Thursday, October 06, 2005
Completing the Sale

From time to time we hear from one of our many contributors. I wanted to share this particular article with you from Abe WalkingBear Sanchez because I think he really hits the nail on the head in terms of completing the sale.

In business there still exists an out of date and misguided belief that past due credit customers are bad; that past due credit customers can’t / shouldn’t buy. This "risk management" view of credit and A/R management results in credit managers spending much of their time releasing orders from the "credit hold / do not sell" list, and leads to salespeople crossing streets to avoid an oncoming past due customer.

Many credit customers become past due because they’re disorganized or lazy about their A/P function. Some are playing games with paying vendors and suppliers; mistakenly thinking that practicing cash management (using vendors/suppliers as a form of short term financing and not paying late charges) is a good thing. Many more past due customers don’t pay because something is wrong.

The reason for contacting past due customers is not to collect, that what the enforcers do, but to "complete the sale." The goals being to keep credit customers current and buying, and to identify and control the small percent that represents a potential for loss.

In sales we want to point out how our product/service meets or exceeds the customer’s expectation, their hot button. In completion of the sale we want to resolve why the account is delinquent. If a customer is disorganized or lazy we become a friendly squeaky wheel. If something’s gone wrong, we fix it. If a customer has a short term cash flow problem, we work with them and encourage them and continue buying from us. If a customer has no idea when they’ll be able to pay we need to cut off further credit sales. If a customer is uncooperative, lies and breaks payment or other arrangements we need to cut off further credit sales and then get them out to a collector.

Thanks Abe for sharing ths critical lesson with us. You can contact Abe at(719) 276-0595 www.armg-usa.com

Copyright 2004 A/R Management Group, Inc. www.armg-usa.com All Rights Reserved.


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