Small business has many unique attributes, opportunities that are available only because of the size of the business and the accessibility. One of those is that as a business person, you are at times able to conduct business with some of your closest friends and neighbors. You could be doing business with the parents of your child’s soccer teammates or your favorite golf buddy. These relationships are special, as they double in value. They are important to you socially and financially. Therefore, navigating these relationships through more difficult territory (such as collection recovery) can be difficult. However, don’t let your fear of ruining this relationship keep you from pursuing the collection recovery process. Instead, take the necessary precautions in your business relationship to keep your customers from ever trying to use your friendship as an excuse not to pay.
Friends with Customers: Collection Recovery From Those You Know Best
1) Keep the Business and Personal Separate – The easiest way to reiterate to the customer that your business dealings have no reflection on the friendship is to always keep the business and personal separate. When on the phone during the business day, keep the personal chit-chat to a minimum. On the other hand, when you see them out, try to avoid any shop talk. When they see that you clearly approach them differently given each context, they will soon understand what you are trying to establish. As well, if your business structure allows for it, try to assign a different contact person for your friend to work with within your company. If you are not their point of contact for business, it will make it easier for them to establish the separation. Therefore, if you find yourself needing to pursue the collection recovery process with this customer, they will know that it is, simply put, strictly business.
2) No Special Treatment – Set a precedent. Never give your friend any special treatment. Don’t offer them a discount that you aren’t providing other people. Don’t extend lengthier terms just to make them happy. Run them through the same processes as all your other customers. If they understand you are operating with them as you do all your customers, this will help them refrain from an entitled mentality, and never question your authority when it comes to a business matter. As well, it will prevent them from asking for exceptions when it comes to collection recovery.
3) Listen – A practice you should keep up with all your customers, really listening to your business friends will go a miles. Not only do you make them feel like you care, but it helps you get a better idea of where they are with their business and any potential problems they may be encountering. The more advanced notice you can have of these difficult situations, the better you can prepare yourself to handle them. Be completely immersed in what is going on with your customers. A good example is if you find out that a customer may have difficulty paying in the next month. This gives you more time to workout a payment plan and avoid having to go through the more difficult part of the collection recovery process.
4) Communicate Early and Often – Some of the biggest complaints businesses receive from customers is they didn’t feel informed about what is expected of them. Just as you should be an expert listener, you should also be an expert communicator. Nobody likes to feel as if they were taken off guard or that a request came out of nowhere. Sometimes when you have a personal relationship with a customer, you feel you can cut corners or don’t want to bore them with all the information. Don’t let this keep you from constant communication. Even with your friends, keep them entirely informed of your terms and make sure for fact you have reminded them when their payment is due. Sometimes you have to help your customers out, but it will go a long way.
5) Reward- Keep these friends happy customers. Reward them for their loyalty. Operate on the same terms as you do with all your customers. Find a way to say thank you for their business. Not only does this work wonders for all your business relationships, but it gives your friends a special pat on the back they sometimes feel they deserve. Creating a positive, rewarding business environment allows dealing with tough situations, like collection recovery, to be a bit easier.
Collection recovery and other sticky situations are never simple when dealing with friends. However, do yourself a favor and follow the steps above to help strengthen the business relationship you have your friends, adding ease to tougher times.