A national supplier was seeking to further penetrate a new business segment while facing both brick-and-mortar and online competitors. The company’s manual credit process was expensive, time-consuming and prone to errors. It also lacked the insight into underwriting and fraud sophistication to handle its new customer segment.
Within months of partnering with BlueTarp, the company began seeing positive results. Here's a look at what changed, and the benefits they gained:
Improved B2B customer experience
The supplier had issued invoices for every transaction creating rolling due dates, didn’t provide payment reminders and limited payment options to postal mail. This resulted in confusion and frustration for customers regarding the status of their due dates and payment applications. If an invoice was lost, the customer never received a missed payment reminder. At the same time, customers were becoming more vocal in wanting the convenience of online bill pay and account management.
With BlueTarp’s help, the supplier moved to monthly statements with a single due date for easier bill management. The supplier now sends automated email notifications for statement due date reminders and past due reminders. These reminders include a link to their customers’ online account where they can make a payment, check the status of their account balance and available credit, view and download invoices and statements, and set preferences like electronic billing. This online account is integrated within the suppliers’ existing customer interface, offering a seamless experience. Since launching online account management, the supplier is gaining 18% new online bill payers each month.
Increased quality of sales
BlueTarp also plays a role in accelerating the selling process, before a purchase has even been made. Previously, the supplier’s sales team prioritized leads to the best of their ability, but had to rely on slow, manual credit screenings. As part of its partnership with BlueTarp, the supplier now shares lead lists which BlueTarp analyzes and scores using its proprietary prescreening models. BlueTarp’s models provide intelligence on both credit quality and predictors of spend. Sales reps quickly prioritize and target potentially higher-spending leads. BlueTarp integrates this information directly into the sales team’s CRM system for a seamless experience. After only three months, the supplier found that the newly scored and targeted leads spent 74% more than other customers.
The sales process is also accelerated through streamlined credit applications. When customers apply for credit online, they receive an immediate decision and if approved, a customized credit line is determined by BlueTarp. This automated process allows 90% of the leads sourced by the suppliers’ outside sales reps’ to be instantly approved.
Improved margins and reduced risk
Like many suppliers, this company faced a common dilemma in accepting credit cards as payment for in-house credit balances. Though this practice is widespread, it’s expensive. Suppliers are effectively paying twice for each transaction: they’re paying for the cost of an in-house credit program plus the credit card processing fee of about 2-4%, even higher for online transactions.
This supplier wanted to improve its margins by migrating its credit-card-on-account payers to other forms of payment. They previously lacked the ability to offer online bill pay – something their business customers had expressed a desire for. By adding the ability to pay online, implementing a policy change, and carefully communicating to customers, BlueTarp was able to convert 80% of these credit card-on-account payers to other forms of payment. The supplier has quickly realized a savings of $1M a year.
BlueTarp has also automated the cash applications process, providing an over 90% match rate. This frees up credit lines and allows customers to continue spending without the distraction of slow or incorrectly applied payments. As part of the BlueTarp program, the supplier is also protected from credit risk. BlueTarp takes on all risk of non-payment, allowing the supplier to focus its resources on more strategic growth initiatives.
The supplier relies on BlueTarp to mitigate risk throughout the purchase-to-payment process. Previously, when new customers applied for credit, they were automatically given a set credit line without any consideration of their size, spend potential or risk profile. This exposed the company to risky customers who should have been screened out. Now, approved customers are given a flexible credit line that best suits their needs, while protecting the supplier from over-sized lines.
As companies do more business online, fraud prevention and detection become even more critical. It was determined that the inside sales team was exposed to more fraud, due to the lack of in-person interaction between sales and prospects. BlueTarp quickly addressed this exposure by adjusting its credit model to eliminate those with a high propensity for fraud. In a three - month period, the supplier achieved a 50% reduction in fraud - 23% immediately declined and the remaining 27% was flagged before product reached the customer.
BlueTarp also reduced risk exposure through its collections approach. With BlueTarp’s consistent collection efforts including automated due date reminders, the supplier was able to reduce DSO by 33% and reduce 60+ delinquencies by 46%.
An investment in the future
This supplier’s success demonstrates how the tangible benefits of a modern B2B customer experience appear relatively quickly. But the payoff over the longer term is even greater. Suppliers should act now, embracing technological advances to bolster their established marketplace advantages and improve their B2B customer experience. Failure to do so may not result in an immediate drop-off in sales, but over time customers will migrate to companies that offer a more frictionless experience.