Magazine article Business Credit

The Importance of Building Relationships to Get Paid

Magazine article Business Credit

The Importance of Building Relationships to Get Paid

Article excerpt

Relationships start the minute you are born; you come into the world and you bond with your mother, father, siblings and other family members.

As we grow, we find ourselves in numerous relationships: teacher/student, coach/athlete, boss/employee and so on. Each of us learns something from these relationships. It may not always be a positive takeaway, but don't we all find ourselves growing somewhat from the bad situations we have experienced in our lives? Remember the adage: "What doesn't kill you makes [sigma] you stronger."

The Merriam-Webster dictionary defines a relationship as "a connection between persons by blood or marriage, an emotional or other connection between people." It continues with my favorite part: "the mutual dealings, connections, or feelings that exist between two parties, people, business relationships or countries."

Think about it: Isn't everything we do based on relationships? Why do we always go to the same place to have our car repaired; why do we go to the same person for years to get a haircut or do our taxes? It's because we have a relationship with them and have built up a mutual trust.

Relationships in Trade Credit

With so much information out there about the importance of relationships in personal decisions, why wouldn't credit professionals also try to use the benefits of strong relationships while performing their jobs?

Many of us in the credit profession spend a lot of time on the phone negotiating with our customers and ultimately collecting payments. How many of you throughout your careers have heard people say, "I could never call anyone for money. I do not know how you do that every day."

However, when you pick up the phone and call customers for money, are you not calling human beings? Do they not have the same needs and wants to establish good relationships in their lives? Why not build on that human need and make an effort to reach out to them and make the call not just about collecting money but about starting a relationship?

It is pretty well known how the corporate process works: Accounts payable (AP) departments have weekly check runs, and the accounts receivable (AR) group is divided up by people who handle certain territories, states, products or customers. Upon finding out who handles your accounts, you make your first call--that is when the relationship starts. That first phone call could (and perhaps should) set the stage for your future relationship.

First Contact

Consider the following example of a collections-type call:

"Hi Cindy, this is Ron from CooperVision and I see you show a balance of $4,500. I also see that $2,500 of this balance is 60 days past due. Do you know when a check will be coming for that amount?" Do you think that is really starting a relationship or is that just your basic collection call?

On the other hand, here is another approach to contact and relationship building: "Hi Cindy, this is Ron from CooperVision. I see you are in Foxhill, SC. Is that close to Columbia or are you close to the ocean?" Or how about: "I saw your state had some major flooding the past few weeks. Was your area impacted? Is everyone you know all right?" Even having never spoken to this person, you are building a base to start a conversation and possibly a relationship. After a few minutes or in another call, I can go back talking about a past-due amount. In summary, the start to a relationship is best when not related to an adverse collections conversation. …

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