Tuesday, April 24, 2012

Dues to Pay

Do you struggle with how to ensure that all your neighbors are paying their dues? Well, the The UK recently released some interesting results of studies on how to increase payment compliance (taxes, fines, etc.).

In the past, it was generally assumed that people weighed the personal cost and benefit of failing to pay. However, these recent studies showed that the vast majority of individuals had a strong sense of moral obligation, justice and fairness, which is shared by their neighbors, with a strong expectation against avoiding paying debts.  In other words, in many instances people care more about fairness than they do about maximizing personal gain.
Here are some gems uncovered in the studies that homeowner associations should consider when dealing with delinquency or rules violations:

· Use simple and personalized language in your letters.A notice with simplified language had a 35% response rate compared to a traditional letter at 21% or a generic letter at 4%.

· Using images along with simplified direct wording tripled the response.

· Highlight key information in bold text.  Items in bright red or blue are more credible than other color choices.

· The most important information should be placed to the right side of the page, above or in with the headline, and highlighted (bold or color).

· A handwritten Post-It included with a document to be completed had a 70% return rate, double those without the Post-it.  A Post-It with the senders initials and “Thank You” increased responses even further.  

· Having the responder’s signature line at the beginning rather than the end of a form increased honest reporting by 10%.

· Payment into an honesty jar (paying for tea or coffee left unattended) doubled with the presence of a picture of eyes posted above the jar.

· Drawing attention to the high rate of compliance by neighbors (9 out of 10 homeowners have already paid their assessment) increases a positive response by 15%.

· Sporadically having prize drawings (perhaps with donations from vendors), with more draw chances for earlier payers, increases compliance.

· Letter should highlight the impact of failed compliance (both on the neighbors and on the offender).

While it may not be possible to incorporate all of the above in to your messaging, the takeaway is that raising awareness and removing anonymity are key to compliance.

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