Credit Management and Marketing – it’s all relative
Credit managers should take a page out of their marketing colleagues’ book as there is a lot to be gained from profiling in financial processes too.
It used to be that segmenting and profiling was purely exclusive to the marketing departments of the world. However, as technology has naturally grown and evolved, so has this perception. Anyone who still holds on to the belief that these tools are limited only to marketing departments is very much out of date with the latest methods of credit management.
As recent trends have shown across practically every sector, there is no longer a ‘one size fits all’ approach to credit management. Whilst we may all be using the same software and hardware, they need to be intelligently tailored to each environment. One vital requirement is the need for information; specifically customer information. Most credit departments will outsource this, pulling in expertly compiled reports that analyse and assess a business’s or individual’s financial health. Although, one huge area of information that is commonly overlooked is the data that these departments record on a daily basis. For example, as individuals communicate differently with each company they speak to, your customers will be doing the same with you, showing completely different behaviours with you than they do with other businesses. Are you truly making the most of that information?
Information at your fingertips
All of the information you need is right at your fingertips. The next challenge is to leverage that to your advantage. A simple way to start this is by using factors such as business size, industry, location, purchasing habits and creditworthiness to differentiate your client portfolio into a set of homogeneous groups. From here you can then piece together a strategy which will enable faster payments from each group. By splitting your portfolio like this, you can quickly identify which customers may need extra attention and which do not, further increasing results across your entire client base.
No matter the product delivery, each process involved, from marketing to sales will all conclude at credit management. If you disrupt the generic communication here from the traditional one-way, reactive approach and change this to a more positive, two-way dialogue, it is far more likely that your customer will order again. This further proves that those involved in your credit department need to know as much as they can about the customer so as to provide an individual service style that will not only help your customer but help your company.
By taking advantage of these existing marketing tools, you will better understand your customers and achieve a more accurate future view of your company’s finances.