Credit guru Thea Dudley has spent more than 30 years in LBM credit management. Now she’s here to answer your credit and collection questions. Got a question for her mailbag? Contact Thea at theadudley@charter.net
Dear Thea,
I’m a sales rep who wants to know: What is wrong with credit managers? I am constantly getting yelled at or insulted by our company credit manager for any number of things. I asked about selling a customer we haven’t sold in years and she went nuts. A simple “no” would have been enough. Why are you all—or maybe it is just the credit people I have encountered—so bitter and mean?
Tired of it in Terre Haute
Dear Tired:
Oh you poor, simple soul. Your naivete is refreshing and perplexing. Did you just fall off that pumpkin truck? Our perceived jaded, crusty, bitter exterior is built over years of dealing with the worst bits of the building industry. We seem to follow the 80/20 rule, in which 80% of our time is spent as follows:
- Trying to communicate with customers who are dodging us.
- Explaining to a customer that being past due is a “real thing” and that they can’t have more orders until they pay for what they already got.
- Explaining to sales reps why a customer who has filed for bankruptcy is not our first choice for giving a credit line.
- Explaining to sales reps why, even though their potential new customer “has credit everywhere except at our company,” it is not a reason to open someone who almost burnt us and who our competitors would willingly “gift” us (Starbucks gift card thrown in) to take them off their hands.
- Skip tracing, asset searching, and going to court with ex-customers you, my lovely but slightly deluded rep thought were, and I quote, “An awesome guy with tons of potential—he is going to be the next BIG THING;” or my other personal favorite: “This account is a game changer.”
During the other 20% of our time, we get to call customers who deserve a, “Thank you, is there anything we can do for you, we love and appreciate your business!” We produce reports that show which customers are not using their credit line to its potential (and credit loves) so can you please go sell them more. We are producing reports of customers who aren’t purchasing at all but which we at credit really wished they were. They pay outstandingly. Finally, we spend time squeezing in the customer visits, sales ride-alongs, and file reviews into our day to keep the department up to date.
So what if we flipped the script? Suppose I wrote to you.
Dear Tired,
What is wrong with sales people? I am constantly being yelled at and verbally abused by our company sales reps. I ask if there is any customer in the state they could possibly sell something to other then a slow payer with a credit score so low it is a single digit and they go nuts. A simple “maybe” would have sufficed. Why are you all, or maybe it is just the ones I encounter, all so pushy with a short term memory?
See how that plays? It just really depends on what side of the situation on you are on. I get the stereotype of the credit manager named Helen Waite—you know, if you want to get credit here, just go to hell n’ wait. Or the endless jokes about hapless sales reps who lunch all day and play endless rounds of golf while writing checks with their mouths that their butts can’t cash. Everyone thinks everyone else’s job is a cake walk.
I am going to make some assumptions here based on your question. Did you really just walk in, hat in hand, super sweet, and casually ask about a customer? Suddenly the ruthless she-devil otherwise known as the credit queen started shrieking! Perhaps this may be the umpteenth time you have brought this customer up to her after she told you at least the same amount of times that they are not a good risk and COD is the program said customer could have. Could it be she lost her stuffing on this last round?
Maybe I am wrong, you could have done nothing and got that very calloused response. If this is a trend for you and all the CMs you’ve encountered have the same demeanor, it may be, Dear Tired, since you are the common denominator in this story, that the problem is you.
There are really great proactive, collaborative, engaged sales reps in this industry. Then there are the other ones, the “I have one tool in my tool kit” types. Which one are you?
My suggestion is try a different technique. Ask your CM to lunch. I find food (or wine, but since we are talking about lunch, that’s out) greases the wheels for conversation. Spend some time talking about the challenges you are having in your role, the challenges in your customer portfolio and if you can review your entire portfolio with her. Ask what challenges and more importantly, opportunities she can identify. Then work to find solutions and strategies that help you both reduce the frustration and produce a profit.
Nobody’s job is easy. There are challenges up and down the food chain—from purchasing to sales to delivery to collection. Everyone has a role to play, and every one of those roles is just as important and vital to the success of the sale.
The phrase “Garbage in, garbage out” comes to mind. A sale is not a sale until the money is collected, and that collection process starts with opening the account. Get your communication going so you don’t leave your CM to take out the trash.
