How to Convince the CEO

Deepak Kumar Singh

Senior Product Manager at Yelp



We are constantly looking for ways to enhance our customer experience when it comes to paying their bills. While doing so, we found that our customers were not paying the invoices instead of finding ways to dodge the stipulated time. It was a furniture rental startup, and primarily we were getting our money from customer's subscriptions. For instance, an average time was given to each customer to pay a particular invoice, whereas it would go by months, and no payments were coming in.

Perhaps, that was the biggest drawback of a subscription-based business as the money that was forecasted to come in was used to cover our base costs. It heavily impacted our cash flows. So, my initial take on the situation was to move the time frame from 60 days to 10 - 15 days, which would be a big win. Was that going to be the right thing to do? Today, anyone can hardly take customer loyalty for granted due to severe competition. To add to that, it was a significant decision regarding quality customer service experience for which we were somewhat stranded on a deserted island.

Actions taken

To begin with, I brainstormed a couple of potential solutions. One of the simple, no-brainer solutions was to introduce an industry standard of late fees. It was just a simple formula; even when you do not pay your credit card bills on time, you might be imposed a late fee. In my defense, it was a great idea to boost our cash flows, and at the same time, it could work as an incentive to get our customers to pay us sooner.

However, it did not seem like a good idea. Our CEO was totally against it as his theory was that customers should not face any inconvenience. Therefore, my next task was to convince him that a late fee was a standard procedure for our case and would not take away our customers. I came up with a plan: I told him that I would take the customers with a longer debt (customers who had not paid in the last 3 months) and try to implement a pilot late fee only for them.

The way I structured the pilot was to implement a warning for the set of users. Instead of sending them an email that mentioned, "please pay your fee," it was something like, "please pay your fee; otherwise, you are entitled to a late fee after X number of days." We even allowed a one-time offense based on the customer's history. For instance, we added the late fee, but if they paid up, that would waive it off for this time. If next time they did it again, then we would definitely be compensated.

Additionally, we developed a standard solution, a simple MVP of late fee that would add a flat price irrespective of their bill. To our surprise, after the pilot implementation, many of our customers started paying the moment they saw the message. A big bulk of customers paid when they saw the deadline approaching, and about 40 percent got the late fee. However, those customers contacted our customer support to get it waived.

The good thing was that we had a backup plan for that, too; we knew that our customer support team would get a lot of inbound calls upon implementing the late fee. And, that was the biggest reason why we did that in phases. Even in the small pilot group of customers, we did apply it to a set of customers, which helped us achieve about 60 - 70 percent of customers paying on time.

Furthermore, we looked at the social media responses made by our customers to check if they hated paying the late fees. Luckily, we did not find any such reviews, nor any kinds of complaints. Throughout the process, we discovered some minor problems as to why our customers were not paying up, and it showed that there were payment glitches on our end.

Long story short, the CEO was satisfied, and he finally gave us the green signal to proceed with our late fee implementation to our regular customers. He was entirely against it on a moral principle value, but he finally agreed to it based on the data. It was an outstanding achievement in terms of convincing the CEO and continuing with our plans.

Lessons learned

  • Hard-held feelings by your senior management should not deter you. Always believe in what the statistics have to say because eventually, everyone agrees to what the data poses, not your words.
  • Don't let your fears sink in. Try and experiment with different ways to convince the cross-functional teams why your point might be the right way to proceed.
  • Be objective in what you talk about. I knew that I had about 5 - 10 minutes in my hand to convince the CEO about what I was talking about. I went with a very objective 1-slide presentation to him and delivered the message in that single slide. Deliver concise information in a short amount of time, and you will make big wins.

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Deepak Kumar Singh

Senior Product Manager at Yelp

Leadership DevelopmentCommunicationOrganizational StrategyDecision MakingPerformance MetricsLeadership TrainingFeedback TechniquesCareer GrowthSkill DevelopmentTeam & Project Management

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