Paul Wallbank – Brilliant Communications

Tag: customers

  • Beware the business trolls

    Beware the business trolls

    “A psychopath will enter everyone’s lives at one time. When yours arrives, your job is to get them out of your life as quickly as possible.”

    That little gem was handed down to me before the internet gave everyone a global megaphone to entertain themselves with. Today it’s likely a dozen psychopaths a week could enter your life through the web or social media.

    One of the manifestations of this ability for anyone to post to the web regardless of merit or sanity has given rise to the phenomenon of “trolling”, of which there has been much recent media attention.

    At its most basic, trolling is about getting attention. The troll hopes to get a reaction from something outrageous they’ve said or done. In that respect they aren’t too different to radio talk back hosts or SmartCompany editors.

    Business has its own types of trolls: the ‘squeaky wheel’ who hopes that by making a complete pain of themselves you’ll succumb to their unreasonable demands; the perennial tyre kicker who wastes your sales staff’s time; or the late payer who enjoys toying with you and your accounts people but has no intention of ever paying the bill.

    The effects of these business trolls can be just as debilitating as an online troll, with the added bonus that they distract you and your employees from getting work done.

    Sometimes the business owner makes the mistake of taking things personally. This often happens when a bad debtor upsets us so much we make it our life mission to get what we deserve to be paid.

    Hundreds of hours and thousands of dollars later we surrender and accept we were never really going to get that relatively trivial sum.

    The worst of all the business trolls is the recreational debtor. These business psychopaths take delight in ringing up debts they have no intention of paying and then treating your attempts to get the money back as a type of game where they will thoroughly mess with your mind.

    These are the people to get out of your life as quickly as possible. It could be writing off the debt, giving them the refund or just kicking them out of the store.

    So beware of the business trolls, they are as likely to appear in your outstandings file as on your Facebook page.

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  • The creative deadbeat

    The creative deadbeat

    This post originally appeared on the Xero Accounting blog under the title “Sorry, we’re not paying you”.

    “Your star readings were negative after you serviced my computer,” the astrologer said sweetly, “so I’m afraid I will not be paying you.” Then she hung up. It was a good start to the week.

    In business, bad payers are an unfortunate fact of life, one of the redeeming features is most of us end up with a great collection of reasons deadbeat customers give to justify not paying their bills.

    Along with the downright strange is the quasi-legal; “your tax file number is in the wrong format, so we can’t pay your invoice” is one of the better excuses I heard in the years of running my business.

    “I gave your technician a cup of coffee while she was here, so you’ll have to give me a credit” was another great claim.

    A teacher once threatened to report my business to her union on the basis we were exploiting low paid women workers. The funny thing was we’d cut her a big discount because I realised she’d struggle to pay the full rate.

    Big boys’ excuses

    Those excuses were from smaller customers, but the corporate sector can be no better, some of them treat their suppliers as banks who give them an interest free loan

    One multinational suffering cash flow problems decided to pay all bills after 270 days, regardless of the agreed payment terms. They didn’t bother with excuses and their accounts team were blunt – if suppliers didn’t like it, they could sue and wait five years for their money.

    That company had its come-uppance when every supplier in the country put the company on a cash up-front basis to avoid a nine month wait.

    Another big corporation decided to tangle their contractors in knots by implementing an arcane system involving submitting an invoice by the 30th of month one, backing it up with a statement of account by the 20th of month two paying thirty days later. Make a mistake or miss a date and the whole cycle started again.

    Probably the most irritating excuses can come from government departments, a common one being, “our budget has run out for that item, so we can’t pay your invoice until the next financial year. Would you be able to reissue it under a new purchase order for paperclips?”

    Chasing the bad news

    A truism with collecting debts is the longer we let them slide, the less likely it is they will be paid so we have to be on the ball in chasing those late payers.

    In Xero’s accounting software you nominate the due date when creating the invoice and this will appear on the copy the customer receives.

    As soon as the due date has passed without payment, follow up with a reminder or a phone call.

    Whenever you have a slow payer, it’s best to talk to them. Showing you watch our money closely indicates to the customer that you are serious about your bills.

    Identify problem customers

    The good thing about late payments is it’s a pretty reliable guide to who is a bad customer – if they constantly pay bills late, then you don’t need them in your business life and it’s time to get rid of them.

    More insidious is the good client gone bad – a previously good payer who suddenly starts making excuses could be in financial trouble. If so, it’s worthwhile making sure your business isn’t too exposed if that client suddenly goes under.

    At one client the secretary insisted on paying most of our bill out of petty cash. Two weeks later the company, a Scotch whisky broking service, closed shop and left thousands of angry customers and suppliers out of pocket. It took the creditors ten years to get a fraction of their money back and the secretary did us a great favour.

    Not every late payer is a bad guy though, even in the best of times good customers can hit a bad patch so making arrangements with a good customer who has hit a rough patch can be a good long term strategy.

    Incidentally, the astrology lady eventually did pay her bill. Attached was a note explaining something about planets transiting Scorpio during a waxing moon. We never heard from her again.

    At least with bad payers we get to have a laugh at their excuses later, what the best stories you’ve heard from deadbeat customers?

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  • Do you have customers or just users?

    Do you have customers or just users?

    “I was on your mailing list for general info, for spams and scams etc which were helpful. Suddenly it changed and now the business format is not useful to me” said an lady when unsubscribing from one of my newsletter mailing lists.

    The lady concerned had been on one of the mailing lists for over ten years and, once upon a time, had been a paying customer for my old business, PC Rescue. Although we’d only earned a $100 off her and that was seven years ago.

    While it’s sad to lose a subscriber – you don’t run a service business for twelve years without caring about those who use your services – the question is was the lady really a customer?

    This is an important distinction where many of us are giving away much of our knowledge for free; are our users really customers?

    For the social media and web2.0 sites, this is easy; users are the raw material for their aggregated and segmented data feeds and audience, the customers are the advertisers. This is just a modern twist on the broadcast model that sustained the radio and TV industries for most of the 20th Century.

    Many of those social media platforms aren’t making much money from that data and there’s a good argument those who are have been wildly overvalued by investors.

    The value of user data, whether it’s aggregated or identifiable appears to be nowhere as high as most of us think, unless you intend to rob your users’ bank accounts.

    Overvaluation of your customer, or user, database is a common problem for smaller businesses too. If you’re the local plumber, computer repair guy or coffee shop then the value of any mailing list is probably way overstated – the only metric that ultimately matters to the business is how much money you’re making from the customer.

    If you care about the people that you deal with, this may be a hard reality to face but those who visit your shop, subscribe to your newsletter or download your free e-book aren’t your customers, only those who are prepared to pay are.

    This is something we have to understand in this era of abundant free information and online services. The challenge for most of us is how many users we can convert from being window shoppers and freebie seekers into customers.

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