Magazine article Business Credit

A Customer Service Approach

Magazine article Business Credit

A Customer Service Approach

Article excerpt

Editor's Note: In 1993, Business Credit ran a story about credit's changing role in business. Now that credit has established itself in the financial decision-making process, the ante has been raised. Two years ago, Katherine Jeschke asked, "Where will it all lead?" Now, Glenda Selby gives some answers.

The credit manager's job description varies widely from company to company and from industry to industry. Even so, in my meetings with other credit professionals, I have found that one problem seems common to all of us. How do we convince our sales forces to view credit as an ally rather than as an adversary?

Have you heard credit departments jokingly referred to as "sales prevention departments?" You're not alone. It is often difficult to overcome this negativity masked as humor. Some companies figure a name change can help things (i.e. changing the credit department's name to Customer Financial Services). A name change alone, though, will have no impact unless the department is an accurate reflection of its new title and is truly a service center.

Several years ago, my credit department was suffering from poor morale and high turnover, and absentee rates were the main symptoms. It was difficult for me to identify a cause for the malaise. My staff had great relationships with our customers; the employees were well-paid and well-qualified. They even claimed to like working with me and for the company. The department was performing extremely well in the areas of DSO and bad-debt percentage, and our executive management was very pleased with our performance. The only problem I could find was a complaint that came from several staff members who perceived negative feelings from the sales department.

I realized that in my efforts to meet the quantitative goals of the corporation, I had neglected to set goals for meeting the needs of the employees. DSO and bad debt percentage are important measures, but when used alone as incentives, they can create goal contacts for credit personnel and contribute to a strained credit/sales relationship.

In 1992, I began developing a plan to target reasons for the negative perceptions. Did we, in fact, have performance shortfalls in our service to staffers, or were their perceptions based upon poor communication?

To accomplish my goal, I used a four-step process which integrated several principles espoused by quality professionals.

1. Determine what sales expects from credit.

2. Determine how well we meet their expectations.

3. Establish performance standards based on customer expectations.

4. Establish a reward system based upon meeting performance standards.

Determine Expectations

The most difficult aspect of this process was deciding how to determine what the sales force expected from us. I knew from customer service training that if you ask for input from customers, you must be willing to act upon it. And I wondered if the sales department's expectations were realistic. I came across a book, Delivering Quality Service, which helped to answer my questions. The book was based on an extensive research study by Valarie Zeithaml, A. Parasuraman and Leonard Berry that led to SERVQUAL, a customer service survey that breaks service quality down into five key areas:

Tangibles

Reliability

Responsiveness

Assurance

Empathy

The survey instrument, which deals in generalities rather than specifics, is divided into two categories. One set of surveys is completed by the customer and one set is completed by your own staff.

With some minor adjustments, we were able to adapt the survey to our needs and sent it out to our inside and outside sales staff members. They were asked to rate their expectations of an "excellent credit department" on a scale of one to six. The next step was to rank the five key areas in order of importance. In the final section, they were to rate our credit department using the same questions and scale that they had used to rate their expectations. …

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