More updates like this from RO-AR.com: Subscribe
Link: Arum
In this discussion, the complexities and importance of addressing the “messy middle” in customer experience are discussed. It highlights the need to understand Johnson Tiles faces challenges with business-to-business debt collection. Customers delay payments for various reasons including cash flow issues, entitlement mentality, and lack of communication. Andy argues that business and personal debt share similarities due to human behavior. He stresses the importance of knowing your customers, open communication, and finding solutions together rather than harsh legal action.
Key Points
- Business to business debt and personal debt share similarities due to human behaviors and biases.
- Customers delay payments for reasons like cash flow issues, entitlement mentality, and lack of communication.
- Communication is important to understand customers’ situations and find solutions together.
- Harsh legal action should be avoided unless necessary as it can increase costs without recovering debt.
- Knowing your customers well is critical for effective debt management.
- Some customers intentionally delay payments to gain cash flow benefits.
- Prompt payment codes are helpful but should be mandatory standards.
- Failure to pay suppliers can threaten business viability and the wider supply chain.
- Culture and background influence how people handle debt.
- There is a need for more open discussion about debt to improve the situation.
Key Takeaways
- Have open communication early with customers who are struggling.
- Offer options and put the decision in their court to choose a solution.
- Treat customers differently based on their behavior and situation.
- Avoid harsh legal action unless necessary to recover costs.
- Get to know your customers well to understand their needs and behaviors.
- Set clear payment terms and policies from the beginning.
- Consider bespoke payment plans for customers who are struggling.
- Prioritize chasing larger debts first.
- Educate directors and managers on the futility of unrecoverable legal costs.
- Have a more open and less stigmatized discussion about debt in society.
RO-AR insider newsletter
Receive notifications of new RO-AR content notifications: Also subscribe here - unsubscribe anytime
