Righting a Wrong

I’ve been having a running battle with my local Vons Supermarket. They cheat. So what does this have to do with Strategic Credit Management Solutions? I’ve said it before; it takes a peculiar, perhaps a unique, behavior type to be an effective credit professional. Additionally, a seasoned credit professional may take on certain behaviors that manifest themselves in areas other than the job itself.

Credit managers are advocates for the integrity of the company’s billing process. It is easier to collect a bill that is accurate than one that is not. There is no excuse for not paying a valid bill. But the customer is not going to pay an incorrect invoice; therefore, it falls on the credit person to fix it. When product is sold damaged, incomplete, or at a price other than the quoted one, credit people become advocates on the customer’s behalf. As a result, credit managers are their employer’s conscience.

Nothing is more offensive to the credit professional than to be taken advantage of. Customers who cheat and lie are evil, plain and simple. It is one thing to make a deduction when the price is wrong, but it is quite another to take a deduction for no other reason than to cheat the vendor and to assume immunity.

When no dispute exists and a customer known to have the resources still refuses to pay, he is the villain. He had after all, made a promise to pay when he signed the credit application. Credit managers have always been on the side of righteousness and justice. We are the enforcers of the law and we claim the moral high road. We wear the white hats.

So, when Vons cheated me, I was moved by moral indignation. Not simply because I was a victim, but because the store was cheating our entire local tomato buying community. I picked out three tomatoes from a bin at the entrance to the produce area that advertised them at 98 cents a pound. Altogether they weighed almost a pound and a half, yet I was charged $4.31. Because one of the tomatoes had a little green stem, the cashier assumed all three were “hothouse tomatoes” which sell for $2.99 a pound. I complained to the supervisor who blamed the mix up on customers who take tomatoes from one bin and leave them in another. Since I had similar issues several times in the recent past, I claimed that the "mistake" was intentional. Again, years of credit management, years of looking at and questioning credit applications and bogus claims for credits have made me maybe a little cynical. I was told that I was the only customer to complain. Not surprisingly, I thought. Most just shrug it off, but credit people get pissed off.

Credit people call and confront delinquent customers and we challenge those who for whatever reason make illicit deductions or fail to make good on a commitment. It becomes second nature. I retuned the next morning, just to see if perhaps the tomatoes in the 98 cent bin were better indentified. I bought two tomatoes, both had been placed upside down in the bin and they had little green stems and were sold to me by yet another cashier as “hothouse” tomatoes. I was charged $2.66 for two tomatoes that weighed less than a pound.

If the accounts payable clerk cannot commit to a payment date or a payment amount, the collector moves up the chain of command. I went to the manager. He professed it was an innocent mistake. I told him this problem was too reoccurring and I’d brought it to the attention of others previously. He acted no differently than an applicant with a bad credit history who attempts to place the blame elsewhere. He wanted to give me a gift certificate. That was like a customer offering me a bribe to let his payments slide another month. I told him I was filing a claim with the district attorney. This may not be on the magnitude of Enron or the Madoff ponzi scheme, but it was illegal nevertheless. I told him I wanted to be able to come into the store and not worry about being cheated. I told him, I was speaking on behalf of all of the customers who expect honest treatment when they come into this store.

Last I looked, the bin with the 98 cent tomatoes was well tagged, and the green stems were gone.

Strategic Credit Management Solutions is dedicated to making it right. Contact us at patrickpowers@sbcglobal.net and see our website http://powerscredit.com/. Your comments are welcome.

No Way, H.O.A.

My homeowners association sent a letter informing us that because there are so many fellow homeowners failing to pay their dues, the association is going to charge the rest of us a special assessment. Few companies can pass the cost of delinquency or default on to their customers like this. Imagine the reaction when you ask a customer to add a little something to his payment so you can pay down someone else’s delinquent account.

Some HOA dues are off as much as 33%. That’s serious. It means they’ll have to forego mowing the common grounds or paying the management company for sending out all of those reminders that if you fail to pay, a lien will be affixed to your property. It’s a lien that is subordinate to the bank that’s about to foreclose anyway. Apparently, for a lot of homeowners, association dues have become a low priority. Imagine that. Times are tough and when you have to decide how to divvy up your unemployment check, internet service will have priority to homeowners’ association dues any day.

I just don’t think sticking it to the homeowners who are paying dues is the answer; particularly if the collection effort has been limited to a sternly written letter. If the squeaky wheel gets the grease, a letter that is probably thrown away along with all of the other junk mail is not the solution. It is at best one of several collection steps.

Perhaps the HOA should consider hiring a collector or two to make collection calls. The risk is of course that they’d be adding another level of expense without realizing a return. But on the other hand, a good persuasive collector may be able to bring in a level of revenue that would, one, pay for the collector, and secondly, help buttress the cash situation. Nothing works like talking directly to a debtor. Talking leads to negotiations and this in turn, leads to some sort of mutually acceptable payment schedule.

These are extraordinary times which call for creative solutions. Property management companies have always had an anathema about communicating with their members in ways other than by mail. In better times, their strategy worked for them. Now, it is not enough to send out a reminder letter and go directly to the lien. Businesses in general will need to adjust how they do a lot of things and how they collect their debts is just one area.

Strategic Credit Management Solutions is dedicated to thinking outside the box. Contact us before you call in a collection agency. Perhaps we can help get you on track. See our website http://powerscredit.com/. Your comments are welcome.

You Want Normal With That?

Somebody owes you money. You see them all of the time. You consider them friends. You go out and do things, but the debt, the loan, never comes up in the conversation. You had expected the money to be paid back in a short period of time, but now it is long passed. You wonder if maybe they’ve forgotten. You know one of these days you are going to have to ask for it. You really don’t want to ask. In fact, you’d almost rather let it go, forget about it than have to ask. Asking for money is the last thing you want to do.

Who likes asking for money? Do normal people like to call up perfect strangers and ask them to pay a debt that doesn’t even belong to them? If a regular person cannot muster the courage to ask for repayment of his own loan, what kind of person is willing to do it for someone else? Is it a normal, that is sane, individual who is willing to ask strangers for money and to be compensated so little? Sales people are paid a lot of money to make sales, yet collectors are paid a proportional pittance to collect it. You’d have to be nuts to want to be a collector.

And talk about respect. No one respects collectors. Credit managers and collectors are the Rodney Dangerfield of business. No child dreams of going into credit management. Kids want to be doctors, rock stars or lawyers. It’s not a career path you consider when choosing colleges. People who get into the field do so rather than law enforcement or the ministry, two occupations that put a high value on normalcy.

No one likes to be called and asked to pay a bill. No one likes to be reminded that they are past due. In fact, most people resent having to be called and they resent the collector. Debtors do not like collectors. Just asking for money is considered rude. If we are striving to have everyone like us, we can just about write off entire segments of the population. You expect not to be liked or respected if you are a credit professional. Do normal people seek so much disrespect and abhorrence?

Should a normal well adjusted human being enjoy collecting money? People calling for money are intentionally causing someone, a perfect stranger, to be stressed. Collectors put people on the spot. They make them feel uncomfortable. They are irritating. Is that normal behavior? Would you want to hang around with someone who actually thinks it is fun to antagonize people and manipulate them into doing something they do not really want to do?

A company’s collection department is made up, therefore, of individuals who either hate what they do or who are completely nuts. Then, to make matters worse, if they do not collect enough, it is their fault. Not the debtor’s for failing to pay, oh no, it is the fault of those incompetent social misfits and the solution is to fire the bunch and replace them with a new group of social misfits.

Normal or not, good collectors enjoy collecting. For them, it is a game. Each time they get a check from a debtor that required them to call more than once, they feel a sense of profound satisfaction. Unlike a lot of jobs, collectors see their results. They are relatively easy to measure and if they are competitive, they respond well to positive feed back. Each difficult situation is seen as a new challenge. Days are never dull. There is always a sense of the hunt and the thrill of victory. But, yes, have to be a little crazy.

Too often, companies draft the wrong personality type to perform the collection task. Timid accounts receivable clerks, barely able to look at people in the eye are told to go out there and demand payment from the biggest customers. How hard can it be? Then, when a customer gets upset, or complains of the rudeness of the collector, or flies off the handle, the easily intimidated are too afraid to make any more calls. These are the collectors who send a lot of letters or insist the sales reps do the collection work. These are credit people who refuse to take on a new customer if there is a hint of slow pay suggesting it’ll require a phone call to collect.

This is where Strategic Credit Management Solutions can help. We have over thirty years of credit management experience. We can relate to the, shall we say, off kilter. We can help you determine who are the good collectors and who are not. We can sift the nuts from the normal and help you put together an effective and efficient collection team. See our website http://powerscredit.com/.

Your comments are welcome.

Strategic Credit Management Solutions to the rescue

Get the feeling we are all on the Titanic?

Everywhere businesses are losing sales and scaling back, cutting jobs and desperately trying to survive. This week’s Newsweek magazine excerpts Ben Sherwood’s book “The Survivors Club.” In it, Sherwood cites Dr. John Leach, a leading expert on survival psychology. He’s come up with a theory that categorizes “ways people respond to life-threatening situations.” It is a variation of my favorite 80 – 20 rule with a twist. Dr. Leach theorizes that 80 percent of us when faced with a crisis are “stunned and bewildered.” We do nothing different. We don’t change how we do things; we act as if nothing is the matter. Dr. Leach calls it the “incredulity response.”

I cannot speak for other areas of a business, but I’m willing to bet that in these desperate times, if Dr. Leach’s theory is true, most credit departments fall into this category. By and large, credit management is learned on the job. We’ve had better than a decade of fairly good economic trends, and as such credit departments have not had to face the challenges that face them today. Most credit managers were drafted into the position without any formal schooling and for the last twenty years at least the position has been downgraded to a nearly entry level position. Accounting clerks have been made credit managers, because they know what a balance due is.

In today’s reality, businesses cannot afford to conduct themselves as they have for the last ten years. We have a new reality. Sales people must be more creative than ever to find new sales. Credit people must adapt to this new reality and be just a creative in finding ways to extend credit and protect and collect the receivables. However, according to Dr. Leach, only 10 percent of a group will grab a leadership role and guide the rest to safety. Another 10 percent will panic and act in ways that are dangerous to the group.

That’s where Strategic Credit Management Solutions can help. With over thirty years experience, we’ve seen good times and bad times. Our specialty is fixing credit departments, making them more productive, introducing the tools and processes that will get the entire department on track.

Think of us as a life raft and call us today.

See our website at http://powerscredit.com/.

Your comments are welcome.