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 am writing to you to comment on a recent column that you responded to a question about sales reps always knowing more then credit and knowing the customer better. I have that same issue. I am tired of hearing about how much money everyone has and what my competition is doing and how no matter what I say, what solution or insight I offer, I am wrong. They have more to add. By the time I get done talking with them, it would appear I am the least informed person in the company. What I really want to say to them is, “Do you all really think I am this dumb?”
Signed, Dumbfounded in the Dakotas
Dear Dumbfounded,
Do you ever wonder what a credit manager karaoke night would sound like? I believe the song lineup would go something like this:
- “Lips are Movin'” by Meghan Trainor
- “We Are Never Ever Getting Back Together” by Taylor Swift
- “Little Lies” by Fleetwood Mac
- “Another One Bites the Dust” by Queen
- Pretty much any man-hating song by Miranda Lambert. Just change out the no-good, cheating ex-boyfriend for no-paying customers
- “Someday” by Mariah Carey
- “Since U Been Gone” by Kelly Clarkson
- And bringing it all home with a rousing rendition of “Money for Nothing” by Dire Straits
I have all of you fellow dumb-founders to thank for the following cacophony of treasures uttered by sales reps around the country:
- Our competition gave him a million dollar credit line – no questions asked.
- Financials? What do you think this is, Wall Street? They are contractors!
- I don’t want you to call the customer, you will offend them. They are sensitive.
- You called the customer and now he is all pissed off. He doesn’t know what you want.
- I don’t think you understand who this guy is. He is a big deal.
- I know this guy really well. He is loaded and pays his bills like a slot machine.
- He has unlimited credit everywhere but here. You offended him with your crappy $15,000 credit line.
- He really doesn’t need to buy from us, since his current supplier is meeting all his needs, but he is giving us a shot and you’re messing it up for us.
- He is in the mafia.
- The family owns a TON of property; they are loaded.
- I don’t know where you’re from, but this is how business is done here. You just don’t understand.
- Let me explain the industry to you, sweetheart.
- Credit application? Why do you need to get another one? They said they filled it out once and they “ain’t doing it again.”
There were more, mostly variations on the sampling of the above, but in the interest of remembering this a column and not War and Peace, we are stopping there. Let’s systematically break that down to what credit managers hear when those sales lips are moving. I will try to group them by theme:
Million dollar, unsubstantiated credit lines: Most credit mangers in this industry know someone who works in our competition’s credit department or knows somebody who knows a credit manager that works for our competition. We know they don’t hand out million dollar credit lines like flight attendants hand out pretzel packs: to any extended hand that wants one. I am sure the customer believes he has unlimited credit because he doesn’t see the mental gymnastics that credit manager goes through to keep orders going out the door. Everyone has a credit limit: Warren Buffet, Jimmy Buffet, and Bob the Builder all have credit limits.
Millionaires and family wealth: I have never heard of as many millionaires, land barons, and wealthy families with unlimited credit as I do in this industry. They are everywhere. Everywhere that is but on paper. On paper? Nothing! I can’t locate a money trail. It’s probably because I don’t know who he is. He could buy his materials anywhere, but he needs a major credit line, and he needs it yesterday, and I am the one weak link in this gravy train that is messing it up for our company. Well if it walks like duck and talks like a duck, that squatty little sucker is most likely waddling over to poop all over my aging.
Family owning multiple properties: Starting the first cattle ranch, paper mill, brewery, or banana farm is outstanding, albeit useless, information. Just because the customer’s family has some cash doesn’t mean they are going to use it to bail out Skippy the Wonder Contractor. I wouldn’t let some of my family members use my bathroom let alone pay off their debts.
Financials: Yes, I ask. I didn’t ask for a unicorn and I don’t ask for the financials for a $5,000 credit line. But, if a customer is seeking $100K or up, I am asking. While I am at it, I would like to point out calling the customer is part of my job. I am calling if I need to. If a customer is that sensitive, I am not sure what to tell you. I am sensitive, too. I cry when I think about not knowing enough about the customer, extending a credit line, and then having to explain big losses to our president all by myself. By the way, if the contractor called me instead of you, sales buddy, he would know what I wanted.
Credit applications: Credit applications don’t last forever. Things change. We are the equivalent of a bank. If a customer takes product from us and doesn’t hand over payment at the exchange, then we are their banker. If I need a credit app, work with me! This process isn’t fun for me either.
Slot machine metaphor: I have never understood that phrase. I have news for you: casinos aren’t built by winners. I have played slot machines and they don’t pay that often or that well. While we are talking about casinos, let’s talk about that mafia comment. They of all groups understand the concept of paying your debt on time. I am not asking for a thumb here, just some finance charges.
It is a never-ending source of fascination, amazement, and frustration to me that many (not all) sales folks have the same repertoire of “go-to” phrases. These phrases usually set credit people off on a tangent because those same phrases, uttered unabashedly and with complete conviction, by said sales rogue sound ridiculous to us credit managers and are completely unsubstantiated. So, when we repeat the expressions back to our keeper-of-the-faith sales rep, we expect them to find those phrases just as mildly entertaining and thoroughly improbable as we do. Unfortunately, they don’t see the humor and can’t understand why we are not taking their valuable information and acting upon it.
So is the nature of the beast of credit and sales. Hey, maybe that is THE song for credit karaoke night: “Tale as old as time, still the same old lines, credit and sales lies.” (Yes, you do have to sing it, preferably in your head, to the tune of “Beauty and the Beast”)
