How do you know who is the keeper?
In the work of commercial collections, careful attention to the customer’s story is the key to appropriate resolution to any debt.
The reason the story is so important is because it can help you differentiate the keepers from the customers you probably need to ditch.
As businesspersons, it grates on our every nerve to give a customer the heave-ho. We want to to build a large, solid client base of happy, paying customers – not kick customers to the curb.
Knowing which ones to keep and which ones to ditch can be difficult.
When you talk to a delinquent customer, listen for clues as you make note the details of the story. If your customer is clearly willing to pay but currently lacking the funds to do so, he’s probably working hard to make his payment to you. If his payment history has been solid up until now, he’s a keeper. Stick with him through the rough spot.
Conversely, if your customer has the ability to pay but is unwilling for a myriad of reasons/excuses, you’ll want to pursue the debt aggressively and dig deeper to weigh the costs of keeping the customer going forward. If payment issues have been going on for some time and are getting worse, it’s time to get serious about your business relationship. You may be losing money to keep the customer.
People can run into unforeseen issues that can slow payments. Jumping to conclusions out of frustration is a mistake. But letting a late payer slide can also be a mistake as it may set in motion the habit of putting your invoices at the bottom of the pile.
Only by talking with the customer, and listening intently can you determine if his aim is to get back on track or if it’s to give you the run-around. Remember, the run-around can cost you money!