The only people that really know the internal running of your business are the people that are in your business – that’s you and your staff. Most account customers will not.
Likewise, they will not know just how far you will go to recover payment of a debt. What you will do? When you’ll “blow your top” and and lose patience with them.
You can use this knowledge to your benefit. We call it “Fear Of The Unknown”. or “Fear of the Non-Specific”.
To explain: If you threaten to sue someone if they don’t settle your account by, say, 28th February, then what are you going to do if they don’t pay by that date? You can either
1: sue them (an expensive and slow way to get paid and it will be extremely unlikely that you’ll get any more business from THAT customer) or …
2: do nothing.
If you do nothing, then you’ve really “shot yourself in the foot“. What to do next? Will they believe you next time you threaten them? (You could try begging!)
Use the “Fear Of The Unknown” technique.
You can advise them (in writing) that if the account isn’t settled by a specific date that you’ll
* be obliged to report the account to Head Office who will then decide what the next course of action is to be, or
* have to revert to policy (even if you don’t have a policy – your customers don’t know that!)
* inform the local credit bureau of their default account (even if you’re not a member of a credit bureau – your customers don’t know that either!)
* be left with no alternative other than to engage a firm of lawyers to recover payment of your account in whatever manner they deem necessary.
* have to refer the matter to ….
Those are only a few suggestions but remember, if you say you’ll do something on a certain date and if payment isn’t received by that date and that ‘something’ is to sue them, then, if you don’t (sue them), all’s probably lost.
This technique provides an extra few steps to keep the pressure up. Fear of the Unknown. Check out these two posts
to see how to these were applied in real life. This isn’t just theory. It works. Try it. See for yourself.