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Getting More From Your Customer
We are all customers of one product or another. How is it we always seem to buy or shop from the same place? What is it that these businesses do to keep us coming back and buying from them? A large portion of the selection process that a customer...
Home-Based Business Start-Up: 7 Tips For Lowering Your Fear Factor
Instead of thinking about your start-up fears, let's focus on something more interesting like; free home-based business opportunities, and free advertising. This new thinking will greatly increase your confidence in being the boss.
By Bruce...
Maximise your compound interest, FREE mortgage quote
Compound interest is the very method that finance companies have made their money for many decades. However at last competition from a booming worldwide economy has forced the industry to give consumers a better deal.
Compound interest in a...
Sit Customer Sit - "How did customers get so trained?"
“I need that shipped overnight!” “I need that delivered today!” “Drop it off to me on your way home?” “I do not want to pay a Restocking charge!” Do these all sound familiar? I‘d be willing to bet you can come up with a book full of the things...
Some ways to have Customer Acquisition
As you know, the customer acquisition is the marketing goal of
acquiring new customers; selling products to people who were not
already customers. Customer acquisition and retention are the
most important things for almost every company. However,...
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Small Business Q&A: How To Handle Customer Billing Snafus
Q: I just discovered that for the past six months I have been billing a client half of what I should have been. Should I just include the total of the past due balance on his next bill or contact him first to let him know that it's coming? This client has been difficult in the past, so I'd rather not deal with him until I absolutely have to. My partner, on the other hand, thinks we should call the client and let him know what's going on before sending the bill. What do you think? -- Louis K.
A: I think your partner is right. If you think this client has been difficult to deal with in the past just wait until he opens your bill with six months worth of arrears attached to it without prior notice or a full explanation of the amount owed.
Sending such a bill is like dropping a bomb on the client's desk, and I guarantee you the fallout from the resulting explosion would end up landing squarely on your head.
So the question then becomes, how do you collect money that is rightfully owed to you from a client who has a history of being difficult? That's easy, Louis. You make your partner call him.
Seriously, whether the client owes you the money or not is a moot point. Yes, you made an accounting mistake, but if the client agreed to pay you a certain amount each month in exchange for certain services rendered, and you have been under-billing that client for delivering those certain services, the client owes you the money, period.
I have found that in situations like this it is always best to be proactive and face the problem (or what you perceive as a potential problem) as quickly as possible. This will save you hours of needless worry since most of the time the problem is not as big a deal as you imagined it to be.
There can only be three outcomes in this situation.
(1) The client will understand and pay you without argument.
(2) He will argue the point, forcing you to offer a compromise plan.
Or (3) He will flatly refuse to pay, forcing you to decide how far you're willing to go to collect what is owed. You should be prepared for either occurrence before getting face-to-face with the client. Remember this: In a business negotiation, he who is prepared the least gives up the most.
With that in mind, here's how I would handle the situation.
Arrange to meet the client in person. This is much better than trying to explain the situation over the phone because most people (including myself) tend to only give half of their attention when on the phone. The other half is usually focused on things going on around them while they're on the phone.
Once you're in front of the client, downplay the fact that an error
was made (since the error did not negatively affect the service the client received). You might even poke fun at yourself over the situation (if the client has a sense of humor, that is). You should then politely ask if he would prefer to have the unbilled balance included on his next invoice or submitted as a separate invoice.
Then close your mouth, smile, and wait for him to respond.
You'll notice that you did not give him the option of not paying the bill, nor did you give him a point of contention to argue over. He should get the message that it goes without saying that he owes the money and needs to pay the bill, but being the wonderful person that you are, you are willing to let him decide how you should be paid.
I'm willing to bet that the client will choose option A or B and that will be the end of that. If this client has been difficult to deal with in the past, he may argue that since the mistake was yours, he shouldn't have to pay the bill. This is, of course, a BS argument (and I don't mean Bachelor of Science), but one that some clients might make just to get out of writing you a check.
As mentioned earlier, you should have prepared for this possibility before going in. If your business can survive without collecting the unpaid balance and you really want to maintain a relationship with this client, you should be prepared to offer a compromise that lets the relationship continue.
Without appearing to be caving under the pressure (this is the hard part) look the client dead in the eye and say, "Mr. Client, since I value your business and the billing mistakes were indeed mine, I'm willing to forego collection on the unpaid balance and start billing the correct amount with your next invoice, which, by the way, I happen to have right here…"
Granted, in this situation you are not going to collect on the past balance, but you are establishing the rules of the game for the future and you might even improve your relationship with this client. The money you forfeit today could lead to an increase in referrals, testimonials, and repeat business tomorrow.
Here's to your success.
Tim Knox tim@dropshipwholesale.net For information on starting your own online or eBay business, visit http://www.dropshipwholesale.net
About the Author
Tim Knox as the president and CEO of two successful technology companies: B2Secure Inc., a Web-based hiring management software company; and Digital Graphiti Inc., a software development company. Tim is also the founder of dropshipwholesale.net, an ebusiness dedicated to the success of online entrepreneurs. http://www.dropshipwholesale.net http://www.smallbusinessqa.com
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