Monday, November 4, 2013
Collection Techniques: Keep YOUR promises…don’t make idle threats
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.