Why unreliable customers are worse than no customers at all - and what you can do about it.
Customers are the lifeblood of a business so you’d think that any customers, even unreliable customers, are important for business success, but that’s not always the case.
Before I explain why, let me define what I mean by “unreliable customers”.
Unreliable customers are customers that don’t hold up their end of the bargain.
In business, suppliers (in this case you) agree to provide products and services as promised and customers agree to pay for them as promised. Pretty simple.
At their worst, unreliable customers don’t pay at all. Other times they pay, but not on time or as expected, which affects your cashflow and your ability to run your business properly. These are short-term transactional issues for your business that are tied to customer behaviour.
Thinking about it from an income perspective is one way, but you should also be thinking about customer reliability from a cost perspective.
All businesses have overheads and most bear marketing costs similar to their peers. These costs are often incurred whether you have customers or not. Once you actually service a customer though, there are additional costs added to the business that need to be recovered. That might be the cost of materials, or employees/contractor costs or even just your time.
Where you have problems gaining, or keeping customers you have income issues but you don’t have those additional costs. Where customer reliability is poor you have income issues but you also have those additional costs.
Because of these cost issues, in many senses, unreliable customers are worse than no customers at all!
Evenly PayPredict is a new way to understand customer reliability both initially, then ongoing. The ongoing part is critical because customer reliability changes, sometimes for the better, sometimes for the worse, over time and it’s important you’re on top of those changes.
PayPredict does this in an incredibly accurate way because our data science team creates AI-driven insights from hundreds of data sources, that we then distill into simple to understand information for you.
Our hope is that If we can make up-to-date reliability information accessible and engaging, we can empower you to make better decisions at a much earlier point.
Of course, we don’t leave you there. We also give you tools and suggestions for dealing with different types of customers, whether good or bad.
We also give you free access to scores and alerts from Equifax, Australia’s largest commercial credit bureau, which gives you insights into the risk that your customer’s business will run into problems or even fail in the next 12 months. That normally costs hundreds of dollars a month but it’s included with PayPredict.
There's much more but the first step is seeing where you are now with your customer reliability, which is as simple as connecting your Xero accounts to PayPredict for free and getting insights in seconds.
If Customers are the lifeblood of a business it makes sense to monitor for customer problems or changes in advance. There’s never been a simple way to do that. Until now.