using psychology to collect more payments more quickly

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using psychology to collect more payments more quickly

as we become more intelligent ...… if you want to persuade slow payers to pay more quickly then it’s worth understanding the psychological principles behind the influencing process.

Professor Robert Cialdini sets out six such principles in his book “Influence: The Psychology of Persuasion.“.

One of those is Social Proof, a principle that relies on people’s sense of “safety in numbers.”  

  • In other words,
  • * you’re more likely to work late if others in your team are doing the same,
  • * put a tip in a jar if it already contains money, or
  • * eat in a restaurant if it’s busy.

 

Case Study

In 2009, Britain’s tax system had a problem – too many people simply weren’t paying. The usual collection methods were being used

  • 1  letters to the late payers,
  • 2  interest charges,
  • 3  late fees,
  • 4  legal action …

But … in 2008 they only collected 57% ($290 million of the $510 million due).

Then, in 2009, they collected 86% by adopting a new approach ($560 million collected from the $650 million due).  

This is what they did. 

They used phrases such as

* “We collect taxes to make sure that money is available to fund the public services that benefit you and other UK citizens,” 
* “Even if one person fails to pay their taxes it reduces the services and resources that are provided.”
* “Nine out of ten people in Britain pay their tax on time.”

In other words, they appealed to people’s sense of civic duty. Sounds all very ‘woo woo’ I know, but it’s very effective.
 

other psychology posts
* did you hear about …
* robynne’s childcare centre
* wording for email reminders
* semantics are everything

 

By | 2020-03-05T04:35:08+00:00 January 8th, 2013|techniques|0 Comments

About the Author:

Have you ever wondered why a client does business with you and then ignores your invoice like they had no intention of paying it in the first place or they treat you like their own personal line of credit, leaving YOU dangling, waiting months for their payment? Unfortunately this situation is all too common and can even be puzzling for the most experienced business owner. If you’ve ever had to handle outstanding accounts or you are just so over non-payers, then we can help. Real-world skills, solutions, tips & strategies to get more accounts paid on time, and, most importantly, how to maintain customer goodwill while keeping YOUR cash flow in the positive. You will find the blog posts helpful but to get real results, contact us by using any of the forms on this site, by email or by phone. I’ve been involved in the management of accounts for over 30 years, heard every excuse in the book, can spot a non-payer at 20 paces. Finance Companies in the 70s (systematic, tough), professional firms in the 80s (no systems, too gentle) and, since then, just about every other sort of business you can think of. I’ve written books on the topic, spoken all over the place about it and the blog in this website is my way of “giving back”. I hope you find it helpful.

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