Improving the Effectiveness of Customer Visits

By Michael C. Dennis

One technique that can be useful in business-to-business debt collection is the personal visit by the credit manager to a delinquent customer. A customer visit can expedite the collection of past-due balances while maintaining a more amicable working relationship.

To make these visits more effective, it is essential for credit managers to establish clear expectations in advance of the scheduled meeting. This proactive approach helps outline the purpose of the visit, the key individuals to meet, and the issues that need to be addressed and resolved.

Customer visits can sometimes become challenging and uncomfortable, occasionally escalating into confrontations, even when that was not the credit manager's best intentions. For instance, a customer may express their inability to pay the promised amount or refuse to provide previously agreed-upon information, such as current financial statements. Consequently, credit professionals may need to adapt their goals and approach in real-time during this type of customer visits.

The benefits or advantages of these visits include:

• Personal visits can provide insights into the customer's business operations that cannot be gleaned from the outside.
• Credit professionals can establish better rapport with customers, which can foster better communication and understanding.
• Visits often result in expedited payments, as they emphasize the importance of resolving any outstanding payment related issues promptly.
• It is easier to request financial statements or other sensitive documents during a face-to-face meeting, and customers are less likely to refuse such requests in person.

While customer visits can be time-consuming and costly, they offer a wealth of unique information about the customer's risks, often in the form of unfiltered data directly from the customer. By remaining observant and asking pointed questions, credit professionals can gather valuable insights, including:

• Assessing the customer's long-term stability.
• Identifying other creditors extending credit based on inventory observations.
• Learning about the customer's business property ownership, tenure, and workforce.
• Evaluating the company's organization, management, and equipment.
• Gauging the demand for the company's products and its future prospects.
• Inquiring about the customer's credit requirements and future plans.
• Gathering information on the customer's problems, and prospects.
• Requesting current financial statements.

When considering the cost of sending credit managers for customer visits, it's essential to pose the question: "Can the creditor company afford NOT to send credit pros to meet with customers from time-to-time?"

These visits offer a unique opportunity to address disputes, resolve problems, collect past due balances, gather valuable information, and strengthen customer relationships, making personal visits useful and important.