Peter Cox advises the best way to manage those customers who are facing tough financial times. 

Counselling account customers when times are bad is a skill – and like all skills these can be developed. There is much talk about an imminent credit squeeze and coupled with drought, the slowdown in the mining industry and the downturn in some local economies, many of your customers will face tough times ahead. If you and your staff are witnessing a slow down in account payments, an increase in business failures and the early warning signs of account problems, now may be the time to improve the effectiveness of your ‘customer counselling’.

Identify the problem

The initial step is to identify the problem. In debtor control this is relatively simple. Review your aged debtors trial balance. The first rule of credit management is that the longer it takes a debtor to pay, the less chance you have got of getting the money! Particularly if times are tough. Don’t assume that the account will eventually be paid as many pest managers do.

Make an appointment

The second step is to make an appointment to meet the customer and every effort should be made to meet the client’s preference, if possible. And where should we have the meeting? Really, does it matter? At the end of the day the important element is to have a meeting, if this is at the client’s location, so be it.

Be prepared

Preparation for counselling must be thorough. Review all outstanding invoices and ensure there are no disputes and credit claims. An ill-prepared pest manager works at a disadvantage. Anticipate the questions or objections the client may present.

Be tactful and courteous

Tact and courtesy are prerequisites of good credit counselling. If the customers conduct strains your ability to remain tactful and courteous, the meeting should be terminated.

An air of confidence is essential. This comes from preparation.

It is helpful that the client brings up the problem. You as a creditor should give them every opportunity to do so. Be a good listener, but also be prepared to direct the conversation to the desired outcome, that is, to get a commitment from the client to make a payment and bring their account back into line.

Objectivity and the personal approach go hand in hand. Be aware of the dangers of an emotional approach, remembering it is all too easy to get the customer offside. Be as specific as possible with recommendations, keeping in mind legal implications. Do not hesitate to compliment the client for their commitment.

The final components are to reconfirm the arrangement with the client restating the date you expect payment. Record the commitment in writing and the date to follow up in the future if the commitment is not met.

Remember, if you do not ask for it, you may never receive it, particularly for some pest managers in these tough times.

Peter Cox, Peter M Cox & Associates