Rule One of Business: Get Paid
To get paid, as you would figure is fundamentally important to your business because if you are not getting paid, what’s the point in business?
You will be surprised at the number of business people who allow their customer base to simply pay when and if they remember it. I know one business owner who always gets bad debts like accolades. For what reason? Just because he won’t bring himself to ask for the cash and people take advantage of him.
If you permit a client credit, only do it because they proved their worth to you by paying cash on delivery (COD) for some period. Secondly, you can check whether they have the cash to pay you - if not do not do business with them. Don’t kid yourself into saying “I need the work” or “I need the sales”. It’s pointless to do the service or providing the goods for nothing if you do not get paid.
If you are the sort of person who can’t demand the cash even after the service has been completed, try these tips:
Tell your client that when all the work is done, you will need cash or cheque. They should probably have it on them at the transacation and you will not need to demand your pay.
When you hand out the quote, make sure your payment terms are plain.
Do up an invoice including your terms of payment simply printed and send the client the invoice when the work is done. They can look at the invoice and simply realise they should pay for it now without you going to say anything. Fabricate a “cruel boss” who might skin you alive if you do not leave with the money for the job.
Set up your bank branch to provide you with Merchant facilities so you can use credit cards like Mastercard and Visa. The majority of people possess credit cards and it will solve the dilemma of the customer not holding a cheque account or not having the right amount of cash in their wallet.
Likewise, don’t be afraid to hold the goods until the payment is made. Understand, until they have been paid for, they still are yours.
If you decide to let someone credit, be sure you take the following contact information of them a week PREVIOUSLY you let them credit.
- Name
- Address
- Phone number
- Bank name and address
- Account no.
- 3 trade references with their names, addresses and phone numbers
After you know all this detail, ring the banking institution and make sure that they operate an account then. Then, call all of the trade reference and ask if they pay their bills on time or if there have been any dilemmas with them.
Most people will be willing to tell you if the person is troublesome. If everything is OK, allow them a moderate level of debt, say no more than $500 (depending on your business). Monitor the operation of the account for a few months before allowing this amount to be exceeded.
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Relationship Marketing Fundamentals
As a customer service concept, relationship marketing is not new. For decades, business-to-business marketers have employed account managers who have the responsibility to dedicate themselves to key clients. In the financial world, `relationship banking’, whereby high-yield customers are assigned a personal manager, has been practised for many years.
When direct marketing is embraced to establish connections or relations between the marketer and the consumer, it is too easy to suggest that all forms of direct marketing communications achieve a closer relationship, a closer bond between the two parties. Such a conclusion exaggerates what generally happens in the marketplace.
Direct marketing is all about generating a direct response from the consumer and about direct communications to the consumer. A direct response is needed to generate better understanding of the advertising message or to motivate transactions. Direct communication is simply about media reach efficiency. Relationship marketing is a concept that transcends these pragmatic direct marketing objectives.
Kotler appropriately positions the concept of relationship marketing as one which applies principally to business-to-business situations:
Smart marketers try to build up long-term, trusting, `win—win’ relationships with customers, distributors, dealers and suppliers. That is accomplished by promising and delivering high quality, good service, and fair prices to the other party over time.
It is accomplished by strengthening the economic, technical, and social ties between members of the two organizations. The two parties grow more trusting, more knowledgeable, and more interested in helping each other. Relationship marketing cuts down on transaction costs and time; in the best cases, transactions move from being negotiated each time to being routinized.
Outside of `membership’ or `continuity’ programs, there are two basic ways to approach consumers. The first is with a product and price combination considered to be `the standard’. That is, the proposition is essentially of long standing and relies on the features and benefits being competitive. The second way, normally of short-term duration, is a `special offer’. Direct marketing textbooks are full of the theory, practice and case histories relating to `the offer’.
The choice of basic propositions or selection of special offers depends on the circumstances of the individual firm and its competitive environment. The right proposition or offer can make a world of difference to response cost-effectiveness.
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