7 Reasons Why People Pay – and how you can use this knowledge

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7 Reasons Why People Pay – and how you can use this knowledge

Although you may feel like applying some of Mike Tyson’s skills when chasing slow payers, truth is, we can’t, and, hopefully, don’t!

But, knowing the seven main reasons why people pay their accounts is invaluable knowledge. Because when you know why customers pay allows you to apply influence to make them pay more quickly.

So, what ARE these seven reasons?

1 – Need

If you supply electricity to a business, account collections are easy. The threat to cut off supply gives you excellent leverage if needed. Same for any other basic needs … food, phone connections, etc.

2 – Honesty, Appreciation and Obligation

These are influencial factors but when “push comes to shove” and money’s short, they’re not much use as a collection tool.

3 – Conscience

You can play with this one, but, again, if a customer has a cashflow problem …

4 – Embarrassment

Used wisely, this can be very effectively used. Click here for an excellent example.

5 – Fear Of The Unknown
We use this reason very successfully almost every day at every client.
To explain:
The only people that really know what you’ll do if an account isn’t paid are those people that work inside your business. In other words, you and your staff. Your account customers don’t!! So, if you wrote and said
we will be obliged to revert to policy if this is account is not brought up to date in the near future
– your customers will have NO idea what that means! Click here for a more detailed explanation of how to use Fear Of The Unknown as an effective collection technique.

6 – Physical Safety

Be honest, when you’re getting really “hot under the collar” (frustrated!) it’s nice to think about doing “something”, especially to some debtors, but this isn’t an approach I’d ever recommend! So, this is NOT an option. But now, to the best one of all ….

7 – The “How Do I Get Rid Of You” Factor

This is where ALL successful credit management systems begin and end. Being Hard To Ignore. Always there, expecting to be paid on time and simply asking for it if you are not. So simple, yet so powerful.
Focus on #5 and #7. They’re the effective methods. Because when you know WHY customers pay, you will know how you can influence them to pay you within your own payment terms.

By | 2017-08-10T04:31:27+00:00 June 4th, 2010|miscellaneous|0 Comments

About the Author:

Have you ever wondered why a client does business with you and then ignores your invoice like they had no intention of paying it in the first place or they treat you like their own personal line of credit, leaving YOU dangling, waiting months for their payment? Unfortunately this situation is all too common and can even be puzzling for the most experienced business owner. If you’ve ever had to handle outstanding accounts or you are just so over non-payers, then we can help. Real-world skills, solutions, tips & strategies to get more accounts paid on time, and, most importantly, how to maintain customer goodwill while keeping YOUR cash flow in the positive. You will find the blog posts helpful but to get real results, contact us by using any of the forms on this site, by email or by phone. I’ve been involved in the management of accounts for over 30 years, heard every excuse in the book, can spot a non-payer at 20 paces. Finance Companies in the 70s (systematic, tough), professional firms in the 80s (no systems, too gentle) and, since then, just about every other sort of business you can think of. I’ve written books on the topic, spoken all over the place about it and the blog in this website is my way of “giving back”. I hope you find it helpful.

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