Tag Archives: customer relations

What the holiday season means for credit

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The holiday season is quickly approaching and that means it will soon be the busiest season of the year for many of your clients. Most businesses are preparing for the influx of sales from Black Friday, Cyber Monday and the end of Q4 leading up to major gift-giving holidays like Christmas and Hanukah. As Holiday shopping ramps up, businesses have been increasing their inventory dramatically.

What does this mean for you?

While this may not apply to the service-side business customers, your retail customers are most likely investing a significant amount of money right now in the months leading up to the holiday season. By growing their product stock for the holiday rush, they will be looking to negotiate more flexible payment terms or delay their payment to account for the pre-season costs.

What should you do?

While these businesses may be strapped for cash leading up to November and December, it won’t last long. Once shoppers head out to make their holiday purchases, your customers will have plenty of cash on hand to pay off outstanding debt. The one problem is you are not the only person trying to get paid. This means you need to assert yourself as someone they will want to prioritize. The goal is to get on your delinquent customer’s payment schedule. Make your business a priority so that you receive payment between November 15 and December 15. Chasing the debt after December 15 will be unsuccessful because many employees will be away for the holidays and it will be significantly easier to push payment off until the beginning of the year.

If you are in the middle of a debt collection campaign, emphasize the importance of paying the debt when there is an influx of cash flow. Check with your sales team to see when they last visited the delinquent customer . They most likely will have an insider insight to their stock levels and current order quantity. Remember to always do your research first before getting on a call with a customer.

Five Tips for Making Collection Calls that Get You Paid

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Debt collection calling is not the type of task most employees get excited about. Typically, in-house campaigns take employees out of their comfort zone. For most small businesses it is a task given to employees in addition to their normal job responsibilities. Don’t waste your time and money with an inefficient debt collection calling campaign. Instead, be successful from the start!

Here are the top five things to do when making collection calls:

Always prepare for excuses.

Unfortunately, most debtors will not be quick to offer payment options. Don’t allow yourself to get flustered by excuses. Instead, be prepared. Here are the most common excuses you will hear:

The check is in the mail.
How to respond: Ask for the date of the check, amount, address where it was sent and check number.

I never received the invoice.
How to respond: Always give the customer the benefit of the doubt. This is a great time to verify their preferred method for their invoice: email or mail. Always follow-up this discussion with asking how the customer will pay the past-due balance.

Our business is going through financial problems.
How to respond: Work to set up a payment schedule with the customer.

We completed the wire transfer yesterday.
How to respond: Ask for the routing and banking information. The customer could be telling the truth, but you need all of the information you can collect to verify the validity and make the most of the call. 

 

Do your research before the call.

Learn as much about the customer as possible before picking up the phone. Common information to find out includes:

    1. Has the customer had payment problems in the past or is this uncharacteristic?
    2. Did the sales person have concerns about the account?
    3. Terms of sale
    4. Payment due date
    5. Exact amount due

 

Always be professional.

Never threaten a customer for payment. The goal of the collection call is not merely to successful collect payment; you should try to also maintain the business relationship if possible. When on the collection call, follow these tips:

    1. Never multi-task. Be completely focused on the call.
    2. Speak slowly and take more pauses when you speak.
    3. Never eat food, drink a drink or chew gum while on the phone.
    4. Go into the call with a positive attitude. Your tone and inflection of voice will mirror your attitude.


Ask open-ended questions.

You will never get paid if you only ask questions with Yes and No answers. Let’s look at a scenario:

Option A: Do you plan on paying us soon?

Option B: What date can I expect payment from you?

Option B is obviously the better choice. You are committing the customer to a specific date. Make it a goal to commit the customer to something before getting off the call: full payment, partial payment, or even a date that they can let you know their payment plan (Remember, sometimes your main point of contact does not control the money within the business.)

 

Be deadline-driven, but still flexible.

Debt collection requires you to walk a fine line. You need to be assertive, but not too pushy. Always emphasize the urgency of the matter and try to have the customer commit to dates for payment.

 

Should you treat every customer the same?

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apples-orange

The short answer: No!

Ever heard of the common phrase, you can’t compare apples to oranges? By treating every customer the same, you are placing them in a basket and assuming they all want the same thing at the same time.

While we believe that every customer should be treated with fairness, treating every customer the same is robotic; and it will lead to unengaged customers who do not feel like they receive a personal experience from your brand. Remember, customers don’t buy from companies; they buy from people.

As a company, you should focus on each customer’s unique needs. Within your CRM, always document unique characteristics of customer that could better your relationship.

  • Does the customer prefer e-invoicing v. paper invoicing?
  • Do they respond best with phone calls over email communication?
  • Did they mention they will be on vacation and you should invoice someone else?
  •  Do they regularly purchase at the beginning of the month? Consider contacting them if you don’t receive their order.

Customers will appreciate the personal touch on their account. While all customers ultimately affect the bottom line and are a source of cash flow, remember they want to be treated like people, not dollar signs.

When an Account Goes to Collection

This is a common question especially when it comes to collections. The majority of your collections efforts should follow your late payment policy. If not, why have a policy in place at all?

Some companies give special treatment to their best customers who falter once with a past due bill. Keeping a quality customer may mean that you need to bend the rules. This is a business decision that has to be made by the executive team. Always keep your eye on the long-term, big picture relationship. Forgiving a late payment once could result in a positive long-term relationship!

Before any action is taken, a series of questions need to be asked and answered on the part of the service provider:

1. How long has the company serviced this customer?

2. Has this customer ever missed a payment before?

3. How much money is involved?

4. How much might the relationship be worth in future sales?

5. How likely is the customer to continue making referrals?

From there, weigh your options on the best way to handle the late payment in order to sustain a relationship.