Credit Matters Blog

Whilst You Were Sleeping What Did You Lose?

Kim Radok 17 December 2014


When your business focus is primarily on new and preferred customers to the exclusion of existing customers, you are doomed to lose a number of existing customers for no good reason. Operating a successful business requires being awake to what is going on with your existing customers so you do not lose sales and customers which could otherwise have been retained.

Repeatedly we see the same stories and excuses on how and why existing customers and sales were lost because the business was asleep to the business dangers and possibilities within their customer list.

So how are sales and customers lost?

The answer to the above question is very simple. Your business personnel did not engage properly with your existing customers. I would suggest, many business people do not demonstrate an understanding on the importance of customer file maintenance and on communication with their customers. Furthermore the ethos behind every form of communication whether it is for customer-file maintenance or day to day issues, is about completing an existing sale or ensuring future sales.

The objective of the contact maybe about an another business issue, for instance enquiring whether "X" still works there, for a late payment, or with an answer to an enquiry etc. The concept of actually making a sales call is probably not foremost in people's mind. Consequently  the person's attitude may affect how they deal with the customer. Too often therefore, the "sales ethos" is missing during the contact and an opportunity is lost to positively reinforce the supplier-customer relationship.

If we were to list the most serious examples of not engaging with your customers they would include, but are not exclusive to the following issues.

1  Not talking with "small sales dollar customers" about the possibility of selling more because of the prejudices of lazy sales managers and personnel.

2  Not identifying the customer is no longer a "small dollar sales" entity.

3  The ownership of the customer's business has changed, however you are unaware of this change.

4  Credit claims / invoice deductions increase and nobody asks the sales team or the customer why the increase has occurred.

5  Sales are dropping, but no-one asks the customer why.

6  Good buying customers taking extra days to pay because nobody talks to them about improving the payment terms or are scared to approach the customer in case they take their business elsewhere.

7  Customers that buy big from each supplier in turn and are slow payers whilst still deemed to be "good customers". This customer has factored in being placed on "Stop Supply" occasionally by any one supplier as part of their business plan to buy on extended terms.

Which customers are we talking about?

1  The smaller dollar valued customer which pays their account on time.

2  The smaller dollar valued customer is constantly late in paying so the standard procedure is to just place them on stop credit until they pay.

3  Sales slowdown or cease altogether from a customer which was formerly a good purchaser.

4  The customer owned or managed by a person of doubtful integrity.

5   The customer which has not purchased anything for over 12 months.

In many business enterprises today, the key to survival and success is deemed to be focused on gaining new sales from preferred or new customers. Meanwhile other business matters which require on-going attention can be left until later when time permits. The thought behind this strategy is; a few mistakes can soon be covered by the increased sales, and the net outcome will be positive.

Unfortunately, the business process is not that simple. Those few mistakes may not be hidden or covered by a few extra sales. In fact, as we continue to see, just a few mistakes can be extremely damaging to the welfare of the business. Therefore, no business owner or manager can be caught out being asleep at the wheel of business anymore. You need to be awake to all the perils of the modern business world and ensure you have not taken your existing customers for granted.