Providing these great sales people follow this process
Yet again this post has been inspired by a comment from one of my customers. We met up recently to work on a marketing piece, but ended up discussing ways to get one of his clients to pay an outstanding bill. He was getting a little stressed about chasing the client for money and wasn’t sure how to handle it. Great sales people would know how to handle this easily.
It’s always a tough conversation to have with customers. However, by being honest and up front you can make it work for both of you.
Whoever within a business is responsible for that client should ideally be the one who has the conversation about settling a bad debt. That person, normally you or the salesperson should know the client best. If they don’t, then they should as they need to quickly understand the reason why the bill is unpaid.
“Remember that credit is money – Benjamin Franklin”
How do you start chasing for money?
Here are a few questions a sales person – or anyone in a business who sells – could use to get the conversation going.
“Did you receive our invoice dated xxx?”
“Have you any queries on the invoice that’s preventing you from not settling the bill?”
“Are you happy with the service/product we provided?”
These questions will flush out what the real issue is that’s stopping them settling the invoice, or if they are just trying to stretch payment terms out to the max. Often there is a simple misunderstanding, which left too long can easily be blown up into a bigger issue.
If there is nothing really wrong with the way the product or service was delivered and the invoice is as described in the proposal, then its time to hand back to credit control to take further steps. This is the point when sales people need to step back from the issue.
When credit control should take over
My theory is that credit control should only be really necessary when a client has money issues that are nothing to do with the seller. Selling is a chain of commerce, which ends in a buyer exchanging their cash for your goods or services. So if the sale hasn’t completed then the sales person is still responsible for influencing that client’s decision to buy.
The reason many sales people often get this wrong is that they consider their job is over as soon as the order is placed. They think that once the order is in then it is someone else’s responsibility to deliver the goods and if the client doesn’t pay then it is credit control’s responsibility to chase for money.
Great sales people know prevention is better than cure
I really only became successful in sales when I worked out that if I could prevent my clients having problems then I would be able to spend more time winning new and repeat business. This meant I would make more money.
These are some of the things I started to do.
- Clearly state what the client was going to get and by when to prevent any misunderstandings.
- Make sure clients understood my payment terms before they placed an order.
- Checked they knew what they were doing by offering the opportunity to ask questions about the sale.
- When they placed the order I always thank them for doing so and again take the opportunity to mention payment terms.
Great sales people qualify early on
The single most important thing I started doing was to qualify the sales opportunity as early in the sales process as possible. Where possible I started to ask both myself, and my potential customer if they could afford to buy.
If the answer was no then I would quickly move onto another prospect. If a client can’t afford to place an order then they certainly can’t afford to pay for it, so why encourage them to buy in the first place.
Now there are ways to do this that doesn’t cause offence or embarrassment. If you struggle to get clients to pay on time then reviewing your sales process is definitely a great first step. Contact me for a free call to discover how.
Great sales people know that it is their responsibility to bring money into a business, not orders. This also applies to solo entrepreneurs too. Therefore everyone needs to understand that a certain element of their role must be credit control too!
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Interesting point of view, I never thought about it this way before. I do think that making things clear from the get go help so much, especially for those of us who tend to have a wondering mind. Thank you for sharing
I’m pleased you like my perspective Tamara. I have a wondering mind too, but making sure I follow a process has really helped me to focus on important sales tasks like making sure the money actually changes hands.
Great process Mike and thanks for sharing!