Credit management: tailor-made or one-size-fits-all?
Winning the heart of customers – that is what it is increasingly about in these days of growing competition. The arrival of entirely new players on the market is making it tougher to stand out as regards products, services or pricing, for example. Companies are expected to make the difference in another way, that is, through the customer experience. A positive customer experience results in a loyal customer who comes back and who recommends the business to others. In my last blog I already explained that the credit manager also plays a large part in this process and will increasingly have to take the place of the relationship manager. In this blog I will be continuing this theme, and I will show how easy it really is for an organisation to create a positive customer experience. Here is a tip for you: offer tailor-made.
Customer experience depends on the entire organisation
Shaun Smith, one of the gurus of customer experience once said, “The experience you give your customers every day in every contact, direct or indirect, increases or reduces the value of your brand”. That means that every point of contact with a business can influence the customer’s experience – both positively and negatively. Sales and service departments have all the tools they need to attract customers and to retain them by surprising them in a positive way. Yet just one negative experience because of the lack of these tools in the credit management department, for example, can destroy this positive emotion at a stroke. So it is time for organisations to realise that customer experience is everyone’s business and that each customer travels a certain path through the organisation that calls for different communications.
Segmenting and charting risks
Of course it is demanding to continuously adapt policy to the individual wishes of customers, but it is of course possible to study the paths customers take from the point that they place an order until payment. Each path can be turned into a positive customer experience with the use of specialised software. For instance, in credit management there is the customer who always pays his invoices promptly, a customer who has mislaid the invoice just this once in a pile of old letters, or the customer who systematically pays late. All of these different customers demand ‘tailor-made’ communications – not ‘one-size-fits-all’.
Identify who the customer is, their needs and how they like to receive communications – electronically or by post. Once all the necessary information is clear, it is possible to filter and then allocate the filtered information to different segments. Then you can design automatic dunning processes and actions on the basis of this segmentation, the risks, and the amount owed. Communications to a customer who systematically pays late should of course be completely different to those sent to a customer who has missed paying the invoice once. By establishing these processes, the software can ensure that the right ‘tailor-made’ communication is sent to the right customer. Never forget that both customers want a positive experience – and a one-size-fits-all solution is no help with this.
Improving working capital
Naturally credit managers have other goals than ensuring a positive customer experience with automatic processes and communications. They are expected to keep the days sales outstanding and write-offs as low as possible, with the aim of improving working capital. Software can offer possibilities for obtaining a completely-integrated picture of cash flow forecasts and outstanding debts. So a positive experience and fastest possible payment of the invoice are not an either-or.
It does not matter whether it is a message from the sales or service department or from credit management: a positive experience is the responsibility of the entire business. And by investing in the right software for departments such as credit management, they can pay attention to customers – or debtors – from the moment that they place an order and become part of the order-to-cash cycle. With the right software and tailor-made communications I am convinced that you can increase customer retention, reduce DSO and continue to offer customers an optimal service at all times. Whether they are in arrears at the moment or want to buy a new product – make sure in any case that you offer tailor-made and not one-size-fits-all. This way your customers will definitely have a positive experience.
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VP PARTNERS & ALLIANCES