Friday, 17 July 2015

Top 10 Steps to Making Powerful Commercial Collection Calls

     Over the last ten years, the number one topic requested at our credit seminars is “how to make an effective collection call.” The best medium for this still remains the telephone; however just picking up the phone is not good enough. If you don’t have a predetermined strategy in place, you’re probably spinning your wheels – being ineffective and costing your company money. 

So how do you improve?

Here are the top ten steps you can take right now:

1.       Know your customer and their business. Are they impacted by seasonal cash flow etc.?
2.       Deciding what strategies you will use to stay on track.
3.       Set goals for yourself. For example – reduce DSO by 12% to improve cash flow.
4.       Deciding and outlining which strategies you will use to achieve its goals.
5.       Create effective call scripts so the conversation flows well and you can effectively manage objections and/or stall tactics.
6.       Measure your results to see what works and what does not. Establish key performance indicators (KPI) to help benchmark future results/ activities.
7.       Make detailed notes of your conversations with your customers. Before hanging up the phone – provide the customer of a recap of your understanding of the conversation. Better to catch misunderstandings now.
8.       Try to establish quickly if the customer is slow paying because of a dispute or cash flow issues. You can increase customer satisfaction by simply listening. If there is a legitimate dispute – deal with it. If it is a cash flow problem – see if you can work with the customer.
9.       Be decisive. If you are getting many promises but no meaningful action (money) then consider bringing in a professional collection agency or lawyer. If you don’t follow through – your customer will take advantage of you.

10.   Consistency is key. Consistent follow up – consistency doing what you say you’re going to do. Customers (and your bossJ) will soon learn that your invoices get paid before others. 

Tuesday, 14 July 2015

My Most Satisfying War Story

  Early in my career as a commercial collector, I had a small local printing company as a customer. I had met the owner, Bernie, at a local Chamber of Commerce function earlier that week. It was a Thursday when I received a panicked call from Bernie explaining that his largest order had bounced a check for $18,000.00 and he was counting on the funds to make payroll the following Tuesday. 

  I drove to Bernie’s office and had a look at the check. It was drawn on a bank two time zones a head so I couldn’t simply drive over to the bank and certify the item. I asked Bernie if his customer was offering to replace the check and he said yes, but only $5,000.00 and it would have to be the following week because they had cash flow issues of their own.

  As any business owner can relate, Bernie was elated to finally land his biggest order to date. It wasn’t a simple printing job either. It was individually numbered and perforated lottery tickets. The order was a rush and Bernie and his team worked extra hours to get the order shipped on time. In fact, Bernie had paid extra to source special paper stock from his suppliers to complete the job.

  I took the check anyway and drove back to the office. Upon contact with the debtor firm, we got the same story as Bernie had received.

It Was 2:00 PM

  It was 2:00 PM on a Thursday.  Almost as an afterthought, we called the bank to see if there were sufficient funds on deposit and we learned that YES!! there was. I immediately couriered the check to the bank to arrive overnight for next day certification. We received the check back certified on the following Monday. Our firm deposited the funds into our trust account and the issued a special check run so Bernie could access his money in the time to meet his payroll.

  Bottom-line? Bernie meets his payroll – staff paid their bills and feed children not knowing how close they were to big problems.

  Today, almost 30 years later, Bernie’s firm is thriving and has grown considerably. Bernie has learned many practical tips and techniques to manage his cash flow; however he still likes to tell our story with pride. 

I Love This Business