Scenario #1:
“Good choice on this lotion, did you want me to ring it up?”
“How much is it?”
“$97.”
“Sorry I don’t have my wallet.”
Scenario #2:
“Good choice on this lotion, did you want me to ring it up?”
“How much is it?”
“$97.”
“Oh I don’t get paid until the 16th, I’ll buy it later.”
Scenario #3:
“Good choice on this lotion, did you want me to ring it up?”
“How much is it?”
“$97.”
“I only have $50. I’ll buy it next time.”
Scenario #4:
“Good choice on this lotion, did you want me to ring it up?”
“How much is it?”
“$97.”
“Oh I don’t have enough left on my card. Maybe next time.”
What is the common theme in these customer/staff interactions? That’s right, NO sale.
Our salon staff has several challenges to making a sale. They have to have the knowledge of the product they are selling. They have to have a relationship with the customer they are selling to. They have to be able to differentiate between the different products, and be able to show the value of the purchase to the prospective customer.
Unfortunately, even after doing all of that, a sale falls through because the customer does not have enough funds at the time of purchase. This may be an excellent customer, may have been tanning with you for years, but the employee was unable to make the sale.
“Good choice on this lotion, did you want me to ring it up?”
“How much is it?”
“$97.”
“Sorry I don’t have my wallet.”
“That’s fine, I can use the card on file.”
“But I only have $50 left on my card.”
“That’s ok, you can pay $50 now and the rest later. When did you want the balance to come out?”
“I don’t get paid until the 16th, can you charge me then?”
“Sure can! Here is the lotion, I know you will love it. I’ll put you in room #4!”
Meet Autobilling.
If your salon is a membership-based salon and big on EFT, you will love this feature. Autobilling is a feature that allows our customers to purchase products and services, pay a partial amount upfront, and the rest can be billed later to the card we have on file. This has been an amazing success for us, and has allowed our staff to close a lot of sales where in the past we would simply have to put the product back on the shelf, hoping the customer will come back and continue to be interested in the purchase. With Autobilling, the customer chooses how much they pay initially, how much they pay later, how they pay (Credit Card or Bank Account), and when it comes out of their account.
The other benefit that we saw with Autobilling is how much of the more high-end products we were able to move when the customer had the ability to split their payment. Not to mention, they get to use the service and the product on the day of purchase which is a big hit with the customer.
The side benefit of Autobilling we see is the longevity that results from an expensive product sale. The customer who buys a sample may tan twice and disappear, but the customer who has the expensive bottle of lotion is going to want to use it. Just by selling a higher-end product, we were able to keep the customer on the EFT membership longer.
Now I know what you are thinking. What if the card declines?
This is where a customized software solution differentiates from the rest. We have complete control over who you allow to Autobill, how much they can Autobill, what portion they have pay upfront, whether they can Autobill only services, products or both, how long they have to pay and everything in between. The software has customized logic built in to determine how risky it is to allow Autobilling to a certain customer based on their previous history with us, whether they have had declines and whether they have paid up or not. You are not allowing your product to just walk out the door, the software has already done the due diligence for you before it will allow you to Autobill.
Despite all the due diligence and checks in place, Autobills can decline just like EFTs can decline. However, our success rate on collecting Autobill past dues is much higher than EFT because the customer is still coming into our store to use the product they purchased.
The numbers speak to this fact. In the entire time, we have had Autobilling, our decline rate on Autobill has been 4%. Our success rate on collecting from the 4% is almost 100%, meaning unlike EFT declines, we collected on the entire balance on Autobills because these customers kept coming in to use the products they purchased.
But let’s assume we were not able to collect on that 4% decline. That 4% is the sale price of the product, not the cost of the product. Our actual cost is much less; which is the amount we stand to lose. But even with a full 4% decline rate, the 4% loss is negligible compared to how many sales were enabled simply because Autobilling was available.
Now consider this, our products and services have significant margins built-in. So if Autobilling is setup in a smart way where the customer makes at least some payment upfront, we now minimize our risk even further. Worst case scenario is that we make less than we would have if the payment had gone through, but we still make a profit on that sale.
And it’s fully automated. Instead of clicking the credit card button, the employees clicks on the Autobill option and completes the sale as usual. No one has to run a draft, it just happens and I get a report at the end of the day of all revenue collected through Autobilling. It’s that simple.
