To be successful when Chasing Slow Payers there are three simple and fundamental rules to follow. We’ve already discussed the first rule – Start early and tell everyone what you’re doing & the second rule – Always Be The Good Guy. Now let’s look at the third … Become very hard to ignore.
Rule #3 – Become very hard to ignore
When my oldest daughter was nine years old her pocket money was $1.00. Each Friday it was my duty to have the correct money (coins or a note) available as plans had been made for that one dollar and commitments given. She trained me over a period of one month to have that dollar ready by applying this simple formula:
Friday + no money (correct change) = heaps of trouble for Dad.
If the dollar wasn’t ready on Friday, a conversation like this would follow:
“I’m sorry dear I haven’t got the right change“
“I didn’t go to the bank yesterday.”
“But Dad, you know it’s pocket money every Friday. When can I have it?”
“Ask your mother.”
“But she only sends me back to you. Have you got any change in your wallet?”
“I don’t think so.”
“Where is it – I’ll look for you.”
… and so it continued.
I knew that I’d been trained when I drove into my driveway at home one Friday night and realised that I didn’t have a one dollar coin in my pocket! (I could also see the silhouette of a small person behind our glass front door.) I reversed out of the driveway, drove down to the local shop, bought a litre of milk (that I didn’t need) to get the change and returned home victorious to proudly give my daughter her pocket money.
Four weeks. That’s all it took. It had now become a habit for me to have the pocket money ready for her each week.
The debtor (me) had to keep giving excuses and it became very obvious, very quickly who was in the wrong and she eventually trained her debtor (me) to pay on time before I was free to get away and do anything else. And she was only nine years old. She was simply applying this third rule. Become very hard to ignore.
So, are YOU hard to ignore?
Now let’s consider what you are doing to apply this rule in your business. It’s by far the most powerful rule, the one that really yields results. Yet, it’s the one most often not applied because of the fear of the client being upset, if it is.
Do you send out monthly statements?
Put stickers on those that have overdue balances maybe?
Rubber stamp them with something like “Payment Overdue”?
If you do, and that’s your collection system, then you are certainly not being hard to ignore because statements are extremely easy to ignore. (Would they affect you if you were a customer with an overdue account?)
They’re great for reconciling accounts but pretty useless as “collection tools”. And, if most of your clients only get one invoice from you every month, what are they reconciling anyway? One invoice? A couple of reminder letters, an email, a text message to their mobile phone or, at the very worst, a hand-written note on the statement from the person that did do the work would be far more effective.
Much more impact.
More “in your face” – without being offensive.
Harder to ignore.
As the old Chinese proverb goes …
“It is easy to stand a pain but difficult to stand an itch.”
How to apply this rule
All that you need to do to apply the third rule in any business is to carefully plan a collection system specifically for that business. One that.-
1. Is well documented – set up to be a “No Brainer” so that the answers to all “What do I do next?” questions have already been answered.
2. Excludes any “special” cases – customers that management never want followed up.
3. Takes into account the skill sets of the people nominated to work the system, send the letters, reconcile the accounts, make the phone calls, and factors such as the philosophy and resources of the business.
Once that has been done, you can become very hard to ignore without offending anyone. Just follow your own system. And, if you apply all three rules
You’ll get your accounts paid much more quickly. Guaranteed.