We are taken by surprise sometimes, when an otherwise ‘good’ customer becomes seriously delinquent or we receive bankruptcy notice. With hindsight, we often find that there were signals on which we may have taken some action.
Too late now? Not at all. The philosopher Santayna said, “If we do not learn from our mistakes, we are condemned to repeat them.”
Some tips for you to consider:
- Some signals may appear to be obvious now, but we need to document them and compare to present ‘good’ Customers. It may be that when two or more signals are combined that we want to take some immediate action.
- Determine ‘ahead’ of time, what action should take place. Maybe you lower a credit line or tighten up terms. On the other hand, it may ‘tip’ your Customer over the edge – perhaps you need to meet with them and find a way to keep them and your account healthy!
- Rather than just considering ‘what can I do to reduce or eliminate credit losses’, we should consider ‘what can I do to help’.
- Join an established group via one of the major credit-reporting firms or start one yourself. There is an old saying that “Macy’s doesn’t tell Gimbals”, but that doesn’t apply to credit/collections.
- If there isn’t a group in your area, perhaps you can start one.
- Your ‘front line troops’ may have information that isn’t being passed to where it is needed. In the movie “The Great Escape”, that took place in World War II, a large number of prisoners escaped from a German P.O.W. camp. The Allied Intelligence committee knew a great deal of what was ‘out there’ several miles away, but they didn’t know what the area was like just outside of the camp.An American prisoner (played by the actor Steve McQueen) escaped, researched the area, and then allowed himself to be recaptured so he could share it with his comrades.
Tell your sales representatives that you need them to be your ‘Steve McQueen’! Set up someone (maybe you) with the added responsibility of Credit Intelligence, so that everyone knows where ‘signals’ need to be sent.
Set up a “Steve McQueen” award! Give it once a year to the individual from the front line who brings in the best ‘intelligence’.
Pithy quote of the month:
“To perceive exactly and to connect the things perceived logically is the work of the highest intelligence.”
An original Tim’s Tip from consultant and author Tim Paulsen