Clint Maxwell, an Independent out of Texas, is like most other distributors when asked what he most dislikes about the job: collections. While only 10 percent of the customers give him problems in this area, that 10 percent is enough to threaten his profitability. About 5 percent of the customers have to be reminded to pay and another 5 percent have to be chased.
One technique that has helped with collections is a "used and repo" bin placed prominently on one of his shelves. These are mainly tools that have been repossessed and sell at discount. "Guys pay attention," he says. He cites this as one of the most effective techniques he's used for getting paid.
For the 5 percent of customers who have to be reminded to pay, Maxwell tries to find out why they can't pay. Having been laid off himself, he empathizes with people in financial straits.
If a customer has made some payments but can't stay current, he credits the customer based on prior payments.
For those who skip, Maxwell follows a plan. If someone owes him money and doesn't return phone calls or emails, he visits them at home. He gets home addresses from drivers' licenses, which he requires of all customers.
He also uses social media to find information about delinquent payers. "Facebook has been valuable because people put so much information on it," he says."People put all their information out there on the street."
"The easiest way to make sure you get paid is call their mother," he says. "Guys don't want to look bad, especially to their mother."
He also visits spouses at work to pass the message along. "No one (spouse) wants to be married to a loser," he says.
Maxwell says it's important not to invest too much emotional energy in skips. "You do your best to chase them down, but you don't get consumed by it," he says. "It will eat you." This, in turn, will affect how you treat other customers.
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Tips on how to not let customers push payments to a future time.