Related Credit Card Article

"Make sure your customers bad credit doesn’t become your bad credit"

By admin | November 23rd, 2011 | Featured

Thanks to advances in marketing technology, it’s never been easier for consumers to become your customers. The interactive potential of direct marketing campaigns through mobile phones, email and the internet, combined with the immediacy of internet banking technology, mean that potential consumers can sign up to buy or subscribe to your product in seconds at the click of the button. This is great news for business owners of course, but the ease and speed with which customers can commit to sometimes quite significant transactions also pose a risk. Without the proper vetting procedures in place, customers with poor credit ratings can slip through the net, and if you haven’t provided for such an eventuality, that bad credit can soon start to affect your credit rating through unpaid goods and services that knock on to your own debt sheet, seriously affecting your business in the process.

There are ways to combat this problem, first and foremost, getting the appropriate affordability assessment of each and every one of your customers. While that might sound like quite a daunting task, thankfully, there are organisations whose business it is to do exactly that.

You might wonder what exactly an affordability assessment does. Well, quite simply, it’s an assessment of whether each customer can afford to pay the sum they owe you. This is achieved by asking the customer for basic information, with which a computer can access their credit history and work out their personal credit risk – simple and effective. These assessments can then be repeated during the period your customer is in debit to you, enabling you to know exactly where you stand.

Now, you might think this sounds invasive and unnecessary, surely when a customer agrees to terms and conditions they are required to pay by law? But it’s not that simple. Should that person prove to have a poor credit history and be unable to pay, it could take months before a debt collection agency can retrieve your money, or worse, they could actually go bankrupt, leaving you out of pocket. In the meantime, that money owed is leaving a serious red mark on your debt sheet.

Key to targeting customers with good credit ratings, and fundamental to all direct marketing, is good quality data, used in the right way. Using cheap email lists bought online might seem like a good idea at the time, but that could be next to worthless in the long run, and lead to poor customer relationships, if any. The best way to guarantee good data is to collect it yourself, so you know that you targeting a willing, reliable audience. Transforming that data into a marketing database you can use has never been easier, once again thanks to devoted direct marketing agencies whose business it is to do this for you. In the long run, better quality data means increased customer acquisition, and customers of quality you can rely on in the long term.

To make sure you have all your bases covered when it comes to direct marketing and customers acquired that way, and to guarantee you keep your business and your balance sheet clean, it’s important to be up to date on the relevant rules and guidelines. As with any business, these are in place to protect both you and the customer.

Tags: course, banking technology, best way, good idea, Banking, technology, Business, risk

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