You wouldn’t think that collecting money which you are owed would be that difficult. As modern business owners know all too well, however, getting what’s coming to you can feel like an insurmountable challenge.
The truth is, though, that usually, customers who don’t pay will fall into a particular “category,” and if you can figure out which category the delinquent customer is in, you can usually have a better chance of collecting on his or her debt since you’ll know, after you read our article, which strategies work best for which customers.
Difficult Customer #1: The Unorganized Customer
The unorganized customer is the one who isn’t purposefully not paying his or her bills but is just having a hard time keeping all his or her responsibilities and due dates straight. You can nip this bad habit of non-payment or late payment in the bud by sending out reminder emails early (before the bill comes due) and consistently, by applying harsh penalties for past due invoices, and by keeping in very regular contact with the customer.
These customers are simply customers who need a lot of reminding, and if you take care of the reminding part and punish the customer when the reminders don’t work, they’ll start to prioritize and take care of your payments, guaranteed.
Difficult Customer #2: The “Going Out of Business” Customer
Depending on what sort of business you run, there’s a pretty good chance that some of your customers will be not just people but fellow business owners who are buying goods or services for their own businesses.
If that’s the case, you do run the risk of the business going out of business for good, which might mean filing bankruptcy or just plain not being able to pay bills.
If this happens to you, don’t panic. Utilize your usual collection strategies, getting progressively and progressively more demanding. If that doesn’t work or if the client truly can’t pay what’s owed, your best bet is to offer a doable payment plan. That way, you might collect the money slower, but at least you’ll still collect it! If none of that works, then your only hope, unfortunately, is to take the customer to court or to forget the debt.
Difficult Customer #3: The Angry Customer
Some people, instead of owning up to their inability to pay, will turn their shame and anger onto you. These are the customers who lie to you when you’re trying to collect on debts, who avoid you entirely, who say they never got your invoice or bill, or who claim to be unsatisfied with your products or services to try and get out of paying.
Do your best to handle these customers with care and respect, even if it seems like they don’t deserve it. Also, try these helpful strategies that often work with “difficults:”
l Mail communications via certified mail, so you have proof they receive it
l Record ALL phone conversations and other communication (you should be doing this anyway!)
l Continue your collection efforts no matter what, and let them know that you will do so until a solution is reached
l Send reminders of possible penalties for late payments or non-payment
l Turn up the heat by including senior leadership in your correspondence
Unfortunately, even if you can figure out what type of customer you’re dealing with and then act appropriately, sometimes your collection strategies just plain won’t work. Some people don’t care about their credit or about what might happen to them if they don’t pay. However, using these strategies and “pinpointing” customers can help your personalized collection efforts to be successful a lot more often.