# General Business Category > General Business Forum >  Customer service

## murdock

Customer service is only as good as the payment...you pay slow you get slow service...do you think this is the wrong approuch?

i can only offer and extremely efficient service to the customers who pay their bills on time...there is a chain reaction when payments are not made on time and until bad customers pay up it causes all sorts of issues and delays.

wholesalers and distributors use a  discount structure for early payemnt...how do you are a service company manage bad or slow paying customers?

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## Just Gone

> Customer service is only as good as the payment...you pay slow you get slow service...do think this is the wrong approuch?


I FULLY agree with this ............ there are too many people out there that forget this , that if and when they pay late and especially if you have to beg them to pay - they then expect you to drop everything and beetle off to their problem, because it is important to them.  They forgot that paying for the service was also important to the guy that gave them the service in the first place !

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## Ann.J

Agreed. For this you must consider a couple of tips to ensure speeding up your collection process:

1. You should determine why the payments are coming in so late and try resolving.
you should discuss payment terms with client at time of making the deal with them.
2. Make the payment system easier for the clients
3. Review on your late paying customer's history and change your terms when you deal with them again in future, or avaiod them altogether.
4. Send them reminders to pay on time. 
5. Keep a specific collection procedure and stick to it for all customers to avoid confusions

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AndyD (18-Jun-12), Blurock (18-Jun-12), Citizen X (19-Jun-12), Dave A (18-Jun-12), Nickolai Naydenov (18-Jun-12), ntsako.mpenyana@gmail.com (19-Jun-12)

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## Justloadit

Why should you have all this work to get your money. The client did not have to do all this work when he called you to resolve his/her problem.

I no longer do work on account any more. I still do have a few clients on account, but I have no problems with them on the payment side.

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## Dave A

> Customer service is only as good as the payment...you pay slow you get slow service...do you think this is the wrong approuch?


Yep - I reckon it's the wrong approach. I believe in giving the best service you can, or *no* service at all.

If we've already started with collection efforts, you're cut off from further service delivery until the account is paid up or you have made satisfactory payment arrangements with us. Sometimes that *does* mean going out to service and collect at the same time - but you get one chance to play that game if you don't pay as arranged.

I've also found that being quite clear on terms up front saves a lot of this bad /slow paying debt problem.

I'm sure it costs me clients at times, but I really don't think having my good clients subsidising my bad clients is good business.

ps. Nice post, Ann.

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Blurock (18-Jun-12), Nickolai Naydenov (18-Jun-12)

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## AndyD

I've learned the hard way many years ago and regularly dump the habitual bad payers. I'm in the fortunate position of not needing to advertise to be busy and one of the ways I can be good value for money is by not carrying bad payers at the expense of the good ones. I would rather let my business find a natural size than trying to grow it larger on the back of bad payers.

That said I treat all customers as energetically as any other .......up to the point they get the axe at least.

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## Blurock

> I've also found that being quite clear on terms up front saves a lot of this bad /slow paying debt problem.
> 
> I'm sure it costs me clients at times, but I really don't think having my good clients subsidising my bad clients is good business.


Good posts so far. Bad clients can cost you money. Consider the 80/20 principle.

One has to be brutal at times. There is a fine line between wanting the sale and applying the rules. Make the rules clear to everyone, including your own staff and stick to it!   :Chair:

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## IanF

I just submitted a tender were one clause was the "may" pay within 30 days following the month of delivery, with loads of other conditions. I just said conditions are suited to contractors and not printing supply so not accepted. Lets see what happens. I delivered the tender yesterday and still got an order before I delivered it. 
One thing that stood out was the procurement manager had no idea how costing in printing works or what is practical.

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## Ann.J

True. Agreed. For bad payers, A clear action plan should be set out and implemented. Avoid further dealings with them so that the backlog clears and they understand it pay off time or else no more business :Smile:

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## wynn

I have mentioned http://www.getting-paid-system.com/ before

It is a system of sending out reminders by email at certain times of the month before payment is due then more stridently after payment is due, the principal of he who shouts loudest and most often is the first to be heard, seems logical.

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## murdock

i wish it was all that simple...i have a few customers who are slow payer...i wouldnt drop them if they paid me 3-4 months late for some invoices...then you ask why would i be so stupid...the answer is simple...remember i have been operating for over 20 years...some of my slow payers have supported my bussiness for over 15 years(unfortunatly none of my customers have been operating as long as i have)...from building their factories/offices...moving the factories/offices to new locations and general maintenance...when the invoices are large amount then i insist on prompt payment.

today was a good example of a customer who has become a slow payer...becuase of the drop in the economy the demand for their product have dropped...so they have retrenched 70 % of the staff...and are strapped for cash...they call me out today...konowing i am gona battle to get my money on time...i go and service the customer...and you ask why...well when the going was good they supported my company and i made some good money out of them...i dont believe in kicking a person while they are down...in fact even if i have to do a few freebies while they are down...i will try and assist....this doesnt apply to all my customers.

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## Citizen X

"Credit is like black magic, the customer and the money dissapear!"

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## Onetwo

> I have mentioned http://www.getting-paid-system.com/ before
> 
> It is a system of sending out reminders by email at certain times of the month before payment is due then more stridently after payment is due, the principal of he who shouts loudest and most often is the first to be heard, seems logical.


Fully agree.

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## Blurock

> ...konowing i am gona battle to get my money on time...i go and service the customer...and you ask why...well when the going was good they supported my company and i made some good money out of them...i dont believe in kicking a person while they are down...in fact even if i have to do a few freebies while they are down...i will try and assist....this doesnt apply to all my customers.


@Murdock, you have obviously built a relationship with your customers. You know who you can trust and who not. Although a potentially slow payer, at least you know you will be paid. Its important to understand your customer and his business. 

This leads me to an important business principle;
Business rule # 3: Look after your suppliers. Pay them on time. You never know when you may need them.

Business Rule # 112: Loyalty pays.

It is the new and infrequent customers that you have to watch out for. The ones who have exhausted their credit at other suppliers and now want to take you for a ride... :Yes:

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KimH (30-Jun-12)

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## wynn

A customer sent an order to a distributor for a large amount of goods totaling a great deal of money.

The distributor noticed that the previous bill hadn't been paid. The collections manager left a voice-mail for them saying, "We can't ship your new order until you pay for the last one."

The next day the collections manager received a collect phone call, "Please cancel the order. We can't wait that long."

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## Ann.J

Yes i am also aware such practices are involved in a comprehensive bad debt collection system and they are quite effective because many a times the debtors forget the dates they have to make the payments, regular timely reminders facilitate in decreasing the number of bad debts that occur :Smile:

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## Just Gone

I am in the position where I install products.  If you give me a bullshit story or avoid me and dont pay in a specified time, then still dont pay when I try to get hold of you ........... your system will cease to work !

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## Phil Cooper

I have advantage - if you don't pay, your Insurance cover ceases...

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## Ann.J

Well bad debt collection is different from industry to industry. ofcourse you are in a stronger position if your still have a portion of control in your own hands and the clients are dependent upon you, they have to abide by your rules. but for instance you have delivered the services in advance against credit, it becomes difficult to recover the amount quickly

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## Blurock

Strange that business schools teach you all about sales and marketing and maybe some HR, but nothing about how to actually run a business. Credit control is as important as making sales. Making sales are the dreams, getting the money in the till is the reality. :Fence:

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## Ann.J

Business chaolls do provide suggestions and methods on how to recover bad debts.But thats just theory. When your are in practical life, the debtors are not as civil as portrayed in books, they dont neceassarily have to respond the same way to your recovering methods as you expect them to . They might twist the situation entirely such that you had never read in your course. So practical life teaches new things, you meet all different sort of individuals and you must know how to deal with each of them with variation. Its a skill you learn from experience over time :Smile:

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## adrianh

This is all very interesting but what happens when you are on the other side of the fence.When you have to decide whether to pay the school fees or Edgars. I'll tell you this much, $h1t does happen and sometimes money simply doesn't come in. Sometimes, as much as one would like to pay, you are simply unable to. I personally feel that coming to an agreement where the supplier understands your situation and agrees to more suitable terms is the way to go. When somebody harasses me and threatens me it gets my back up to a point where I simply say to them F_U sue me. The point that I am trying to make is that one needs to have an understanding for the position that the other person may find themselves in and further, pushing too hard may lead to your getting nothing other than verbal abuse. The fact of the matter is that you can threaten and make as much noise as you want, there is nothing you can go other than taking the person to court. You might say no that is not so, you could report the person to the credit bureau, thats fine too because the person may not care about getting credit.

It's like dealing with your 5 year old child, you want to coax them into doing something but you also don't want to smack them so hard that they never speak to you again.

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## Blurock

I agree with Adrian, there is a very fine line between getting paid or meeting in court.

That is why relationships are so important. Know your suppliers, treat them well and play open cards with them. Always! You never know when you may have to go to a supplier cap in hand. A supplier will help you if he thinks he can trust you. :Wink:

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## murdock

> I have advantage - if you don't pay, your Insurance cover ceases...



a question for you...what happens if i miss one month payement...but dont miss another payment for the next 6 months...so in thoery i am 1 month behind?

so...one month my debit order doesnt run...but in continue from the next month...and nobody notices including myself...but then 6 months later i put in a claim because my house burns down?

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## murdock

out of all the lesssons i have learnt from experience...getting money out of people is still the biggest challenge...you have to put them in a position that they need soemthing from you to get your money from them...

a tip for the electrical guys...dont hand in the coc to the electricity department...it takes them a couple of months to get a reaction from the metro but no coc they switch off the customers power and you dont have to do it...then let them fight with the metro department...boy does that get interesting...once the company or individual has no power and they are dealing with the metros...boy do they pay quick.

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## Phil Cooper

Hi Murdock

Depends on your Insurer.

99% of them will double-debit you the next month, and bring your policy up to date.

Auto and General just "single debit" you the next month, and it is FOR that month, but you will have had a month without cover. But that is history - does not affect current months' cover.

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Dave A (25-Jun-12)

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## addisonclark12

Customer service is most important part of any business as businesses that are unable to provide proper services for their customers satisfaction then that business stand to lose the revenue as customer service adds value to a product and builds enduring friendship between customers and businesses.

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## Florrience

Yes, as i'm a marketing staff, and always i offer good service to the customers who pay their bills on time and also to the customers who are not so particular and do not have so much complains

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## murdock

> Hi Murdock
> 
> Depends on your Insurer.
> 
> 99% of them will double-debit you the next month, and bring your policy up to date.
> 
> Auto and General just "single debit" you the next month, and it is FOR that month, but you will have had a month without cover. But that is history - does not affect current months' cover.


thanks

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## Kill Joy

it's my personal experience that customer service only  depend on trustful policy so be carefully to business .

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