Something that I have advocated for a long time has become law. Now a simple procedure, a courtesy letter really, will become an official document with official legal wording that is required to be recorded along with additional recording fees and mailing fees and the timing of the letter will be a core argument challenging the validity of future claims for years to come.
Whenever I have the opportunity to speak in seminars about the Mechanic’s lien law of California I would urge the students to send a letter to the owner and general contractor a letter warning them that a Mechanic’s lien is imminent unless payment is received post haste. Frequently, this warning alone results in payment making the lien filing unnecessary.
The letter is very simple. I’d identify the myself and that my company had supplied material at a specific location and that it was charged the account of the specified customer and that I’d sent a Preliminary Notice on a specific date and that if I did not receive payment within ten days I was going to file a Mechanic’s Lien on said property. I’d send the letter to the owner certified return receipt requested and I’d send a copy to the general contractor. Then I’d sit back and wait for the proverbial caca to hit the fan. Very often it did, because while I had not received payment from my customer / contractor, the general or the property owner already had sent payment to my customer / contractor. I was not usually privy to the yelling and screaming and admonitions and threats that went on between my customer who was supposed to pay for materials but didn’t and the owner or general contractor who assumed he would. However, very often, assuming there was money remaining to be paid, my customer was quick to make payment, albeit sheepishly.
This point was driven home after I had filed a $13,000 lien. Sometime afterwards a representative of the general contractor called me. He was furious, not because I had filed the lien; I had a deadline after all, but that I failed to notify him that I was going to. He had to find out about the lien from his client the property owner and he had no idea I had not received payment from my customer, his subcontractor. To make matters worse, had I notified him earlier, there was still money in the contract. At this late date the money had all been spent. What upset this representative was his belief that as a material supplier, entitled to lien, I could do so without consideration of the consequences and with a little more effort, I could have received payment much earlier. Now I was facing the likelihood of an expensive lawsuit.
One of the problems with this early warning notification is too often the lien claimant waits until the last minute to file the lien in the first place and does not have time to warn anyone. Now that it is law, a courtesy phone call will not be enough. When the law takes effect in January 2011, the lien claimant will be required to send to the owner of the property being improved a Notice of Mechanic’s Lien along with a copy of the intended lien sometime before the lien is filed. No more last minute e-mails or phone calls. Additionally, the notice must contain the following language:
NOTICE OF MECHANIC'S LIEN
ATTENTION!
Upon the recording of the enclosed MECHANIC'S LIEN with the county recorder's office of the county where the property is located, your property is subject to the filing of a legal action seeking a court-ordered foreclosure sale of the real property on which the lien has been recorded. That legal action must be filed with the court no later than 90 days after the date the mechanic's lien is recorded.
The party identified in the mechanic's lien may have provided labor or materials for improvements to your property and may not have been paid for these items. You are receiving this notice because it is a required step in filing a mechanic's lien foreclosure action against your property. The foreclosure action will seek a sale of your property in order to pay for unpaid labor, materials, or improvements provided to your property. This may affect your ability to borrow against, refinance, or sell the property until the mechanic's lien is released.
BECAUSE THE LIEN AFFECTS YOUR PROPERTY, YOU MAY WISH TO SPEAK WITH YOUR CONTRACTOR IMMEDIATELY, OR CONTACT AN ATTORNEY, OR FOR MORE INFORMATION ON MECHANIC'S LIENS GO TO THE CONTRACTORS' STATE LICENSE BOARD WEB SITE AT www.cslb.ca.gov.
Should the lien be filed, a copy of this notice and its proof of service affidavit must be filed along with it. Each additional page carries its own recording fees. If this procedure is not followed, your lien will be unenforceable. That’s right, in little more than a year from now, if you fail to send this notice, your lien rights go down the drain.
One of the real hardships with a law like this is that it affects companies who are already ill equipped or ignorant of the lien laws as they presently stand. I see companies who have their attorneys file liens for them and therefore, are hesitant to file liens in the first place. I see companies file Preliminary Notices routinely but fail to enforce them. I see companies prepare Preliminary Notices but fail to mail them properly. While there are several providers of Mechanic Lien Law seminars, it is very difficult to attend and for many, vacating an already lean credit department to participate is not always an option. This is where Strategic Credit Management Solutions can help. We know lien law. We’ve had over thirty years experience with it. Now is a good time to implement a procedure that will follow the law in 2011. Not only will it collect more money, it will secure your lien rights and it’ll be part of your routine. See our website at http://powerscredit.com/. You can e-mail us at patrickpowers@sbcglobal.net. Your comments are welcome.
Tuesday, August 25, 2009
Tuesday, August 18, 2009
When Health Care Doesn't Care
I hate sending claims to a collection agency. When I do assign a claim, I’ve worked the debt to death and I’m confident, no one will collect it, including some bad ass collector. Some balances however are almost too small to mess with for very long. Bad checks received for a C.O.D. sale for example, get a letter so I can claim treble damages, then maybe a phone call or two if the check amount is over $500. Then it’s off to the agency. Never will I send an amount that is disputed to an agency without first attempting to resolve the dispute. If we’re right and we’ve proven the righteousness of our cause but the customer still refuses to budge; it is no longer really a dispute. I am indignant, then, that an organization like Kaiser Permanente would send a crummy $200 disputed claim to a collection agency and ding my Mother’s credit rating.
What is so galling is that Kaiser sent this claim to a collection agency, not because whoever is responsible for collecting outstanding bills had already exhausted all in house attempts to collect it. It was sent to a collection agency because, there is a designated schedule. After a certain amount of time, unpaid balances are sent to a collection agency. That clears it off of the desk of some hapless billing clerk whose expertise for handling unpaid bills is nil. Because it does affect credit ratings, collection agency assignments should be considered beyond expediency. My Mother is not trying to avoid payment. She has made numerous attempts to resolve the issue. However, someone dropped the ball, failed to follow up, failed to take the next step, a step that would have resulted in payment a long time ago and instead, threw the claim at an agency.
I understand that Kaiser Permanente is not a credit granting institution and therefore would not employ traditional credit and collection personnel. Rather they have billing clerks, untrained in the art of negotiation, unskilled in dispute resolution, ignorant of tact. They have an insurmountable pile of bills on their collective desks that they try to get through as quickly as they can. They pass the buck until it goes to the collection agency and it comes back to haunt them only when the son of an abused by they the system Mother goes ballistic.
In a time when the discussion about national healthcare centers around the quality of that care and the fear a lot of people have is in the end it will resemble Kaiser Permanente, the hospital would be wise to shore up its public image. An easy start is to handle minor billing problems better than it does. This is where Strategic Credit Management Solutions can help. We know billing systems and we know how to communicate with the public and the consumers. We can teach those who need to know, how to follow up, how to communicate with the customers and now to resolve disputes. We’ve been doing it for over thirty years. Not only would it get the bills paid faster, it would make for a more satisfied customer. See our website http://powerscredit.com/.
Your comments are welcome. E-mail us at patrickpowers@sbcglobal.net.
What is so galling is that Kaiser sent this claim to a collection agency, not because whoever is responsible for collecting outstanding bills had already exhausted all in house attempts to collect it. It was sent to a collection agency because, there is a designated schedule. After a certain amount of time, unpaid balances are sent to a collection agency. That clears it off of the desk of some hapless billing clerk whose expertise for handling unpaid bills is nil. Because it does affect credit ratings, collection agency assignments should be considered beyond expediency. My Mother is not trying to avoid payment. She has made numerous attempts to resolve the issue. However, someone dropped the ball, failed to follow up, failed to take the next step, a step that would have resulted in payment a long time ago and instead, threw the claim at an agency.
I understand that Kaiser Permanente is not a credit granting institution and therefore would not employ traditional credit and collection personnel. Rather they have billing clerks, untrained in the art of negotiation, unskilled in dispute resolution, ignorant of tact. They have an insurmountable pile of bills on their collective desks that they try to get through as quickly as they can. They pass the buck until it goes to the collection agency and it comes back to haunt them only when the son of an abused by they the system Mother goes ballistic.
In a time when the discussion about national healthcare centers around the quality of that care and the fear a lot of people have is in the end it will resemble Kaiser Permanente, the hospital would be wise to shore up its public image. An easy start is to handle minor billing problems better than it does. This is where Strategic Credit Management Solutions can help. We know billing systems and we know how to communicate with the public and the consumers. We can teach those who need to know, how to follow up, how to communicate with the customers and now to resolve disputes. We’ve been doing it for over thirty years. Not only would it get the bills paid faster, it would make for a more satisfied customer. See our website http://powerscredit.com/.
Your comments are welcome. E-mail us at patrickpowers@sbcglobal.net.
Wednesday, August 12, 2009
The Ultimate Collection Letter
It’s summer, who wants to think? Sit back, relax with a cold one and I’ll tell you a little story.
Once upon a time, when Disco was dying and Grunge was still Seattle garage bands, I went to an all day seminar at the famous Biltmore Hotel in downtown Los Angeles. The topic: “The Ultimate Collection Letter”. In those days step one in the collection process was a friendly reminder letter. Step two was a follow up letter, usually beginning with a remark about not responding to letter number one. Step three was a letter that implied a threat of some sort. Finally, someone would actually pick up the phone and call. Obviously there was a demand for collection letter verbiage that would inspire an immediate check issuance by the reader.
The ballroom was packed with credit people hungry for knowledge on the subject. The speaker promised a revolutionary letter format; one that literally turned letter writing on its head. Yes, it was an upside down letter! The speaker was recommending that the letter head be on the bottom of the letter, the debtor’s name and address should be positioned on top and you immediately begin with the closing: pay or else. In other words, the letter should cut to the chase in the opening line. Collection letters, normally, started off with something like, “apparently our previous correspondence was been lost” or “our previous reminders have been ignored” or “surely you understand the importance of good credit”. Our speaker was suggesting that letters begin, “you owe $X, pay it now!” or something along those lines.
I took all of this information back to the office and without the benefit of a computer, typed about fifty of these sure fire, guaranteed to get the debtor to pay, upside down collection letters. At the time I was working for a lumber company that had home centers in several of the most uninhabitable locations in California, Arizona and Nevada. I chose as my initial sample, the mostly delinquent customers that had charged at the Parker Arizona store. The store manager was responsible for all credit and collection activity. My role was to train and introduce proper procedures. However, the manager had the final say, and since the store as well as most of Parker, serviced the local Colorado Indian Tribe, the manager willingly extended the local Indians the credit they needed to purchase building materials, cast iron skillets and Thunderbird wine despite the fact that there was no practical legal recourse should they default; which they did en masse.
I was hopeful that at least some of the debtors would respond with at least a token payment. I did not have high expectations; maybe ten percent would have a conscience and recognize their responsibilities as debtors. I typed and typed for days and sent all of the letters on the same day and sat back to await the checks.
Zip. Nada. Nothing. I did not even get any return to sender mail. It was as if all of the letters I mailed were dropped into one large incinerator.
The experience taught me a valuable lesson. Collection letters by and large are a waste of time. You want someone to pay you, call them up and ask them to. Most of the time they will; (though I cannot speak for the Colorado Indians).
Strategic Credit Management Solutions comes from experience. We can provide a total package of training techniques, including effective collection letters. See our website at http://powerscredit.com/. You can e-mail us at patrickpowers@sbcglobal.net. Your comments are welcome.
Once upon a time, when Disco was dying and Grunge was still Seattle garage bands, I went to an all day seminar at the famous Biltmore Hotel in downtown Los Angeles. The topic: “The Ultimate Collection Letter”. In those days step one in the collection process was a friendly reminder letter. Step two was a follow up letter, usually beginning with a remark about not responding to letter number one. Step three was a letter that implied a threat of some sort. Finally, someone would actually pick up the phone and call. Obviously there was a demand for collection letter verbiage that would inspire an immediate check issuance by the reader.
The ballroom was packed with credit people hungry for knowledge on the subject. The speaker promised a revolutionary letter format; one that literally turned letter writing on its head. Yes, it was an upside down letter! The speaker was recommending that the letter head be on the bottom of the letter, the debtor’s name and address should be positioned on top and you immediately begin with the closing: pay or else. In other words, the letter should cut to the chase in the opening line. Collection letters, normally, started off with something like, “apparently our previous correspondence was been lost” or “our previous reminders have been ignored” or “surely you understand the importance of good credit”. Our speaker was suggesting that letters begin, “you owe $X, pay it now!” or something along those lines.
I took all of this information back to the office and without the benefit of a computer, typed about fifty of these sure fire, guaranteed to get the debtor to pay, upside down collection letters. At the time I was working for a lumber company that had home centers in several of the most uninhabitable locations in California, Arizona and Nevada. I chose as my initial sample, the mostly delinquent customers that had charged at the Parker Arizona store. The store manager was responsible for all credit and collection activity. My role was to train and introduce proper procedures. However, the manager had the final say, and since the store as well as most of Parker, serviced the local Colorado Indian Tribe, the manager willingly extended the local Indians the credit they needed to purchase building materials, cast iron skillets and Thunderbird wine despite the fact that there was no practical legal recourse should they default; which they did en masse.
I was hopeful that at least some of the debtors would respond with at least a token payment. I did not have high expectations; maybe ten percent would have a conscience and recognize their responsibilities as debtors. I typed and typed for days and sent all of the letters on the same day and sat back to await the checks.
Zip. Nada. Nothing. I did not even get any return to sender mail. It was as if all of the letters I mailed were dropped into one large incinerator.
The experience taught me a valuable lesson. Collection letters by and large are a waste of time. You want someone to pay you, call them up and ask them to. Most of the time they will; (though I cannot speak for the Colorado Indians).
Strategic Credit Management Solutions comes from experience. We can provide a total package of training techniques, including effective collection letters. See our website at http://powerscredit.com/. You can e-mail us at patrickpowers@sbcglobal.net. Your comments are welcome.
Wednesday, August 5, 2009
Top Ten Ways Strategic Credit Managment Can Increase Your Business
It is a myth that a credit department is a “sales prevention” department or a necessary expense rather than a revenue generator. A well oiled credit department, acting as a partner rather than a foe to sales can actually help increase sales. Here’s some ideas.
1. Extend credit to customers others have turned away
No, I’m not suggesting you throw caution to the wind and take on dangerously high risk and extend credit to anyone who wants it. That is a recipe for disaster. Rather, I am suggesting that you do a comprehensive credit analysis and know everything there is to know about the prospective customer. In short, know the risks and be prepared for them and be in a position to control the risk. For example, the inexperienced or rigid credit manager may deny a customer’s credit application on the basis of a history of slow pay. The customer is paying everyone one else sixty days slow, so credit denied and there go all of the potential sales. If you are strategic, you’ll address the slow payment trend directly with the customer and learn why payments are slow. There could a dozen reasons and not all of them the fault of the customer. Now, give the customer an opportunity to commit to you payment terms that are more to your liking and be prepared to follow up they day the customer fails to comply. The customer just may surprise you and you may lock up all of his business. The best way to control a customer is to create a dependency. If he can’t get credit elsewhere, he’ll give you all of this business.
2. Extend the maximum credit allowed, not just what the customer requested
I see this all of the time. Either the customer puts a conservative amount on that line on the application asking for an amount, or the sales rep, trying to get the account open with any line, submits one that is too low. Or, the amount on the application is simply the amount of the first order. The customer already has a supplier and wants to charge something his normally vendor cannot. The credit application is processed; things look good, very good in fact, so the conservative line is approved. However, if you are being strategic, you’ll determine what the maximum credit line could be, given the customer’s history and financials. Then, you’ll tell him, particularly if it is above his asking amount. Better yet, if the line is higher than his current vendor’s line, he’ll think you really want his business and he just may give you more of it.
3. Process credit applications faster than anyone else
Sometimes a customer needs your product yesterday. He realizes he doesn’t have an account with you so he either applies and hopes for the best, or he finds someone with whom he’s already set up and buys it there. If you are strategic, you’ll waste no time processing the credit application. In fact you’ll get started on it even if it’s not complete. You can fill in the blanks later. It should take less than an hour to get a sense of the customer’s credit worthiness; if it’s good, act like you want the business and accommodate. I’ve seen credit manager refuse to even consider a credit application until the one in hand is signed by an officer or owner. In a rush, do the analysis, make a decision and tell the customer, you are ready to go, just please fax over the signature page. Not only will the customer appreciate your extra effort, he’ll remember it when he needs to place another order. Not only that, you’ve made friends in the sales department and that can never hurt. Pre-qualify customers
4. Pre-qualify customers
Nothing aggravates a sales rep more than after working hard to finally get an order from a customer to have it denied for having poor credit. Being strategic is working with the sales group by having them submit their leads and doing a cursory credit check. Businesses with very good credit and very bad credit are easy to identify. So even a minimum credit check will tell you where the customer’s credit will fall. You can weed out the very bad high risk ones and notify sales not to waste their time and you can check the good ones and let sales know to go full steam ahead. As for the majority, if you are strategic, you’ll come up with the minimum line you could accept with what you know and tell the sales rep you’ve already approved the account. Again, not only are you a hero with sales, the customer will be flattered that he has an approved line before he even before asking for one. It might be the one thing that gets that first order.
5. Negotiate terms
Rather than turn down a customer, negotiate the terms. Remember, Cash On Delivery is a term. If you are not comfortable with extending credit with a customer for the standard thirty days, negotiate something like ten day terms or payment upon receipt of the invoice and be prepared to follow up on those kinds of terms. They customer will appreciate your giving him credit and will give you more of his business. Sometimes, businesses, particularly new ones, just need a little time to pay for the orders. If you give them that time, they are not only building their own credit history, they’re cementing their relationship with you and will do the majority of their business with the company that helped them out.
6. Establish a relationship
The sales rep does it, why can’t the credit manager? Customers will pay those they like and they’ll avoid those they don’t. It’s human nature. You don’t need to be the debtor’s best friend, but you can be a friend. When the personnel of one business like the employees of their vendors, they’ll do more business with them. It does no good for the sales rep to have a good relationship with a principal of a business only to be told out there on the golf course that his accounts payable clerk is forever complaining about the credit department. Good will extends to all levels. I’ve seen businesses take their business elsewhere because they could not get along with a cantankerous collector.
7. Be a credit resource
Along with creating a relationship, you can be a credit resource for you customer. Offer to do credit checks on some of their customers. If they are contractors, let them know when jobs are complete so that can protect their interests just as you would. Inform them of the latest trends in the industry. You may also assist them with your expertise. Pass on your collection tips for example. Anything you can do to help your customer make smart decisions, keeps them from turning into a risk. If your customer does not have a sophisticated credit office, the resources you provide are extras they get by being a customer and if they value the help, they’ll keep on buying.
8. Be a third party collector
If your customer cannot pay because he’s not been paid, jump in and help him out. This works in construction. If my customer is a subcontractor dependent on the general to pay, I’ll call the general. Sometimes it’s enough to ignite payment and my customer was saved having to do something he’d rather not do. We become partners this way and I get a larger share of the business.
9. Aggressively assist in dispute resolution
Nothing sours a relationship like unresolved disputes. Often the dispute has nothing to do with credit. It’s pricing or something to do with shipping or production. But if all you do is sit back and wait for something to happen, you’ll have little more than an outstanding receivable and a frustrated customer. However, if you are on the forefront of fixing the problems, the customer will recognize your company as one that takes care of things. They’re more likely to do more business with you.
10. Don’t be Bureaucratic
All of these suggestions point to one theme. Avoid appearing to be an impersonal, uncaring rule driven bureaucrat. Customers want to do business with companies that attend to their needs with a personal touch. The fastest way to alienate a customer is by insisting that everything be done by your rules and policies. If you are strategic, you get what you need by making the customer believe he’s the only customer you have and you’ll do just about anything for him. If he thinks you are willing to bend the rules a little, because you think he’s special, he’ll give all the business he can rather than give it to someone who treats him like a number.
If your credit department needs to be more strategic in its practices and procedures, contact us at Strategic Credit Management Solutions at http://powerscredit.com/ or email us at patrickpowers@sbcglobal.net. Your comments are welcome.
1. Extend credit to customers others have turned away
No, I’m not suggesting you throw caution to the wind and take on dangerously high risk and extend credit to anyone who wants it. That is a recipe for disaster. Rather, I am suggesting that you do a comprehensive credit analysis and know everything there is to know about the prospective customer. In short, know the risks and be prepared for them and be in a position to control the risk. For example, the inexperienced or rigid credit manager may deny a customer’s credit application on the basis of a history of slow pay. The customer is paying everyone one else sixty days slow, so credit denied and there go all of the potential sales. If you are strategic, you’ll address the slow payment trend directly with the customer and learn why payments are slow. There could a dozen reasons and not all of them the fault of the customer. Now, give the customer an opportunity to commit to you payment terms that are more to your liking and be prepared to follow up they day the customer fails to comply. The customer just may surprise you and you may lock up all of his business. The best way to control a customer is to create a dependency. If he can’t get credit elsewhere, he’ll give you all of this business.
2. Extend the maximum credit allowed, not just what the customer requested
I see this all of the time. Either the customer puts a conservative amount on that line on the application asking for an amount, or the sales rep, trying to get the account open with any line, submits one that is too low. Or, the amount on the application is simply the amount of the first order. The customer already has a supplier and wants to charge something his normally vendor cannot. The credit application is processed; things look good, very good in fact, so the conservative line is approved. However, if you are being strategic, you’ll determine what the maximum credit line could be, given the customer’s history and financials. Then, you’ll tell him, particularly if it is above his asking amount. Better yet, if the line is higher than his current vendor’s line, he’ll think you really want his business and he just may give you more of it.
3. Process credit applications faster than anyone else
Sometimes a customer needs your product yesterday. He realizes he doesn’t have an account with you so he either applies and hopes for the best, or he finds someone with whom he’s already set up and buys it there. If you are strategic, you’ll waste no time processing the credit application. In fact you’ll get started on it even if it’s not complete. You can fill in the blanks later. It should take less than an hour to get a sense of the customer’s credit worthiness; if it’s good, act like you want the business and accommodate. I’ve seen credit manager refuse to even consider a credit application until the one in hand is signed by an officer or owner. In a rush, do the analysis, make a decision and tell the customer, you are ready to go, just please fax over the signature page. Not only will the customer appreciate your extra effort, he’ll remember it when he needs to place another order. Not only that, you’ve made friends in the sales department and that can never hurt. Pre-qualify customers
4. Pre-qualify customers
Nothing aggravates a sales rep more than after working hard to finally get an order from a customer to have it denied for having poor credit. Being strategic is working with the sales group by having them submit their leads and doing a cursory credit check. Businesses with very good credit and very bad credit are easy to identify. So even a minimum credit check will tell you where the customer’s credit will fall. You can weed out the very bad high risk ones and notify sales not to waste their time and you can check the good ones and let sales know to go full steam ahead. As for the majority, if you are strategic, you’ll come up with the minimum line you could accept with what you know and tell the sales rep you’ve already approved the account. Again, not only are you a hero with sales, the customer will be flattered that he has an approved line before he even before asking for one. It might be the one thing that gets that first order.
5. Negotiate terms
Rather than turn down a customer, negotiate the terms. Remember, Cash On Delivery is a term. If you are not comfortable with extending credit with a customer for the standard thirty days, negotiate something like ten day terms or payment upon receipt of the invoice and be prepared to follow up on those kinds of terms. They customer will appreciate your giving him credit and will give you more of his business. Sometimes, businesses, particularly new ones, just need a little time to pay for the orders. If you give them that time, they are not only building their own credit history, they’re cementing their relationship with you and will do the majority of their business with the company that helped them out.
6. Establish a relationship
The sales rep does it, why can’t the credit manager? Customers will pay those they like and they’ll avoid those they don’t. It’s human nature. You don’t need to be the debtor’s best friend, but you can be a friend. When the personnel of one business like the employees of their vendors, they’ll do more business with them. It does no good for the sales rep to have a good relationship with a principal of a business only to be told out there on the golf course that his accounts payable clerk is forever complaining about the credit department. Good will extends to all levels. I’ve seen businesses take their business elsewhere because they could not get along with a cantankerous collector.
7. Be a credit resource
Along with creating a relationship, you can be a credit resource for you customer. Offer to do credit checks on some of their customers. If they are contractors, let them know when jobs are complete so that can protect their interests just as you would. Inform them of the latest trends in the industry. You may also assist them with your expertise. Pass on your collection tips for example. Anything you can do to help your customer make smart decisions, keeps them from turning into a risk. If your customer does not have a sophisticated credit office, the resources you provide are extras they get by being a customer and if they value the help, they’ll keep on buying.
8. Be a third party collector
If your customer cannot pay because he’s not been paid, jump in and help him out. This works in construction. If my customer is a subcontractor dependent on the general to pay, I’ll call the general. Sometimes it’s enough to ignite payment and my customer was saved having to do something he’d rather not do. We become partners this way and I get a larger share of the business.
9. Aggressively assist in dispute resolution
Nothing sours a relationship like unresolved disputes. Often the dispute has nothing to do with credit. It’s pricing or something to do with shipping or production. But if all you do is sit back and wait for something to happen, you’ll have little more than an outstanding receivable and a frustrated customer. However, if you are on the forefront of fixing the problems, the customer will recognize your company as one that takes care of things. They’re more likely to do more business with you.
10. Don’t be Bureaucratic
All of these suggestions point to one theme. Avoid appearing to be an impersonal, uncaring rule driven bureaucrat. Customers want to do business with companies that attend to their needs with a personal touch. The fastest way to alienate a customer is by insisting that everything be done by your rules and policies. If you are strategic, you get what you need by making the customer believe he’s the only customer you have and you’ll do just about anything for him. If he thinks you are willing to bend the rules a little, because you think he’s special, he’ll give all the business he can rather than give it to someone who treats him like a number.
If your credit department needs to be more strategic in its practices and procedures, contact us at Strategic Credit Management Solutions at http://powerscredit.com/ or email us at patrickpowers@sbcglobal.net. Your comments are welcome.
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