Making difficult customers pay up

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Information about Making difficult customers pay up
Business

Published on October 23, 2014

Author: okwako

Source: slideshare.net

Description

Money, money, money..here's how to deal with those customers who love holding onto your money.

1. MAKING DIFFICULT CUSTOMERS PAY UP Trust is necessary to a healthy business relationship. Is your trust in a particular customer permanently eroded? Can you correct the misunderstanding and move forward? One of the best signs of eroded trust is “The Hassle Factor”—how much time are you and your staff regularly wasting in collection efforts? The question then becomes, “Can I redefine my rules to resolve/eliminate the hassle?” If you don’t operate with a high gross margin (i.e. a healthy mark-up) then you are not in a good posi-tion to wait for your money. The potential loss here is not lost revenues, it’s the cost of goods sold and the time spent managing the account. To reduce this risk especially for a small business, you can use the following collection strategies: • Leverage - If you’re providing a hard-to-find product or service, you have heavy-duty bargaining power. Leverage it from the onset to facilitate payment. • Give a discount - Offer the customer an immediate 5 to 10 percent discount if he or she pays you off right away. The discount will be offset by the time and energy you will save in your collection efforts. Note that this means pricing your goods higher by 5-10%. • Take a credit card - If you accept credit cards, suggest the customer transfer his balance onto one and pay it off via his credit card company. Then delinquent payments become the customer’s problem, not yours. • Have a heart-to-heart - Meet with the customer, get to the heart of the problem, and set up a work-able valeriefoods@gmail.com +254 (0) 725 693920 P.O. BOX 6891-00200 VALERIE FOODS AGENCY, THE BAZAAR - MEZZANINE ONE, MOI AVENUE - NAIROBI. valeriefoods@gmail.com +254 (0) 725 693920 P.O. BOX 6891-00200 VALERIE FOODS AGENCY, THE BAZAAR - MEZZANINE ONE, MOI AVENUE - NAIROBI. payment schedule. • Barter - Think creatively. In lieu of cash, can the customer pay you in goods or services? • Recover your product - Offer to take back all merchandise that hasn’t been sold to shrink the bill. • Take it upstairs - Take your complaint to the highest level of the company. • Scare them - Threaten to tarnish the customer’s name throughout the industry by announcing its delinquency. This is a tough approach that won’t lay the groundwork for a future relationship, but it can be effective.

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