includes payments. To learn more about how payment systems work, check out [LINK TO ARTICLE].
Do customers like online payments?
We’ve seen again and again that customers prefer making online payments. This is especially true for regular customers of fitness businesses, who like to “set and forget” their automatic payments. And, with software like TeamUp, you can offer a variety of payment types. This suits customers. Some people love cards, others prefer direct debit.
If you don't want to take recurring payments then sell packs. It keeps people more accountable than selling individual sessions. You can then set rules about no-shows and late cancellations.
Incentivise your preferred method of payment
If you really want to get people onto recurring monthly (or otherwise) payments then you don't need to force customers. Instead, offer several options and make the one you want to sell the best value. Add extra value or just make it a lower price. You will do better, have more peace of mind, and enjoy more stable cashflow.
Clear and simple agreements and systems
It’s very important to set clear rules about payments. Customers should understand these rules, and your employees should memorise how to handle different scenarios. Being transparent and straightforward with customers from the start sets up expectations and ensures good business relations.
And, if you’re using TeamUp, you can set reminders and automations to ensure that whatever the problem, the system takes the strain. This is an oft-used tactic of business owners. Don’t want to give a refund? Blame the booking system!