Cars have become our most important mode of transportation over the past century. We are unable – and unwilling – to imagine the streets without them. And we likely won’t have to if the automotive sector has anything to do with it. The sector is making every effort to continuously innovate and pioneer cars in order to keep up with environmental, societal and economic demands.
However, it is important to not lose sight of the most important stakeholder – the customer. Customers are crucial for this rapidly evolving sector. Their ever-changing demands make it more difficult to differentiate as an organisation and secure customer loyalty. Why should a customer choose your organisation? How do you hang on to him? And how do you deal with complaints and non-paying customers? The answer does not lie in having a distinctive product, but in having distinctive service provisions. This is especially vital at the point when a customer is potentially not going to pay an invoice.
It’s no secret that large sums are often involved within the automotive sector. There’s the cost of purchasing a new car, but also of all the parts and technologies that need to be supplied. An effectively streamlined process for managing all outgoing invoices and incoming payments is therefore important. Particularly if the customer has complaints or financial problems. If, for example, the wrong part is delivered, a repair has not been carried correctly or arrears develop in the monthly payments, an invoice will not be paid. This is annoying for both the organisation and the customer. You as an organisation have a great impact on the customer paying and their satisfaction.
Segmentation ensures optimum cash flow
A wealth of available information is making customers increasingly autonomous. Nowadays they have a better overview of the availability of goods and services and can choose from a wide range of suppliers. Today’s customer also expects that their needs are met. This makes it increasingly difficult for suppliers to keep up, as what works for one customer, might not work for another. This also applies to paying invoices. Responding to this need and catering to the customer is a good way of keeping the customer satisfied and getting invoices paid. In order to be able to do this, it’s important to know the customer well: How would the customer prefer to pay? Is it by means of automatic bank transfer or a direct debit, or would he like to pay straightaway when sent a digital link?
Importance of insight
It is also important to have insight into the customer’s payment behaviour. By identifying what the customer’s reputation is with organisations, for example, alongside his wishes, you can obtain a complete picture and can assign customers to segments. This creates a personalised order-to-cash process for every customer, enabling you to monitor his payment behaviour and keep the customer satisfied. This will urge them to pay their invoices faster, and allows you to intervene if payments are in danger of going wrong. This has an immediate impact on working capital and ultimately cash flow.
Organisations are digitising, both in terms of their products and services and their processes. This is necessary for the credit management process, since a well-digitised and streamlined process considerably improves efficiency within organisations. In addition to the fact that segmentation and personalisation gives the credit manager more time to focus on exceptional cases, it also creates insight for the CFO on which he can base financial decisions. Thus allowing the automotive sector to continue to rapidly evolve.