We have been hearing about some of the most persistent business problems prevalent in our industry today – and thought it would be well to comment on them…herewith the problems:
- How to collect from anyone (even Enron)
- What is lost when a customer leaves?
- Is sales training a waste of money?
- How to plan for growing sales when the recession ends
How To Collect From Anyone
- You do the math – don’t quote interest rates on past due accounts; state the dollar amount due if the invoice is not paid within terms.
- Stay consistent – language on the invoice should match that on the quote.
- Avoid billing at monthly intervals – rather bill at the time of delivery.
- Stagger your billing – don’t mail invoices on a set schedule but at the time of delivery – take credit cards where appropriate.
- Know your customer’s stress points – contact them at a time when you can exert the most pressure.
- Just drop by – don’t wait for the mail, but offer to pick up the check.
- Avoid the owner – entrepreneurs are less likely to pay up promptly because it’s their own dough they’re parting with.
- Call before the due date - get names and keep a journal.
- Use guilt not anger – pin the person promising payment to that commitment.
- Don’t hesitate to negotiate - ask for the oldest invoice first.
- Take legal action – when promises are broken, call in the legal troops.
- Be enterprising and relentless.
What Is Lost When A Customer Leaves?
What is the true value of a lost customer – greater than you think. Customers add more to the bottom line than the purchase price…they help market plastic products by word-of-mouth or just by being seen using them. Most think of customers as if they exist in isolation but this thinking ignores the interaction of customers with each other. This is especially true of customers using new products and/or new applications. This type of customer was probably convinced to leap into something new. This requires far more trust as they look more to one another than to advertising to make purchasing decisions.
Research has found that customers lost early in the product life cycle can be as much as four times greater than the value of a customer in the mature stage of the cycle. While it is generally agreed that 32% of all customers are found to be unprofitable, customer service costs, not just volume, should play an important role in ranking customers – volume-based discounts to large customers should include the cost of servicing them as well as the costs of value added services.
Another key issue is where has that customer gone – the distinction is between a customer that leaves for a competitor’s product or leaves the plastic industry completely.
This is called defection vs. disadoption and it affects our entire industry in times where customer retention is critical for companies as well as for the growth of the industry. Food for thought!
Is Sales Training A Waste Of Money?
Sales training will pay off if your most experienced people provide it, those most respected by the rest of your sales organization. Outside trainers don’t always relate to your people…so try the internal sales excellence council approach instead.
How To Plan For Growing Sales When The Recession Ends
I recommend NAW’s Marketing Plans for Growing Sales, Second Edition, which simply lays out a scenario, in simple terms, including how the web can aid in separating services from products…and get paid for them. The time to plan is now!