I was just reading a post by Rangersf that really resonated with me.
It was explaining that the best way to decrease or minimize your B2B aged receivables is by developing relationships with your client and engaging in multiple points of contact with those people in charge of accounts that are starting to age beyond your comfort.
I found this interesting because here we find yet another advantage to community building in an area that is often fraught with polarization and disputes — your Accounts Receivable.
When Schel was started it was because of a clear need for support for companies in their collections before the standard implementation of a third party (which is often only when the account was considered ‘beyond hope’). We gave our clients access to professional and legal support before the account became ‘a dead horse’.
We’ve seen good success in helping our clients reduce their write-offs and the need to litigate. We work with our clients on earlier stages in the A/R process and I’ve had occasion to notice that inconsistent (or minimal) customer relations seem to hallmark the clients who come to us with the most pervasive collection issues.
A great thing that can be seen in consumer, business and pop culture in general, is a backlash to the unrelenting focus that has been placed on efficiency and bottom line, to the exclusion of the most important element of business– people and how they like to be treated; what creates a connection and as a result, a lasting impression.
I love that we are living in a corporate culture where this kind of talk is becoming so common that it’s almost trite. It means that our lexicon is changing. Thank you TED, thank you Seth Godin, and thank you social networking… incidentally, the growth in farmer’s markets could be a good indicator of this movement toward the prioritizing of community on a consumer level.
Online, despite the excess of spammy self-serving self-promotion we see on the net, genuine dialogue and generous sharing of knowledge is the benchmark for worthwhile cyberspace… even marketers like me know this, which is the coolest part- the game has changed and unless you’re bringing something of value to people- even just sincerity and honest dialogue- don’t even bother. Twitter, another example of the shift toward personal contact.
I believe values that were prevalent in times when the world was smaller and we were more dependent on each other are coming to the foreground again in what we demand from our business relationships as well as consumer relations. The pendulum swings. An example of what might be causing this pervasive shift can be found in what has become an icon of corporate disdain for their customer base– Telephone service providers. Service has gotten so cut-throat and impersonal that customer loyalty in this area is extremely hard to come by….I know this because I recently switched providers and the feedback to my inquiries about who I should switch to was unanimous– they all suck.
This article discusses bad debt in North American Telecom, and interestingly, the one company who has seen improvement did so, in part, by combining their Accounts Receivable department with their Customer Care.
It’s much easier to dismiss a debt owed to a faceless conglomerate who treats you as a number- whose huge profits are never shown to give anything back to its customer base except the reduction of human staff and longer wait times… there are those who might even feel justified in forgetting their debt when finally leaving such a company. Not advisable of course, but I wonder what the bottom line in such a scenario might look if the focus was overtly and indisputably on service, client retention and appreciation– I wonder what effect it might have on their Accounts Receivable and bad debt ratio… not to mention new client acquisition and general growth. This is the type of paradigm shifting that Seth Godin likes to talk about and that I love to read about.
So Rangersf’s post about reducing your A/R problems by keeping in touch with your customers really rang true for me– there is no area that will not be positively affected by such a practice. Client care and the health of your receivable department have time and again proved to go hand in hand.
What moves it into the next level is client contact that goes beyond the realm of necessary business communication that’s oriented to a specific goal- even client care calls often have an objective beyond simple appreciation for the client. Getting to know the people that we do business with.
