Friday, November 22, 2013
To answer this question, often asked by clients and sales prospects, the following comments may be helpful.
· Relocating (skipping) to parts unknown.
· Loss of motivation to pay—the more time which elapses, the less motivated debtors are to pay.
· Faded memories—they forgot all about this debt.
· Statute of limitations concerns—legally, the claim is no longer enforceable.
· Businesses go under—the lifespan of a troubled company is short, especially in difficult economic times.
· Here today gone tomorrow—some debtors intentionally run up debts, take the goods and services and run (or form new businesses with new legal identities which make collections difficult or impossible).
Doesn’t the collection professional go about bill collecting the same way I do? Yes, in many instances the procedures are very similar but just the impact of having a third party involved can be very effective coupled with the very specialized training and techniques developed by collection professionals to bring about results.
Monday, November 4, 2013
If you’ve spent time around a toddler, you know that you should never, ever make an idle threat. As soon as the little one knows you’re flexible and won't really enforce the threats you make, she’ll start pushing the limits to see when (if ever) you’ll actually carry out your threat. Yes, I’m going to say it: Customers are like toddlers.
Threats like, “I’m going to sue you with the biggest lawsuit you’ve ever seen if you don’t send me my $500 by Friday,” or, “I’m cutting you off Friday and you’ll never purchase from us again, unless I receive $500 . . .” are more often made by a hotheaded credit executive than by a calm collections professional.
What can happen if you make a hollow threat?
* If the debtor doesn’t believe you, or you don’t in fact do what you threatened, expect further abuses of your credit policies by your slow-paying customer. You’ll have thrown away your credibility.
* Threats made in the heat of the moment can alienate good customers and cause them to take their business elsewhere.
Either way, cash flow suffers.