Hi, my name is Adam Stewart, Debt Collection Expert and owner of ADC Legal Litigation Lawyers.
Many of our clients feel that once an account has entered the debt management process it is time to start terminating the relationship. However, I believe clients can use the debt management process as a great excuse to get closer to your customer.
In good times, you may be able to rely on new customers coming through the door and have no need to worry about customer retention. It is the bad times that you have to worry about. In the good times the market is full of ‘good’ potential customers looking for new credit and the customers that end up in debt management are few and far between. However, as the economy slows down, these ‘good’ customers stop borrowing and so new sales slow and more customers find themselves in the debt management process.
It is during these tough times, that I believe clients should bed down with their customers who may be going through a tough time financially. It is a great way to get to know them, work with them and find out a bit more about what makes them tick, why they use your services, what they may need and how you can assist them in the future.
I will concede that not all customers are worth retaining and so it is important to pick the ones to work with and the ones to let go. Customers who are high risk are likely to re-offend, so it may be best to outsource these debts to a third-party debt collector.
The ones that you want to retain are the ones you want to work with internally, without resorting to a third party agent. The most important value in a customer is not the current value but the potential future value of a customer.
Debt management provides the same role as sales and account management. The debt management process provides clients with a rare opportunity to spend a significant amount of time speaking to their customers on a one-to-one basis. Viewed in this light, debt management provides a wonderful opportunity for long-term relationship building. Make sure your organisation can benefit from this opportunity by having accounts receivable staff that are skilled in customer handling and sales techniques, not just in demanding repayment. In the long-term, investing in staff training should be a priority for every organisation.
Good luck! And remember, if you do need help, please outsource to a debt collection expert, such as Debt Recoveries Australia.
ADC Legal Litigation Lawyers is a legal practice specialising in commercial advice and litigation, debt recovery and insurance claims recovery disputes. For more information, email us at firstname.lastname@example.org or call 1300 799 820. Talk to us about your litigation or dispute concerns via Skype at adclegal.