Yet again, this week’s column has been inspired by a comment from one of my customers. We met up to work on a marketing piece, but ended up discussing ways to get one of his clients to pay an outstanding bill.
It’s always a tough conversation to have with a customer, but by being honest and up front you can make it work for both of you. Whoever within the business is responsible for that client should ideally be the one who has the conversation about settling a bad debt. The sales person should know the client best and if they don’t, then they need to quickly understand the reason why the bill is unpaid.
Here are a few questions a sales person — or anyone in a business who sells — could use to get the conversation going.
- “Did you receive our invoice dated X?”
- “Have you any queries on the invoice that’s preventing you from not settling the bill?”
- “Are you happy with the service/product we provided?”
These questions will flush out if there is a real issue that’s stopping them settling, or if they are just trying to stretch payment terms out to the max.
Often there is a simple misunderstanding, which left too long can easily be blown up into a bigger issue. If there is nothing really wrong with the way the product or service was delivered and the invoice is as described in the proposal, then its time to hand back to credit control to take further steps. This is the point when sales people need to step back from the issue.
My theory is that credit control should only be really necessary when a client has money issues that are nothing to do with the seller. Selling is a chain of commerce, which ends in a buyer exchanging their cash for your goods or services. So if the sale hasn’t been completed, then the sales person is still responsible for influencing that client’s decision to buy.
The reason many sales people often get this wrong is they consider the deal done on the order being placed. They think that once the order is in, then it is someone else’s responsibility to deliver the goods, and if the client doesn’t pay then it is credit control’s responsibility to chase for money.
I really only became successful in sales when I worked out that if I could prevent my clients having problems then I would be able to spend more time winning new and repeat business and therefore make more money. These are some of the things I started to do.
- Clearly state what the client was going to get and by when
- Make sure clients understood my payment terms before they placed an order
- Checked they knew what they were doing by offering the opportunity to ask questions about the sale
- When they placed the order I always thank them for doing so and again take the opportunity to mention payment terms
However the most important thing I started doing was to qualify the sales opportunity as early in the sales process as possible. Where possible I started to ask both myself, and my potential customer, if they could afford to buy. If the answer was no, then I would quickly move onto another prospect. If a client can’t afford to place an order then they certainly can’t afford to pay for it, so why encourage them to buy in the first place?
Remember the sales person’s responsibility is to bring money into a company, not orders. Therefore a certain element of their role must be credit control too.