Every month I receive a variety of questions from salespeople and their managers. These come from a variety of sources - my live seminars, the monthly phone seminars, questions that are sent into my newsletter, and issues that arise in the course of my consulting work. Out of all of these, I select those that I think have the most universal application, and respond to them here.
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How do you deal with a difficult customer who owes you money and constantly draws you out by hanging the money he owes you over your head? This customer also requires three times more service then most of our other customers.
It sounds like this customer is taking advantage of you. I suspect that this is not a profitable customer -- you are probably losing money on him.
Let's try to sort this out. First, I'm not sure why you are involved in worrying about the money he owes you. I believe that a salesperson ought to help run interference for the company when it comes to collecting money. I also believe that a salesperson has the responsibility to not sell to accounts that he/she knows are in financial difficulty. Having said that, it appears to me, in this situation, that the money he owes you doesn't sound like a sales issue. Your company's management, specifically the credit department, ought to have a series of policies and procedures to address these kinds of issues. This customer certainly should have some terms within which he is expected to pay, as well as a credit limit. Those are credit issues, not sales issues.
It's really pretty simple from your perspective. If he's over the credit limit, you can't sell him. If he's under, you can. It should be pretty black and white. So, just don't get into a conversation regarding the money. Refer it to your company's financial and credit management.
The "three times more service than other customers" is really the issue. The real question is this: Is it wise for you to invest that much time in this customer?
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The practical answer has to do with your own personal situation. If you have extra time, and the time you invest in this customer is not time that you could be investing in someone else, then it is probably worth it. Better a difficult customer than no customer. Better some sales than no sales.
If, however, the time that you spend with this customer is time that you could be spending with other, more profitable customers, then you have a conflict.
This calls for a process I call "demoting some customers." It requires you to make cold-blooded business decisions about the future potential of a given customer, and then to use that objective analysis to change the amount of time you spend on a customer.
I've described this process in several other places. If you want to read about it, review: Chapter 9 of my book, 10 Secrets of Time Management for Salespeople. It's also described in one of my web seminars which you can take at any time. Just call 800.331.1287 to make those arrangements.
It may be that, because of this customer's slow payment and exceptional service demands, it is not wise for you to continue to deal with this customer. There is nothing that says you have to sell to everyone on their terms. It may be best for you to move on and invest your sales times in other customers.
So, bottom line is this. Make some cold-blooded business decisions about whether this customer is worth the time you are investing in him. Don't be afraid to cut him off, if that is the decision you come to.
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If you have any comments or questions, email them to me.
I do, of course, reserve the right to edit
Here are a few articles by Dave
that you might be interested in reading:
What's the Best Way to Find a Good Salesperson... Good question! It seems that everyone has a favorite response. Some people only use recruiters, and others swear by networking. But classified ads continue to be the most common choice. Almost everyone who hires salespeople will, at some time, search for prospects via the "help wanted" section.... {Read More}
Is it Time to Revise Your Sales Compensation Plan?... If you're paying your sales reps straight commission, you're using an obsolete formula. If you're paying your sales reps a straight salary, you're also using an obsolete formula. Read this article to find out a much more effective way to compensate your sales staff.... {Read More}
How to Deal with the Salesperson Who Has Leveled Off... Every manager has, or will, confront this troublesome issue. Itīs arisen in every workshop for sales managers or branch managers Iīve done. One or more of your salespeople has leveled off. Their performance hasnīt improved much in the last few years. Where before you were able to count on significant increases each year, now you can not. You know that these experienced salespeople can do better, but they seem unable or unwilling to break out of a certain level of performance. You are scratching your head, frustrated, and loosing sleep at night wondering how to improve the situation. What do you do?... {Read More}
There are also many other action-packed articles for sales professionals that offer how-to solutions to every day sales problems that you can read online at www.davekahle.com/article.htm.
