While binge watching Game of Thrones, I heard over and over and again, “A Lannister always pays their debts.” All I could think of was not "Roman Lannister" (name changed to protect the guilty!)
One morning early, before my first cup of coffee, I was calling bills that belonged to my client whom we will affectionately refer to as Dr. Do Little. When Mr. Lannister answered the phone, I explained I was calling on behalf of Dr. Do Little about the debt he owed for Fido. Mr. Lannister informed me that he, too, had not had his first cup of coffee and he wasn’t going to pay the bill. When I inquired as to why not, he said the Dr. had done little and explained he had brought the dog in after a car accident and poor Fido had died, and If I didn’t believe him, he would dig him up, bring him in and show me! As tempting as this was, I declined!
Yes, even the Lannisters make excuse after excuse for not paying who they owe. Unfortunately, this leaves the business owner with a pocket full of nothing! One might ask what then is the business owner to do when customers make excuses for not paying? Our first instinct is, “Off with their head” however, normally that doesn’t work. One must keep their cool. The situation is already explosive and approaching your customer like a modern-day gladiator is only going to make it worse. So, what then can be done?
First and foremost, one must figure out why the debtor is not paying the bill. Having this information often determines the difference between getting paid and not getting paid. Keep in mind that on average, you won’t hear the real reason the customer will not pay you until the 3rd excuse. Just listen to the first two without much response and wait for the third one. I have found that just about 100% of the time there are only 3 real excuses.
1. The client doesn’t have the money 2. The client is not happy with your services 3. The customer has the money but wants to spend it on something else! (A true ‘off with the head moment!’)
How do you determine if the customer truly is in category 1? Does he talk to you? Does he reach out to you before you reach out to him? Does he ask for an extension and keep the promise date that you two agreed upon? Does he answer the phone when you call? If this is true of your customer, he is a category one and will pay you. Work with this customer and not only will you get your money, but you will always have this client as a customer. No collection agency needed here.
Category 2. What if the client truly wasn’t happy with your service? What you need to do first is figure out if your customer truly wasn’t happy or if he is just masquerading as a 2 but has the soul of a 3. There is one simple test you can use to determine this. Did your customer tell you immediately that he wasn’t happy with your work, was he able to explain why and did he give you an opportunity to fix the problem. If he did then he wasn’t happy and if you can redo the work and make him happy then you will get paid and you will always have this client as a customer. No collection agency needed here.
Flip side of the coin however - Did the customer only tell you he was not satisfied when the bill came due? Were his expectations unreasonable (like saving Fido), did he give you no chance to make it right? If these things are true, then he is masquerading as a 2 but he is really a 3! Don’t even attempt to spend more time and money to satisfy this customer, turn him over to collections.
Category 3. The client who has the money but wants to buy something else with it! With this client time is of the essence. Make no deals or no payment arrangements. You must get your money before he gives it to Walmart. Do not hold these accounts long if you cannot collect them yourself. Turn him over to the professionals before the trail goes cold.
When I repeated back to Mr. Lannister exactly what he had told me he realized quickly just how stupid his excuse sounded. We made an agreement to leave poor Fido in the ground but throw Dr. Do little a bone!