Five Mistakes Companies Make With Their Invoices
Innovate, don’t make the same mistakes
Competition is getting stronger. Managers are asking to “do more with less to keep customers happy”.
I found a gem where many see nothing. Invoices.
Companies all over the world issued billions of invoices this year.
Businesses will make the same mistakes with invoices in 2023. I bet your company is doing four out of the five mistakes.
The humble invoice is one facet of the wider customer engagement strategy. It is a simple way to make a huge impact.
- Confusing format, with information overload
The invoice should have what the customer needs to understand it and be able to pay it. Use color, shapes, contrast and positions to drive the key points of the invoice. The invoice should have outcomes for customers, not charging points in your workflows. Don’t say “security door installation — DAT” (delivery, adjustments, testing). Include the peace of mind the new security door brings. Mention how you delivered the right model, fit and colour. You made the adjustments and lubrication for a perfect fit. Finally, you tested it to ensure years of happy and care free use.
2. Obscure and exotic charges
SKUs codes, product and services with internal codes mean nothing to customers. Never have the “Other”, “Miscellaneous” or “Workshop Charges” items. It looks sloppy and lazy. No one wants to pay for “Other” or “Miscellaneous”, they have zero value for a customer.
3. Free and $0 charges, messy discounts
Include all charges at full price. Apply the correspondent discount after the charge. Customers can see the full value of what they’re getting, compared to the full price. There is a better way to announce price increases. Start the invoices with the new prices a few cycles before they become active. Discount the upcoming higher prices down to the current prices. Make sure customers know how special they are. Outline the discount they get by staying your customer.
You may have legacy and loved customers on old tariffs, but you moved all new customers to a higher tariff. New customers may mention the lower price you give some they know. You don’t have to explain anything. It’s clear how you charge them the same prices, but good and trusted customers get a reward. This is your commitment to long lasting customer relationships.
4. Tone, look and feel is like a traffic fine
The invoice should be a celebration. Customers get awesome value. Each one of them. They should get the excitement of a new car, a plush sofa for their kids, or a new and leak-free roof. The problems are over, once they paid the invoice! Never have demanding phrases or jokes about collectors.
5. The invoice is the end of the engagement
This is a wider product and service strategy problem. Companies need to identify ways to provide on-going value. A first successful commercial engagement opens the door for more. The invoice can have a discount code for future purchases, or upgrades, including consumables. A new or existing customer will start using a new product or service. This is a starting point for future opportunities and not the end of opportunities.
Customers should have a closed feedback loop with the people invested in their success as customers.
Bonus point: Companies think an invoice is just an invoice. Yes, invoices have a primarily role, but they can be effective at playing other roles. Send commercial offers structured as invoices. Has it been 10 years since the customer installed a hot water system? Let them know you have a new and more efficient model, in case they plan on replacing it. Have a clear, time limited, call to action for a new hot water system, with a price available to customers replacing their old units. Customers can accept the offer and have a new hot water system installed in no time. Going back to the security door example, offer an inspection and lubrication service every two years. You can discount it from $x to $0, not for free! Send the discounted invoice when the time is up for the customer to book the inspection. Remind them of the great deal they got. Use the opportunity to inform past customers about the latest products and services. Provide marketing materials for neighbours, friends and family. People remember what is recent. Be a recent, good memory for as many customers as possible.
Close the feedback loop and find out what customers are thinking about your products and services. Improve and repeat.
What other mistakes and missed opportunities have you found? Are you ready to change invoices from boring to the hot topic in your business?
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