- Subject: Answers to sales or service questions
- Essential Reading: Shop Owner, Center Manager
- Author: Noah Rickun
Q & A with Captain Reman
I get emails each week from dedicated readers looking for answers or help about their sales or service situations. Today, I’ve got a little green Q & A that may relate to your business, your sales or your company right now:
Q: Captain, I have come across a few issues over the last few months and I’m having a hard time drawing a line between good customer service and helping a customer in order to build a relationship. At what point should a charge customer become COD because they are past due on their account?
A: Establish a grace period (no more than 10 days), and explain to your customer that you’re happy to keep selling to them but they will need to pay on delivery for any new orders until the past-due balance is cleared up.
Q: If late fees are charged, do you allow a good customer to waive those fees even though their payment was not on time?
A: Absolutely. Fees suck. I hate paying them. You hate paying them. Let your accounting department keep putting them on the statements and use the late fees as leverage to collect, but be willing to waive them upon receipt of payment in full. You can always say something like, “My finance department is really tough – but I’m sure I can get these waived for you if you pay me by XYZ date.”
Q: When discounts and rebates are tied to timely payment but payment is not made and discounts are taken, how would you address?
A: Call and talk with the customer on a friendly basis. Just explain why you offer discounts for prompt payment and how you feel that you’re being taken advantage of. Depending on how many days past the early pay date they are paying, I may not make such a big deal about it. A day or two is not the end of the world. If they are waiting until the outside due date (like 30 days, for instance) I would call and tell the customer that early pay is early pay. Either they pay early, or they pay in full. You can always threaten to remove the discount from their account altogether. In fact, this is one of the main reasons why I no longer offer discounts by default. I allow them only when asked – and only if I trust the customer enough to play by the rules.
Q: The issue I am running into, especially in this industry compared with others, is that many shops need help financially. While we’re not their personal ATM or line of credit to keep their business alive, without their orders we struggle to hit goals on our end. How would you handle things if a customer stopped paying their bill? What if it went to 90 days past due?
A: I would cut them off at 30 days past due. We would have had to establish some sort of payment plan that we both could live with. And, all other orders until the account is caught up would be COD. This may come as a surprise, but it’s not a sale until the money is in your bank account. If you’re “selling” to an account that won’t be able to pay you, you’re doing a disservice to yourself and your company.
Q: What if you knew one of your customers started buying all of their reman trans from your competitor and bought from you only when others did not have? Would we keep our preferred pricing? At what point and how would this get addressed?
A: Immediately! If you have any type of relationship with your customer you should be there as soon as you catch wind of the switch. Rather than focusing on pulling the preferred pricing, I would look to uncover the reason for the switch. What went wrong? Why did you learn about this after the fact? Were there warning signs? Price or value? Don’t threaten the discount (unless you have a very clearly defined tiered discount program that they signed up for in the first place). Instead, EARN the rest of the business back.
Noah Rickun, aka Captain Reman, is the vice president of sales & distribution at ETE Reman. An aftermarket veteran, Captain Reman is known for sharing his sales, business and customer-service knowledge weekly through the e-newsletter Reman U.