fbpx

5 Different Types of Employee Bonus Programs

Does your small business give employees bonuses? If it doesn’t, here’s a thing to consider. As a small-business owner, you know employees are your greatest asset. Showing your appreciation helps keep your best and brightest on the payroll. Employee bonuses serve the dual purpose of motivating employees to do their best while rewarding them for their contributions. Learn how you can start doing it below.

Does your small business give employees bonuses? Almost three-fourths of companies do, according to PayScale’s 2018 Compensation Best Practices Report. Giving bonuses (also called “variable pay”) allows companies to reward top performers without increasing their fixed costs for salaries. Top-performing businesses are more likely to offer bonuses than the average business (79% vs. 70%), PayScale reports. According to a 2018 WorldAtWork survey, bonuses are becoming more popular, especially among small and midsized companies.

Employee Bonus Programs

Here’s a closer look at the most popular types of employee bonus plans and how to make them work for your business.

Annual Individual or Team Incentive Bonuses

Annual incentive bonuses are given to individuals or teams that achieve goals set at the beginning of a performance cycle. More than two-thirds of companies in PayScale’s report use individual incentive bonuses and 23% use team incentive bonuses. Team incentive programs are best used when group effort is required to lead to a measurable result and individual efforts are difficult to quantify.

To Create a Motivating Annual Incentive Bonus Program:

  • Set clear, consistent and measurable goals that are tied to the individual or team’s roles.
  • Employees should understand how their actions relate to the overall goals. Team incentives can cause problems when “moocher” employees who don’t work as hard as their teammates benefit from the group effort. To avoid this, make sure that achieving the goal you set requires the efforts of the entire team.

Spot Bonuses

PayScale says 39% of companies use spot bonuses, which, as the name suggests, are given on the spot to reward desirable behavior. For example, you might give a spot bonus for going above and beyond, or for providing exceptional customer service.

At big companies, spot bonuses can be several thousand dollars. But for small businesses, you’ll want to keep them reasonable — $25 and up will work.

To Create a Motivating Spot Bonus Program:

  • Create different levels of spot bonuses. You might give out very small rewards, like a $25 gift card, for being the most energetic person in the company trade show booth, on up to $500 or more for a truly above-and-beyond action.
  • Set a budget. Giving out spot bonuses could quickly eat up capital if you don’t set a limit. Create an annual budget for spot bonuses and don’t feel like you have to use it all if you don’t see deserving employees.
  • Make it count. Give spot bonuses for truly exceptional behavior, not just for doing the job.
  • Make it a surprise. If spot bonuses become rote — employees know every week two employees get one — they lose their power to motivate. Keep employees guessing and give spot bonuses irregularly.
  • Publicize it. Part of the reward of a spot bonus is getting singled out in front of your teammates for your work, so make sure you award spot bonuses in front of the rest of the staff. You can also publicize it by sending out a company-wide email or making an announcement.

Referral Bonuses

Referral bonuses are used by 39% of companies, PayScale says. They’re offered to employees who refer job candidates who get hired and complete a probationary period with your company. The theory is that birds of a feather flock together and, if someone is referred by a good employee, there’s a strong chance they’re likely to be a good worker themselves.

To Create a Motivating Referral Bonus Program:

  • Develop a policy. Do you want to offer referral bonuses for every job, or only for certain positions? Do you want to have an ongoing referral program, or just alert employees at specific times you’re looking to hire and ask for referrals then?
  • Determine how you’ll handle payouts. Some companies pay out part of the referral when the employee is hired and the rest after they complete a probationary period of three months or six months. Others give the entire bonus at the completion of the probationary period. Either way, make sure your policy is in writing.
  • Consider offering higher referral bonuses for:
    • Referring candidates who increase staff diversity.
    • Referring candidates who turn out to be high performers.
    • And referring candidates for hard-to-fill jobs or with unique skills.
    • Depending on the difficulty you’re having finding candidates, you could even offer a very small referral bonus (like $25) for referring people who are worth calling in to interview, but don’t get the job in the end.

Signing or Hiring Bonuses

Signing or hiring bonuses (given upon hiring) can attract and motivate new hires — 34% of companies in PayScale’s survey use them. Although they’re less likely to be used by small businesses, signing bonuses might be a good idea if:

  • They are standard in your industry. For instance, signing bonuses are common with IT employees.
  • You need to attract a candidate with hard-to-find skills.
  • You need to motivate a desirable candidate to move from another state.

For small businesses on a budget, a signing bonus can enable you to land desirable employees at lower starting salaries. Of course, signing bonuses can also backfire if candidates use them to job-hop.

To prevent this, it’s a good idea to stagger your signing bonus. You might pay half of the bonus at signing, then one-quarter after the employee has worked for six months and the rest at the end of the year. Some companies also institute “clawback” provisions where employees who quit a job before a year is up must return a percentage of the signing bonus.

However, don’t expect to rely on signing bonuses as your sole attraction and retention tactic. You need a comprehensive plan of employee development to keep these desirable workers motivated and loyal beyond the first year.

Profit-Sharing Plans

Profit-sharing is more popular among small and midsized businesses than their larger counterparts — 22% of small companies in PayScale’s 2018 Variable Pay Playbook use it. These plans give employees a percentage of the company’s quarterly or annual profits. If you have a better-than-usual year, employees benefit. Profit-sharing plans can be tied into your company 401(k) plan, with the profits distributed as contributions to the retirement plan or can be on a cash basis.

To Create a Motivating Profit-Sharing Plan:

  • Profit-sharing plans tend to be very motivating because they give employees a sense of ownership in the business. Make sure employees understand how the profit-sharing plan works.
  • Set parameters for who can participate. Typically employees must have been with a business at least one year before taking part.

Profit-sharing plans, especially if tied to 401(k) plans, have specific regulatory requirements, such as keeping certain records, meeting reporting requirements and setting up a trust for the funds. Talk to your accountant or a third-party financial advisor to get assistance. Read the Department of Labor’s Guide to Profit Sharing Plans for Small Businesses for more information.

Bonus Structure Tips

  • Know how much money you have available for the bonus plan. In the case of spot or discretionary bonuses, this might be a dollar figure (you set aside $5,000 a year). In the case of longer-term bonuses, such as incentives or profit-sharing, this could be a percentage of profits or earnings.
  • Base the plan on quantifiable, measurable results. Specify what the goals are, how progress toward goals will be measured, and how often.
  • Consider setting “tiered” goals so that employees can reach different bonus levels by achieving more difficult goals. For example, a worker might get $X amount for reaching the minimum goal, but $XX for reaching the maximum.
  • Put your bonus plan in writing.
  • Make sure employees understand what they have to do to get the bonus. Review the plan with the entire staff as well as with individuals (in the case of team or individual incentive bonuses).
  • For long-term bonuses, setting milestones along the way and reviewing progress toward the end goal quarterly can help keep employees focused. You might even want to give small bonuses at these checkpoints.

You don’t need to do everything on your own. From billing to marketing, including credentialing and patient eligibility verification, Perform Practice Solutions can help. Give us a call today at (833) 764-0178 and join our Facebook community for more physical therapy billing solutions and ideas.


Reference: [https://smallbiztrends.com/2019/05/employee-bonus-small-business.html]


20 Ways to Communicate Effectively With Your Team

It’s essential for every PT practice to provide clarity around the company’s vision and mission to inspire their teams. The point of working as a team is to share ideas and boost productivity. Encourage a peaceful work environment by following the tips below.

Effective communication in the workplace is imperative in a leadership role. An age-old aphorism goes, “It’s not what you say, but how you say it.” Good communication is what separates a poor leader from an exceptional one. Having effective communication skills is the key to good leadership.

When you communicate well with your team, it helps eliminate misunderstandings and can encourage a healthy and peaceful work environment. Efficient and open communication with your team will also let you get work done quickly and professionally.

The moment you get the lines of communication open with your team, the process of carrying out tasks and projects will most likely go by smoothly. Plus you will be surprised how meeting targets will become a whole lot easier.

Ways to Create Effective Communication in the Workplace

1. Open Meeting

It is easier to communicate your passion and how you feel to your team via open meetings. In this kind of forum, they will not only hear what you are saying, they will also see and feel it. This approach still remains one of the best approaches to communicate effectively with a team.

2. Emails

In official settings, communication via email remains potent. It will enable you to pass messages to members of your team without pulling them out of their workstations.

3. One on One

Experts have been able to prove that some people understand better when you take them aside and talk to them on a one-on-one basis. Ensure that you maintain eye contact with them to enable the message to sink in.

4. Create a Receptive Atmosphere

To effectively communicate with your team, you must create a receptive atmosphere. Avoid a tense environment at all costs because when you communicate in an overly intense manner, the message you are trying to share might not be well understood or retained.

5. Communication via Training

Your training should be tailored towards communicating certain information to your team members. Most employees take training serious, especially when it’s part of their appraisal.

6. Display Confidence and Seriousness

Ensure that you display confidence and seriousness to ensure that you will not be taken for granted. When your team members notice any uncertainty and lack of seriousness when you’re communicating with them, they are likely to treat the information with disdain or disregard.

7. Use Simple Words

The truth is that everybody cannot be on same page when it comes to vocabulary. Therefore, to be effective in your communications with your team members, use words that can be easily understood. When ambiguous words are used, you can be misunderstood and/or waste precious time having to explain yourself.

8. Use Visuals

Place visuals at strategic positions around the workstations of your team. They should not just hear the message, they should also see it. This gives room for better comprehension.

9. Listen to Your Team Members

Communication is intended to be a two way street. Don’t just talk because you are the leader without listening to anyone else. Encourage them to open up so you can be well guided when communicating in the future with them. You have two ears and one mouth –so you must listen more than you speak.

10. Use Body Language

Your body language will pass your message faster and better. Master the art of using body language when communicating with your team. Stand/sit up straight, use smiles, handshakes and eye contact.

11. Act Out Your Message

Someone once said, “Tell me what you want me to do and I might forget it, but do it in front of me and I will never forget it.” Acting out your message is a very potent way of communicating with your team. Let them see you do what you want them to do, and watch their excuses disappear.

12. Use The Appropriate Tone of Voice

One word can mean a different thing when said in a different tone of voice. Make sure you use the appropriate tone of voice to communicate your message to your team so that you won’t be misunderstood and discourage or demotivate members or cause them to shut down completely out of fear.

13. Avoid Unnecessary Repetition

If you want your team members to take you serious, never sound like a broken record and don’t beat a dead horse. Tell your team members what you want them to know or do and ask them if they are clear about it. If they are not, only then do you repeat what you have said.

14. Use Presentations

Some people grasp messages easily when pictures and sounds are involved. Using presentations like Microsoft PowerPoint to communicate with your team will give them the opportunity to refer back to it if they aren’t clear about certain things.

15. Be Humorous

Using friendly jokes when communicating with your team members will help pass your message along in a more relaxed way. This method of communication has been proven to be a highly effective way of dousing tension. When the atmosphere is unfriendly and intense, being humorous does the trick. If you must use jokes, please don’t overdo it. Remember, you are not a stand-up comedian.

16.  Be Articulate

Communication is indeed a skill that must be learned by all, especially if you want to lead any group of people. Being articulate  when you communicate to your team members makes it easier for them to understand your message.

17. Avoid Mumbling

Your team members should be able to hear you clearly. When communicating with them, try as much as possible to speak clearly and not mumble words. When you mumble words or speak too quickly, you may assume that they are clear on the subject. But the truth is, they might not be. It also shows a lack of confidence on your part.

18. Encourage Feedback

Don’t just talk and walk away. Give room for feedback so that you can measure the effectiveness of your style of communication. It will also afford you the privilege of knowing if your message was well understood.

19. Gesticulate

Use your hands to demonstrate your message. Make hand motions and signals to establish the seriousness of your subject matter when communicating with your team members. This shows that you understand what you are trying to relay to them. Just don’t let your body movement become too exaggerated and intense.

20. Be Appreciative

After every communication session, via whatever means you have decided, always remember to thank your listeners for their time. It will cost you nothing and it’s a simple courtesy.

Remember that the point of working as a team is to share ideas and boost productivity. When effective communication in the workplace is hampered, it can sidetrack the entire effort.

You must work hard at these communication tactics and create ground rules to keep everyone up to date, which helps avoid confusion and ensure the completion of the project with ease.

You don’t need to do everything on your own. From billing to marketing, including credentialing and patient eligibility verification, Perform Practice Solutions can help. Give us a call today at (833) 764-0178 and join our Facebook community for more physical therapy billing solutions and ideas.


Reference: [https://smallbiztrends.com/2013/11/20-ways-to-communicate-effectively-in-the-workplace.html]


12 Essential Strategies For Building A Sustainable Business

Most businesses don’t have a thorough understanding of sustainability. From a broader perspective, a sustainable company is one whose purpose and actions are equally grounded in financial, environmental, and social concerns. The road to sustainability for most businesses is not easy. Below you can find some ways to shape a more sustainable future for the company as well as their community.

Every business decision has an impact on the longevity of the organization. That’s why each decision by leaders must be carefully made, considering the perspectives and direct feedback from the employees and consumers being impacted.

Sustainability is the true goal and without a plan, leaders run the risk of building something that won’t be able to withstand the storms of the business industry. To help entrepreneurs create and maintain sustainable organizations, 12 members of Forbes Business Council share their tips for building a business that can last long term.

1. Remain Focused But Flexible

The key to building a sustainable business is having crystal clear goals, yet staying flexible enough to evolve when internal or external factors illuminate the need for a different or more nuanced approach. Also, welcome the reality that success no longer equates to the relentless pursuit of profits at the expense of people, communities and the planet. – Erin Boyd Kappelhof, Eat Well Global

2. Put People First

Sustainable businesses depend on invigorating and energizing team members to think long term and prioritize positive externalities and gains for the community beyond purely self-oriented growth. This requires leaders putting their people’s well-being ahead of other objectives. Doing so creates a virtuous feedback loop that drives sustainable thinking across the organization. – Manik Suri, Therma°

3. Constantly Innovate

The key to building a sustainable business, especially in technology, is the constant focus on reinvention and innovation. Every major business decision must reinforce the belief that we are building a learning organization that is focused on innovation. This is innovation not just in technology, but across the organization as well. – BK Nayak, SPIKEWELL

4. Invest In Your Team

Nurture and develop your people. Ask your employees what they want to do and how they want to grow both personally and professionally. Invest in training for them. Show authentic interest in their interests and family. Make sure the business is doing excellent work that they are proud of. Compensate them well, surprising them from time to time with meaningful gifts or experiences. – Natasha Miller, Entire Productions

5. Integrate And Maintain Your Strong Core Values

Strong core values that you integrate not only with your team, but also with your customers are key. When identifying our target market client, we focus on the psychographics of the clients we want and ensure they align with our values. When we take this approach, our relationship with our customers is deeper and longer lasting, which also contributes to the growth and sustainability of our business. – Jaime Taets, Keystone Group International

6. Practice Patience

Recognize that not every aspect of building a business is a sprint; it’s more often a marathon that requires patience, due diligence and an unwavering allegiance to your core values. Speed is overrated and at some point it becomes reckless, so building from the vantage of being in it for the long haul can pay dividends over time. – Chase Warrington, Doist Inc.

7. Communicate Transparently With Clients

The key to building a sustainable business is through accelerated communication. I define accelerated communication as maintaining real-time transparency between a business and its clients. Whether execution of a sale goes as planned or faces challenges, a client should always be kept up to date. – Jesse Singh, Maadho

8. Balance Business Needs

The key to building a sustainable business is to create balance. Successful companies constantly monitor their environment, take calculated risks and look for ways to innovate to find the perfect balance. The most important thing in finding this balance is to measure what you’re doing and listen carefully. You might be overlooking an opportunity or not understanding the market’s current needs. – Chakri Toleti, care.ai

9. Aim For Continuous Improvement

There are multiple factors involved in building a sustainable business, such as hiring the right talent, having milestones and a long-term growth plan, finding the risks and opportunities quickly and more. But in order to succeed in any of those, you have to implement a continuous process of improvement for all of your departments as well as for the quality of your service or products. – Ali Payani, LookinLA

10. Seek Customer Feedback

Build for and by your customers. Too many organizations make finite business decisions for short-term profit and loss benefits. Leading brands utilize customer feedback to steer business decisions for their top stakeholder: customers. – Zack Hamilton, Stingray Group, Inc

11. Create Diversified Revenue Streams

Prepare to survive ups and downs in the market by creating diversified revenue streams to mitigate high concentration in one area or dependency on a single customer. Pinpoint succession candidates for your key positions to prevent disruptions to operations. And lastly, invest in the diversity of backgrounds and experiences at all levels of your company to enable the building of innovative services at a faster pace. – Dana Kohut, The Prime View

12. Be Consistent

Consistency with long-term strategy is the number one differentiator between good decisions and bad ones. Leaders should be wary of making decisions from a place of stress or fear, rationalizing “temporary” measures. This is the definition of short-sighted decision making, and all too often will undercut key pillars of their strategy. – Dustin Snyder, Wayforward Associates

You don’t need to do everything on your own. From billing to marketing, including credentialing and patient eligibility verification, Perform Practice Solutions can help. Give us a call today at (833) 764-0178 and join our Facebook community for more physical therapy billing solutions and ideas.


Reference: [https://www.forbes.com/sites/forbesbusinesscouncil/2022/02/25/12-essential-strategies-for-building-a-sustainable-business/?sh=5232aa347d5e]


‘Learn To Fish’: Why Management Skills Are More Crucial Than Cash

Solid management practices — rather than focusing solely on money-making endeavors — can imprint a huge difference in your company’s performance. Work on managing your practice well and watch how it impacts your opportunities for the long haul. Keep reading, and learn how to place a focus on management practices in your practice. 

According to Facebook’s data, nearly one-third of all small businesses permanently shut down during the pandemic. If you asked the owners of those businesses why, I’m willing to bet they would list “money”–or lack thereof–as the reason for their closure.

Every independent business owner thinks money is the number one thing they need to survive. While it is crucial, what they really need is a clear focus on management practices in their business.

In my world, here at American Management Services, those practices are boiled down into something I call The Four Solid Management Practices:

  1. Profit Planning
  2. Know True Costs
  3. Discipline In All Aspects (Manage By The Numbers)
  4. Key Performance Indicators (KPIs)

I’ve gone into detail on most of these practices in prior articles, but here’s a quick recap:

1. Profit Planning

Most owners, especially ones we meet with, think that whatever money is left over at the end of the year–after all expenses have been paid–is considered their profit; this is residual profit. Residual profit relies on ‘hopium,’ or false hope to turn a profit.

At American Management Services, we believe profit should be the first line item of expense. Named ‘Pre-Determined Profits,’ this means every set number of pennies from every dollar you incur is marked as profit.

How many pennies your business generates from every dollar is determined by your business model and management practices.

2. Know True Costs

Do you know what it truly costs to run your operation: By the hour; employee; or by line of business?

Understanding your actual operating costs will allow you to set realistic pricing in your bids/estimates/quotes. You could be seriously underbidding your products and services without it, leading to disastrous results.

3. Discipline – Manage By The Numbers

Once you understand where you should be, you now need to establish a goal to generate sales at that margin. Eliminate any guesswork around where you think you should be versus where you really are.

Your plan should be aggressive but maintain a degree of realism. And I can’t stress this enough: Make sure this is written down and communicated amongst those directly involved in turning goals into realities.

Break this down further by implementing KPIs and tying key managers to pay-for-performance.

4. Key Performance Indicators (KPIs)

Key Performance Indicators, or KPIs, measure goals against quantifiable data over a specific period.

Also known as flash reports, KPIs offer a way to track how you achieve your goals on broad and minute levels.

A KPI measures the goals of the business against the actual, quantifiable data over a specified period. Set goals for each aspect of your business in your pre-determined profit plan, then monitor your performance with KPIs and make the necessary adjustments.

Key indicators can differ for multiple businesses; a distributor’s KPIs will differ from a manufacturer’s, and so on and so forth. Even like-companies can have varied KPIs as not every business shares the same goals and metrics.

A New Approach To Managing Your Business

I mentioned the Four Solid Management Practices because if you implement them-and do so correctly-you will undoubtedly reap benefits.

It’s not a lack of money that kills businesses, it’s how they manage every aspect of their business that does them in.

Remember the old “teach a man to fish” adage? The same philosophy applies here.

While money is crucial for paying your employees and expenses, think of cash as a “fish.” I’ve seen owners borrow against their lines of credit to stay alive. That doesn’t solve a problem, it just adds to it.

Owners need to focus on solid management practices instead of hoping their business makes money. Essentially, for you owners reading this: “Learn to fish.”

Has to make you sick to borrow, run up line-of-credit, get federal handouts, et cetera. Follow the four principles I mentioned above to have the peace of mind most owners wished they had. If you need help, feel free to reach out to me via LinkedIn.

You don’t need to do everything on your own. From billing to marketing, including credentialing and patient eligibility verification, Perform Practice Solutions can help. Give us a call today at (833) 764-0178 and join our Facebook community for more physical therapy billing solutions and ideas.


Reference: [https://www.forbes.com/sites/louismosca/2022/01/04/learn-to-fish-why-management-skills-are-more-crucial-than-cash/?ss=small-business-strategy&sh=208f97b35b7a]


Humanizing the Customer Experience with Technology

Customer experiences are being radically reshaped continuously by technologies that are cutting edge and ever-evolving. However, human interaction and empathy are still key in creating a positive customer experience. That’s why companies must focus on an effective personalization plan. Check out some ways you can humanize your client’s experience so that your patients can have their unique needs met – and they return for more of your excellent service and care.

Technology enhances business. It allows companies to operate faster, more efficiently, encourages collaboration, and in return creates growth. However, human interaction is still key in creating a positive customer experience. Taking into account of the last year, with companies forced to rapidly digitize, many business leaders have grappled with the challenge of humanizing customer experience with the new technologies that have been implemented.

Yet, in order to create a customer experience that streamlines the buying process while customizing to fit the consumer’s needs, companies must focus on an effective personalization plan that encourages customer loyalty, customer growth, and an increase in revenue. Personalization and customization are key in targeting a customer base and to make sure a business is serving their specific needs.

According to a Gartner survey 88 percent of consumers report not receiving “tailored help”, and to make matters worse brands are at risk of losing 38 percent of customers because of poor marketing personalization efforts.

Businesses often get consumed by return on investment metrics and pressure to show results, but before the focus on this, business leaders must hone in on serving their customers to seamlessly guide them through a personalized journey. Like the saying, “if you build it, they will come”, taking the time to personalize the customer experience will in return create increased customer loyalty, increase in driving sales, and positive customer experience within a business.

How to Humanize Customer Experience

Create a Hyper-personalized Customer Journey Plan

Companies tend to forget the minutiae included in one single customer journey. When generating a plan to enhance personalization and efficiency, business leaders must take into account aspects such as how interactive and easy to use the website is, how products or services are outlined, the sales process, invoicing process, communication and support.

Customers are looking for companies that provide personalized experiences that are relevant to them specifically, rather than repetitive processes that make the journey seem robotic.

A way to make hyper-personalization naturally occur is by using technology tools that remember documentation when needed the most. For example, if a sales person is on a call with a customer and can see in their CRM tool that the customer had a support ticket two weeks ago on the same issue, they’ll have better context and be able to provide a more customized experience.

Another way to hyper-personalize and humanize customer experience is through technology that provides suggestions based on buying patterns. For example, if a business sells clothing and the user has viewed a specific style of clothes on the site, the technology can generate a suggestion such as, “Since you viewed this, we think you may also like this”.

By using tools that are completely customized to the consumer’s preferences, the business achieves a hyper-personalized and streamlined customer experience. While it may seem like a lot of work to take inventory of these individual aspects, having a plan in place with technology to assist will help businesses create customer experiences that impress and keep customers for the long haul.

Use Smart Technology to Enhance Personalization

Using technology that connects with your customers on multiple channels such as telephone, email, live chat, and social media ensures strong communication so that customers are left with all their questions and needs met. Additionally, utilizing workflow automation will help streamline the lead nurturing process, which is important when wanting to make things as easy as possible for the customer.

AI is also a way to increase efficiency and help enhance personalization. AI can be used in the customer journey to generate advanced lead and deal predictions to help businesses identify specific leads and where they are in their customer journey. It can also help with finding important information from the CRM, sending task reminders, alerts, and suggestions for the best times to contact leads based on your past interactions so that you can provide a preferred experience for your customer.

Also, businesses can utilize AI for sentiment analysis to prioritize which emails should be addressed first. For example, if a consumer sends an email about a negative experience with the business, AI will identify the displeased feedback and flag the email so that it’s addressed first. There are so many technology options out there that help with streamlining and automation, by discovering tools that also help with customization will be essential.

Analyze to Nurture New Clients and Current Ones

While metrics and data points are vital in showing ROI, using analytics to detect buying trends and other data trends around the customer will enable your business to gain new clients and current ones. Using analytic tools that track key performance indicators, including current trends and future predictions will be a critical aspect of the data strategy.

Yet, before diving into the technology, business leaders must ask themselves what key information about the customer they’d like to understand and how this data will help to create a more personalized experience for the customer.

For example, analytics can be used to find out what patterns are critical for customer satisfaction. If the analytics tool detects that consumers that purchased a specific service keep submitting support tickets for the same problem, having that data will help the business quickly find a solution to avoid customer churn.

Along with these questions, business leaders must recognize how they are collecting data to uphold ethical data privacy principles and strong security measures. With the surge of customer data being tracked and collected for monetary gain, companies must consider privacy concern and scrupulously examine the technology vendor they decide to use.

Consumers are rightfully concerned about how their data will be used, and it’s important to ensure that customer data stays private. At the same time, customers are more willing to provide personal information if their customer experience is hyper-personalized. With this in mind, businesses must aim at finding a harmonious balance with creating a personalized experience without jeopardizing consumer data.

Saying technology can make business more human sounds like an oxymoron, but when used the right way technology can enrich the customer experience to fit the unique needs of an individual customer. Because most companies have digitized in the last year, competition for enhancing the online customer experience has risen drastically. This means having a streamlined customer journey is not enough to set a business apart.

However, the core lies within personalizing the customer journey so that consumers can have their unique needs met and exceeded. When it comes to humanizing customer experience, people want to feel special and taken care of; creating a personalized experience with technology that streamlines the buying process for your customers can achieve this, and in the end will be the crux of what sets businesses apart.

Perform Practice Solutions helps practice owners nationwide adjust to the industry’s changing and challenging reality. Our team has smart marketing strategies to offer your clinic an alternative way forward. Call us today at (833) 764-0178  – and also join us and be part of our Facebook community!


Reference: [https://smallbiztrends.com/2021/07/humanizing-customer-experience.html]


Recurring Billing Issues: 7 Common Challenges and How to Overcome Them

We know that recurring billing isn’t a straightforward process. Billing errors can and do happen – and happen often. However, they are 100% avoidable. Learn more about some common challenges and how to overcome them. Consider going beyond with a provider who has your growth in mind. Perform Practice Solutions offers a transparent physical therapy billing platform that shows you exactly where your dollars are, creating a streamlined system to optimize cash flow. You’ll actually have far more money in your pocket. Let us explain with a complimentary consultation to discuss.

Are you finding it increasingly difficult to manage your growing subscribers? Is retention becoming a challenge, or are you losing out on revenue opportunities like upselling? If you face challenges like these, then it’s likely that your billing has become a thorny issue.

You’re not alone – growing SaaS companies often find themselves grappling with the sheer complexity of the recurring billing process. If left unchecked, this results in high churn and low acquisition rates, which become roadblocks to your growth.

Here are some of the common recurring billing issues subscription companies may face and how you can overcome them:

  1. Unscalable Billing Infrastructure
  2. Loss of Revenue Due to Failed Payments
  3. Growing Complexity of the Invoicing Process
  4. Insufficient Operational Rigour
  5. Increasing Difficulty in Recognizing Revenue
  6. Lack of Third-Party Integrations
  7. Inability to Support Global Expansion

1. Unscalable Billing Infrastructure

Most subscription billing companies find themselves at a crossroads on whether to build their billing system or use one of the available solutions in the market. Building billing in-house may seem like a cost-effective option. However, in the long run; it is an inefficient solution for the following reasons:

Managing Growing Customers

As you scale, every additional subscriber, pricing change, supporting different payment methods, upgrade and downgrade requests, flexible billing, and prorations will exponentially add to the code complexity. At this point, running an in-house billing system will feel like running a second product within your core product, which brings us to the second reason.

Time Sensitivity

Any SaaS business on the road to scaling fast should be able to experiment with pricing, discount coupons, and trial management rapidly. However, with a substantial operational dependency on the company resources to maintain a homegrown billing system (still not as powerful as a third-party recurring billing solution), it might take months or more.

Compliance

Beyond operations, there’s also the matter of security. With your billing system collecting sensitive payment and personal information, compliance to PCI-DSS to a broader regulation like the GDPR and accounting standards like ASC 606 is a must.

On these grounds, it is more viable to use existing recurring billing platforms than building your billing in-house. Billing solutions like Chargebee can streamline your recurring billing, plug the revenue leaks, and make subscription management a breeze with features like:

  •       customizable billing logic,
  •       automated proration handling,
  •       grandfathering,
  •       usage-based billing,
  •       consolidated invoicing, and more.

The same holds if you’re deciding to go for a payment gateway rather than a billing software for two main reasons:

A growing business will soon outgrow the modest billing capabilities of a gateway.

Another fundamental advantage that a billing software has over a gateway is that it is designed to be integrated with multiple payment gateways and payment methods, which helps in;

o   market expansion through multiple payment methods, and

o   minimizing the risk of high payment failures that come with being locked in with one payment gateway.

For more details on the product-level (and service-level) capabilities, you should look for in a recurring billing system, check out our guide on getting started with subscription billing software.

2. Loss of Revenue Due to Failed Payments

It’s one thing when your customers choose to stop paying, but it’s more painful to lose revenue due to churn when your customers didn’t intend to stop paying – and that’s involuntary churn. It could happen for various reasons, from insufficient funds to maxed-out credit cards to even connectivity issues.

About 20-40% of churn is usually from involuntary churn. But here’s the good news – almost all of it is avoidable. For instance, Whiteboard reduced involuntary churn and increased their MRR by 35%.

You can reduce churn through superior dunning management. Dunning is the process of retrying payment attempts and sending payment reminders to customers when a transaction gets declined.

Here are a few methods that you can use to avoid loss of revenue due to involuntary churn:

  •       Pre-dunning emails – send out an email to your customer reminding them that their card details are about to expire.
  •       Backup payment methods – set up backup payment methods for each customer to immediately fall back on when the first payment method fails.
  •       Create dunning personas – group your customers into dunning personas based on their ticket sizes, geo-location, and what kind of payment process you have in place for them (invoice-based payments vs. automated card and online wallet payments). Use these personas to tailor retry cycles.

Additionally, it’s more effective to see the payment failure life cycle as a whole and implement tactics that complement each other through every stage. So, here’s a list of 23 ways to reduce involuntary churn across six lifecycle stages of payment failure.

3. Growing Complexity of the Invoicing Process

If you’re spending weeks creating invoices and chasing payments, it’s high time you choose to automate the process efficiently.

Here are a few steps to ensure you improve your invoicing process:

Say No to Cookie-Cutter Invoices

Invoices are often ignored branding opportunities. Billing materials like invoices and even dunning emails are great places to implement customization. A robust tool should enable you to tailor your invoices to your brand and your customer – including the color scheme, address format, payment details, and more.

Ensure Transparency

Charge exactly when your customers should be charged and charge precisely for what your customers use. Make sure all the information is broken down into a clear, understandable format.

Consolidate Invoicing

When you have a customer with multiple subscriptions incurring multiple charges for the subscription, instead of sending one invoice every time such a change occurs, it is more efficient to send a consolidated invoice.

Here’s a sample of an invoice that consolidates charges for a customer:

Don’t Invoice for Every New Charge

The creation of subscription-related charges should be kept separate from the actual invoicing. For instance, you can add them to unbilled charges. This becomes useful for businesses allow customers to make changes to the subscriptions in the middle of the billing cycle, like;

  • upgrades or downgrades,
  • switching to a different plan,
  • attaching add-ons in the middle of the subscription term, and
  • adding a one-time charge or any other additions or changes to the subscription.

Invoice in Advance

Sometimes customers want to send an invoice before the actual subscription start or renewal date. Advance invoicing comes in handy to schedule your billing to budget for on-time shipping or accommodate a sudden hike in demand for a non-renewing subscription.

Send Out Reminders

Finally, remind your customers a particular number of days before the invoice is due.

4. Insufficient Operational Rigour

Like the importance of having the right weapons at war, the right metrics for business make all the difference. In SaaS, there exists an armory of shiny metrics. Some of the most critical SaaS metrics include MRR, Churn, Recurring Profit Margins (ARR, less the number of canceled subscriptions and the non-growth spend), and Growth Efficiency (the amount it costs to get $1 annual contract value).

Beyond looking at these metrics individually, a combination of various metrics can give you way more actionable insights to be able to answer critical questions like:

  •       Are you making more money than you’re losing?
  •       Which feature is attracting the most revenue?
  •       Is your free plan attracting the right customers?
  •       How long should your trial period be?
  •       How are your new pricing plan changes impacting your business?
  •       Is your customer churn a sales problem or a value problem?

Answering these questions is not easy. You need reports and dashboards that give you actionable insights on what worked and what didn’t.

And for this, you need an analytics tool that gives you a 360° view of your business growth on one dashboard and lets you go deeper into analyzing your metrics to identify your best revenue maximization opportunities.

Diagnose your recurring revenue issues in an instant. Nail down on what’s affecting your revenue now by identifying possible conditions, problems, and resolutions in your subscription flow with RevenueMD by answering a few basic questions.

5. Increasing Difficulty in Recognizing Revenue

Revenue recognition might be simple when you’re starting as a fledgling company. But as you grow, reconciliation and recognition will become complex in terms of time and resources spent.

Here are two key points to note:

  •       Full-scale automation is a necessity for large-scale reconciliation.
  •       Similarly, to efficiently recognize revenue – even without including other complex factors like proration – you need the help of built-in reports.

Hence, it is critical for your SaaS subscription management platform to scale with your business – automate reconciliation and have built-in reports to recognize revenue.

For instance, Chargebee-Xero integration simplifies your accounting process by automatically syncing invoices and related details to the Xero account. It reduces the manual effort spent exporting invoices from Chargebee, importing them into Xero, and increasing data accuracy.

On this note, let’s discuss the next common recurring billing challenge.

6. Lack of Third-Party Integrations

Traditionally, billing might have been a siloed process, only restricted to the finance vertical. But in reality, billing spans different business functions like sales, reporting and analytics, marketing, and customer support. Each of these verticals communicates with each other and needs subscription information to perform their roles. For instance, the sales team needs to pull up subscriber information instantly to issue discounts or coupons. Or, the customer support team needs the same information to address a specific customer’s request. In such a case, you need complete billing system software as a single source of truth to streamline your entire subscription billing process across all business functions. And a proven and efficient way of doing that is through integrations.

To give you an example, Chargebee Integrations covers various business functions like finance, e-commerce, reporting and analytics, marketing, collaboration, sales, and customer support, with close to 40 integrations.

7. Inability to Support Global Expansion

Supporting multiple payment methods, currencies, and various tax rules is the holy grail of any recurring billing system worth its salt. Why?

To penetrate global markets successfully, you need to overcome the challenges that come with international transactions.

When you are foraying into new markets overseas, you also need to meet local tax requirements and compliance with accounting standards. Apart from having your billing architecture take care of localization (multi-currency pricing), support global payment methods and gateways, automating tax computations are vital.

If your payment system isn’t flexible, it will deter you from what’s most important to you – which is growing your business. You need a tech stack that can help you experiment rapidly with pricing.

Best Practices for SaaS Billing

In going through how to overcome the common recurring billing challenges, we have gone through many efficient courses of action. However, to recap, here’s a snapshot of the best practices for SaaS billing:

Increase Reliability with Billing Automation 

Reduce your response time – remove developer dependencies, handle complex recurring billing scenarios, eliminate manual errors, and accommodate unique buying cycles – with the help of automation for streamlined billing.

Enhance Visibility with Analytics

Take decisive actions with comprehensive subscription analytics – find blind spots (revenue leakages) like churn and hidden gold mines (revenue opportunities) like upsell and cross-sell avenues.

Proactively Reduce Churn 

Reduce churn with a robust subscription management platform that can significantly improve your processes for better customer experience, leading to better retention.

Drive Efficiency with Revenue Operations 

Achieve strategic alignment throughout your revenue-driving functions – marketing, sales, operations, finance, and customer success – across the entire customer lifecycle to drive uninhibited growth.

For detailed information on enabling hyper-growth with revenue operations, visit our Guide to Revenue Operations for a High-Growth SaaS.

In Conclusion

We can see that recurring billing isn’t a straightforward process. Billing errors can and do happen. However, these billing mistakes can be avoidable, and they can be resolved.

Go beyond billing with a provider who has your growth in mind. A robust billing system can help you improve customer retention by providing a stellar billing experience and increasing ARPU through upsell add-ons or promotions using coupons. It can also help you stay on top of your sales cycle by having metrics at your fingertips, and a lot more.

Reference:https://www.chargebee.com/blog/recurring-billing-issues/

Perform Practice Solutions can help you to optimize your day-to-day operations. Make the commitment to improve your clinic’s performance for real this quarter – and not look back. Visit our Facebook page or give us a call at (833) 764-0178 to see how we can help elevate your physical therapy practice! Join our Perform Practice Solutions Facebook Community.


Facebook

Facebook Pagelike Widget
Let's Chat

Take the first step to getting started with our many services by filling out the form below.
Let's talk about physical therapy billing, eligibility, physical therapy marketing, practice sales, and credentialing - or other questions you might have about PT ownership.

Physical Therapy Marketing Solutions

Perform Practice Solutions helps physical therapy clinic owners nationwide adjust to the changing and challenging reality of PT ownership. With its innovative coaching platform, transparent physical therapy, and physical therapy marketing services, Perform Practice Solutions provides frustrated and hard-working owners an alternative way forward. It's not easy, but it is possible.