Collecting from Delinquent Customers

One way to avoid letting a customer stretch his payments too far is to ask him what he wants to “pay today.” Often a guy will offer you a larger down payment than you would suggest. Some will even pay for the entire purchase that day. He may have $50 burning a hole in his pocket. If you don’t ask open-ended questions and let your customers make the first offer, you could be creating your own problem.

Make A Collection Hit List

Holsinger says he may have 10 or 20 guys that are a behind. Some are slightly behind, others so far behind that they’re dodging him altogether. His technique is to create a truck dealer’s equivalent of the FBI’s “Most Wanted” list. Call it Holsinger’s “Three Most Delinquent” list. He focuses on collecting from those three customers that week.

“I’ll start by texting them. If they don’t respond, I text them again in an hour. It’s not that hard. I hit resend,” he says. “That works especially well with the younger guys.” He explains he learned this technique from his customers themselves. If they need a tool and he doesn’t reply to their first text, they’ll persist until he does reply.

If he’s trying to meet up with someone who seems to be dodging him, sometimes he’ll run his route backwards for the day so he’s at a stop earlier or later than usual. He then will try to park his truck in a different spot than usual and use a different door. Often by doing this he’ll surprise a customer who seems to otherwise plan his test drives or bathroom breaks to avoid him. When he approaches the dodger, he gets right to the point.

“I’ll be straight with them. I tell them they need to talk to me,” Holsinger says. “Not talking to me isn’t going to make his problem go away. It’s only going to make it worse.” He explains they might be able to work things out, but if the customer keeps avoiding him he’s going to need to take more drastic measures — like taking back his tools.

Be Businesslike, Avoid Blowing Up

It’s important not to take it personally or get upset when someone is behind. Treat it in a firm but businesslike manner. Few, if any, mean it personally. Getting into a shouting match or attacking him personally is only going to push your customer away and make it harder to collect your money. They are likely just feeling financially strapped and don’t know how to deal with the situation. Many will try to ignore the situation and hope it fixes itself. And most owe money to more than just you.

Holsinger says he’s had several customers that he’s even had to repossess tools from that have come back and become good customers over time. He attributes that to his calm, businesslike approach.

“If they really fall behind you need to get back the tools.” says Holsinger. “There’s no other choice.”

Repossessing tools is a very complicated and delicate matter. But that’s a topic for another column.