If you wait to mumble a word about collections after all is said and done, then you probably have an awkward situation on your hands wherein a good customer may turn angry and browbeat your pricing down. Here’s how to avoid that and vastly improve your collection rates to boot!
“No mother ever looked at her baby in the crib and dreamed it would grow up to be a salesman.” I believe it was sales guru Zig Ziglar who said that. But whoever said that, it’s undeniably true. No mother ever dreams her baby will be in sales or be a collections agent. Perhaps the unconscious awareness of that sentiment is why so many people have an aversion to selling a product or service or collecting money for it.
That’s totally ironic, considering everyone starts selling and collecting pretty much from the moment they learn to speak. Don’t believe me? Watch a toddler sell his parents on the idea he needs a cookie or a toy and then watch him collect it! Or a teen sell the idea he or she needs the keys to the family car. You think that teen is going to go away without those keys?
So if all toddlers and teens can effectively sell and collect, why can’t all employees? Because a) they don’t think it their job and/or b) you didn’t ask them too.
So ask them too.
Of course, you have to change their mindset first so that upselling and collecting receivables is not awkward for them or your clients.
It’s all a matter of conditioning actually. If clients are conditioned to expect frank discussions on pricing, particularly when they introduce scope creep in a project or ask for faster than normal service, then cost and collection discussions come as no surprise and without awkwardness.
If you wait to mumble a word about collections after all is said and done, then you probably have an awkward situation on your hands wherein a good customer may turn angry and browbeat your pricing down.
Much, much better to have those talks along the way, as changes happen, rather than try to justify the costs at the end. That means waiting on accounts receivables to bill and collect is far too late. Employees who are aware of orders and changes along the way need to address the costs issue as they occur.
Conversely, if employees are conditioned to think that their pay comes from collections and sales, rather than drops from some paycheck fairy in the sky, then they become more attuned to the need for everyone to upsell and collect on accounts receivables.
Once they understand the need, train them on the how. Specifically, train them to have pricing and costs discussions with customers upfront and throughout project or product discussions. Train them to think of this as a natural extension of customer relationship management. The mantra should be “never surprise the customer with end costs, tell them beforehand.”
You’ll find a good guide on how to train employees on collections in an article written by David Kent in AIA Best Practices.
Be sure to also teach employees how to correctly perceive collections and sales so that they can overcome their own mental hangups and proceed with the task in a more natural way.
Last but not least, equip them to collect and upsell. Make sure all employees with customer contact have the means to know who owes the company so they’ll know when and from whom to try to collect. But also make sure they know what the customer has already bought so they can suggest additional products and services accordingly.
Train them to look for opportunities to upsell too. For example, a field service rep may note items that need repair or replacement that are not on his work order. Make sure that rep knows to suggest such to the customer while onsite and give him the means to log the order on the spot. The same applies to collections. If the service tech is aware money is due when he makes the service call, he should have the means to collect payment and be trained to do so before he proceeds with delivering the new service.
Look at all customer facing positions for similar ways to improve your collections and sales. Keep in mind that your entire staff is an experienced resource for increased sales and collections, as they have been developing these skills since they were but wee toddlers.
Pam Baker is the author of eight books and hundreds of technology articles published daily in leading online and print publications. She is a member of the National Press Club (NPC) and the Internet Press Guild (IPG). You can reach her or follow her on Twitter and on Google+.Tags: Business,Management