You would think that reducing credit comes down to getting paid. Contrary to popular belief/opinion, controlling the amount of credit you give to your customers is not about money. It’s about something else. Sometimes the reason plumbers leave too many invoices out and open for their customers is due to feeling sorry for them. It’s true. Sometimes plumber employ sympathy, when they should be employing empathy.
This is one of the mistake many plumbers make with credit. Here is an illustration of the difference.
Sympathy – You can understand to a certain extent; but, you have never been there personally.
Empathy – You have been there yourself, so you know what it feels like.
If plumbers had more of an understanding of these two things, there would be less credit. Now, let’s take a look at a few other things.
Saying No to the Customer
This is a tough one for plumbers. Some plumbers happen to be very weak. Customers can sense this. They can also use this to their advantage. Plumbers need to learn the “art of saying no.”
What is the main reason for not saying no? It’s becomes more personal than anything. It’s usually not about the money, as I stated above. It’s usually a personal emotion that gets in the way.
People Don’t Like No
This is so true. Some customers will even turn on the water works. They do this only to take advantage of the circumstances. Most of the time the customer can pay, why else would you have been called out. These customers do not want their plumbers to know this.
You will get this with even your most reliable customers. Some feel that if they know their plumbers, he/she will extend their credit. This is not always the best option to use. Best friends even take advantage of one another at times. The same logic applies here.
How will it look if you say no? How will your customers feel about you if you say no? These are probably the thoughts that run through every plumber’s mind.
What the Manual Says and What Really Happens
Almost every manual out there would have you believe that customers will be “understanding” of this. This is complete nonsense. What actually happens is something completely different. There have been customers who have thrown tantrum for not having their credit extended. Their have been complaints filed against plumbers for this happening.
Not all customers are nice and understanding. Sometimes you have to use your best judgement for the situation. Does this question/statement sound familiar?
Do you mind if I pay you after the delivery is made?
Delivery is made. Payment is made too. Ever notice how it’s only a small amount? This happens a great deal. Then the customer will say to put in “on their tab.” Have you ever noticed something. The tab is growing and their payment is not coming down.
Customers do Not Like to be Chased
Credit chasing is one method plumbers use to get their money back on open and extended invoices. Well, customers do not like this either. They take this method personally. If you haven’t already picked up on it, the relationship is very one-sided.
These are the normal responses plumbers will hear?
1)The person who takes care of it is away.
2)I’ve just been so busy over the last few weeks. I promise, the money will come tomorrow.
3)Can you give me just a little bit more time
If you haven’t noticed already, these are also excuses. Plumbers hear these on a regular basis. These excuses are another reason why a plumber should never be so considerate with the credit.
Customers Aren’t Organised
This is another excuse plumbers will hear. The worst part is, many pf them buy into it. The customer will make it out to be the plumber’s fault and personalize it.
This one is for the all the plumbers doing business out there. If a client can not pay in-full when he/she is supposed to, do not extend the credit. It’s going to hurt your business. All of the above are reasons how some plumbers have gotten cheated in the past by clients. Do not let this happen to you.
No matter what the manual says, credit is not a good thing. Invoices will be out-of-control. Too many sloppy mistakes. Only employ the credit extension if there is an emergency. If there is an emergency, get proof from the client beforehand.
My hope is that this article helped some of you out today. Please do not be afraid to tell a customer no. You might lose a client or two because of this; but, your bottom line will be more secure. James run Doran Plumbing and Heating in Dublin.