Getting paid your due

Nothing is more frustrating than delivering a product or service and not seeing any money from your customers. Don’t they realize that you’re running a business! You’ve got mouths to feed. You’ve got bills to pay. You’d love to get your money.

Debt collection for small business is tricky: In many cases, you may not earn enough per customer to qualify for any kind of legal action. Even then, it might not be worth your time to collect. If you do earn enough from a customer to make it worth your effort to collect, the global nature of our business world, combined with laws that are a little toothless, don’t make it easy.

The best defense is a good offense, or so I’m told. So the two things you should do first is:

• Collect up-front from everyone. Some people won’t like it and will go somewhere else but most people (especially those who were expecting to pay anyway) will be okay with it. If a new customer isn’t sure that they can trust you, consider using an escrow service. If you can’t collect everything up front (perhaps because you bill by the hour and don’t know how many hours you’re going to work), collect a security deposit first.
• Set up a system. Create a system that has you sending out pre-written collections letters or making collections phone calls on specific dates (or some other trigger) from time to time. A collections system will rarely prompt the deadbeats to pay, but it’s useful for those good people who just simply forgot.

Here’s a great article about debt collection for a small business. It’s from New Zealand (so it there isn’t an across-the-board application of what has been written) but it’s still worth reading. It doesn’t address many of the collection problems that freelancers and entrepreneurs face if their dollar amounts are too low but it can help a small business owner in circumstances where they are owed a considerable amount. Read it here.

Jessica Routier, IAC-EZ

Customer service: Expense or Investment?

When I was a kid, my parents needed a washer and dryer and they saw a set advertised so they bought it. It turned out not to be very good and they had a terrible time trying to get the company to service the products. But my parents had little recourse, besides haranguing the manufacturers. I was just thinking about their experience the other day and then comparing it to my own: Recently, I spent a lot of money on a new furnace for my home. The furnace is generally pretty good but there was a service issue that should have been fixed right away and wasn’t. I called and called and called. When the company finally responded, they sent several “specialists” out, none of whom could fix the problem, and every visit was scheduled for one day but the specialist came a day or two late. Unlike my parents, though, I don’t have to just “tough out” the situation and hope for that my constant phone calls would help. Instead, I can go online to my personal or professional network of thousands and I can make one single tweet or wall post or blog. And? The problem gets solved right away. 

Customer service has shifted yet again. Customer service used to not exist at all. Then, it was its own department – just a guy with a phone. Then it became trendy to call the sales staff “customer service” (even though they did mostly selling and almost no back-end support service). Today, lots of businesses claim to have great customer service but  really don’t.

The reason, as suggested in this excellent (but slightly older) post by Freshbooks, there is no clear and obvious ROI in customer service. Rather, the Sales department has clear metrics – sold products or not – but “happy customers” is ethereal at best. So, because companies can’t easily quantify the customer service experience, the customer service department (or skillset) is often the first thing to go. 

Unfortunately, that’s a mistake. A business may not easily be able to quantify customer service with obvious and conventional metrics, but the results of customer service are clear. If you ask me, I think customer service metrics can be found in the following places:

• Customer retention
• Long term profitability
• Ratio of positive-to-negative statements on social networking sites

How can your business make an investment into customer service? Here are a few ideas:

• If you can’t afford to hire someone new, train your staff to watch for negative customer service signs and – this is huge – empower them to address those signs immediately.
• Run frequent searches on various social networking sites for references to your company. For example, use HootSuite or Tweetdeck to keep a search running for the name of your company (along with various misspellings) to see what people are saying.
• Google the name of your company plus the words “hate” or “sucks” and see what comes up. While you may not be able to address every concern of a vocal minority, it’s a good way to see where some potential common problems are.

 Jessicca Routier, IAC-EZ