That’s Not Intimidating to Me – Michael Dennis, CBF

That’s Not Intimidating To Me

My father was an NCO in the British Army.  When I was growing up, if you were easily intimidated, you didn’t get a lot to eat at the free-for-all that we called meal-times…. So I am not easily intimidated.

Delinquent debtors frequently use intimidation as a negotiation tactic.  Often it takes this form; the debtor says:  “If you don’t release the order(s) pending, we will take our business elsewhere.  When we are asked why, we will be sure to list you and your behavior as the primary reason for the decision to move to a competitor.”

I was invited to take a trip to visit a local customer to discuss the status of their past due account and to review the status of orders on hold.  When I arrived, I was escorted into the main conference room in which six or more of the debtor company’s executives waited for me.  After the introductions, the debtor company President told me:

·         The decision to place their account on hold was “a serious mistake”
·         He said he “could not imagine” what I was thinking at the time
·         Their account was one that should never be placed on credit hold
·         He told me the orders I held needed to be released immediately, and that doing so would benefit his company and my employer
·         He expected an immediate affirmative response – meaning the orders on hold would ship no later than the next day
·         Once the goods were received, they would open a dialogue with me about a mutually beneficial debt repayment plan

The debtor company President told me that this was my last and best chance to remedy the problem, and make amends for my past errors.  He said he was prepared to call my company President, but preferred to work things out with me rather than pointing the blame at me.  My response was to request 24 hours to make a decision.  The decision was actually already made.  I would consider releasing the orders on hold if and when the past due balance was paid in full.

The debtor called my company President within two hours of my meeting.  By the time he called, I had already provided my boss and through her, the company President, with an update.  As a result, the debtor had no bargaining power, only threats.

Michael Dennis, MBA, CBF, LCM

Does intimidation work?  Yes.  It is a popular negotiation strategy.  It is especially effective if the credit manager is not certain their decision is fully supported and/or supportable.  If you are confident that you understand your company’s tolerance for credit risk, then customers’ attempts to intimidate you to influence your credit decision-making is unlikely to work.

That’s my opinion.  What is yours?

Michael Dennis’ Covering Credit Commentary. Michael’s website is

The opinions presented are those of the author.  The opinions and recommendations do not necessarily reflect the views of CMA, or their Officers and Directors.  Readers are encouraged to evaluate any suggestions or recommendations made, and accept and adopt only those concepts that make sense to them.

5 Replies to “That’s Not Intimidating to Me – Michael Dennis, CBF”

  1. While working in the forest products industry, a customer sent in a credit application completely lacking in any particulars, financial data, or anything more than a signature. The applicant company was a small firm and relatively new in the industry, but had no lack of arrogance, as I found out when I called for more particulars.

    The owner immediately went on the attack when I told him I needed more information to reach a credit decision, demanding to know why I needed to be told who else he did business with, and what business of mine his financials were, and so on. I responded that his company was newly opened, and we needed to make sure that he had credit history, and wasn’t going to order product, then close his doors (as had happened with other small companies in the petroleum industry, my prior industry).

    He said he was outraged, and said he would only give me what I was asking for if *we* would provide the same to him, including financials! I rang off, promising to call him back within the day. Speaking to our controller, I confirmed that we did not provide such information (which I already knew, but used the opportunity to advise Finance of the issues with this applicant). I then advised Sales I would be rejecting the credit application, for lack of sufficient credit history.

    Calling the customer back, I informed him calmly that we could not open his account because he wasn’t willing to provide routine data on how he paid his bills, his financial position, and so forth, then invited him to build a history with us by starting on a strict COD basis until we got to know his firm better. He hung up.

    Postscript: He reportedly attempted this tactic with others in my credit industry group, unsuccessfully. About six months later, Sales advised he had closed his doors.

  2. In my experience, the more arrogant and loud a present past-due debtor/applicant yells; or the harder they push back is in direct correlation to their dire financial circumstance.

  3. The problem with bullies is they have LEARNED that it is a successful tactic and assume that everyone will be intimidated, so they use it easily. If you allow that behavior to work for them early on, then you will be continually subjected to it.

    It’s not unreasonable to expect some kind of immediate “proposal” for payment before relenting. “I’m sorry to hear you feel that way, but I need some kind of payment plan before I can see about getting the order(s) released” is my typical comeback.

    Both of you mention “delayed decisions”, I think that is an excellent response! (let them cool their jets)

  4. I completely agree with Deb. The louder the bark, the less substance to back them up. While this may be an effective negotiating tool in the animal kingdom, we (humans) have opposable thumbs and the ability to reason. In the end “cooler heads will prevail.” I am sharing this with my department.


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