Do You Think (and Act) Like a Salesman When Visiting Customers?

A Rather Unusual Approach When Visiting Customers

Editor’s note: The following article originally appeared in Credit Today, the leading publication for the credit professional, a CMA Partner. Click here for Special CMA Member $10 Trial!

On his visits to customer organizations, experienced international credit exec and now consultant Eddy Sumar (ERS Consulting Services) makes it a point to meet as many people as he can — everyone from the receptionist to the president.

“The receptionist, for example, will be my first contact anytime I call that customer,” he explains. “I want her to remember me, so she can facilitate my connection to the right person.”

Sumar also recommends spending time with everyone in the accounts payable process: the person who receives and processes the invoice, the person who signs the check, the person who authorizes release of the check, and so on. “You want to make all of them feel important,” he emphasizes.

As a former accounts payable person himself, Sumar understands what payables people experience. “I always remember wondering why salespeople visited the purchasing people, gave them gifts, and took them to lunch, but never paid attention to us,” he recalls. Sumar feels credit execs should makes it a point to give small gifts of introduction and appreciation to payables people, such as pens or key chains with your company logo, or to take them out to lunch. He has received a number of calls from these people thanking him for these gestures, he says.

More important than the appreciation he receives, however, are the results.

Three Big Benefits

Sumar has also found that personal visits can clear up misunderstandings that might have occurred over the phone. Once, for example, he had the opportunity to visit a customer whose payables person had been very difficult to deal with in the past. “When I visited, we seemed to hit it off almost immediately,” he reports. Following that, she did not default on even one payment, he related.

Another benefit: Many customers, when they are experiencing cash-flow problems, will be much more prone to initiate contact with you if you have taken the time to visit and discuss your problems before they become serious, allowing you to work out appropriate arrangements.

An unexpected benefit is also improved relationships with the sales department. “When salespeople see the value you can provide to an account, it often pays dividends,” he says. “Once, for example, a customer was so impressed with some of the things I was saying that he asked if I’d conduct a seminar for his employees. When the salesperson heard about this, it really strengthened our relationship.” Whether or not you take all the steps Sumar does, it always makes sense to think strategically about how to get the most out of your customer visits – and not to forget anyone involved in the payment process. They’re ALL important.

This article originally appeared in Credit Today, the leading publication for the credit professional.
Click here for Special CMA Member $10 Trial!

International Business — How Understanding Culture Will Help You Get Paid, by Eddy Sumar

When someone signs a contract to do business with your company, you allow them to do so with the expectation that they will pay you. In the U.S., there are laws that help protect your assets to ensure that the contract is enforceable, but what happens when you’re dealing with foreign nations? Are there resources (like the government) that can help when your customer doesn’t pay?

In this global economy, there are ingredients to succeeding in getting paid internationally. One of the key factors that I always recommend to my clients is to make sure you understand the culture of any company you’re selling to overseas. For instance, there are many cultures that have a strong family element to them. In some of those cultures, it is probable that the person who answers the phone is a daughter/son/spouse of the company owner. If that person has a negative experience with you (even if it’s perceived), you may never get to talk to the owner to enforce your contract and get paid.

There are plenty of other resources that can help as well. Join me as we cover this topic in detail at the upcoming CreditScape Fall Summit, September 17-18 at the Tropicana in Las Vegas. For more information about the conference, visit www.creditscapeconference.com. I hope to see you there.

Eddy A. Sumar is the President & Founder of ERS Consulting Services. He is also the director of education and community outreach for CMA, and will be speaking at the upcoming CreditScape Fall Summit. He can be reached at 909-481-9869 or ealberto@aol.com.

Collections in the Digital Age: Technology, Outsourcing, and Compliance, by Eddy Sumar

‘Collections,’ ‘collectors,’ ‘collection agencies,’ ‘collection attorneys’: words that evoke strong emotions, sometimes even terror, in the hearts of uninformed debtors. Robocalls, automatic dialers, dialing for money, calling centers, SMS, texting, e-mailing, invoicing, phone calls, and personal visits—some of the avenues that companies pursue to collect their precious asset known as accounts receivable. When we look at the landscape of debt collection, we can see three things that beckon our attention: technology, outsourcing, and compliance.

These three areas have a great impact on people on all sides, creditors, intermediaries or third parties, and debtors. Let us look at each of these three areas separately.

Technology: Technology is a blessing, but it has side effects. When technology is employed, people lose their jobs. Technology leads to higher productivity at the beginning of the process, but it has long-term negative consequences. Digital technology, machines and robocalls do not satisfy the desires for human interaction. The fact is that technology should enhance the human factor, not diminish it. Technology should help us humans to produce more so we can have more time to interact and build the goodwill and loyalty. So the short-term need is to curb the negative effects of the technological factor in collection.

Outsourcing: Another factor that complicates collection is the outsourcing of debt collection to companies that do not understand the power of customer service and preserving customer and debtor goodwill. The calling-center mentality in collections is unempowered. It follows a certain script and cannot deviate from it. This railroad track mentality usually leads to derailment. The short-term benefits to the bottom-line will ultimately lead to long-term consequences that both eat the top-line and erode the bottom-line.

Compliance: As highlighted in the recent reports from the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB), consumers are being hounded by unethical collectors and unscrupulous collection agencies. These dial for money at all cost, intimidating the debtors with lawsuits and other methods that convey the thought of threatening their livelihood and dignity. To them, it is the money that counts, not the individual. To them, the debtor is totally at fault and they approach the debtor in a manner not fit for human dignity. The result is that the reputation of collectors and the agencies they work for are negatively affected. They become something to fear and avoid. The good news is: the collection industry is still filled with good law-abiding collectors. But unfortunately, it’s the bad apple that corrupts the whole bunch; the little poison that makes the refreshing glass of water on a sweltering day undrinkable. With technology the offense could easily be amplified. Bad collectors tend to hide behind their technological gadgets and screens, thinking that they can never be found in cyberspace. This new digital landscape allows bad collectors to abuse debtors, hurling at them every insult, thinking that the path of offense leads to collection success.

All of the above issues highlight the significance of compliance, which is compliance with existing codes and regulations, but above all compliance with the codes of human decency.

So, how can a company thrive in an environment of constant technological change? How can a company outsource its collection function without affecting the long-term profitability? How can a company be compliant?

The answers lie in a simple acronym: COLLECTOR.

The word ‘COLLECTOR’ embodies certain key qualities that need to be present whether a company pursues internal or external collection. If these qualities are pursued, then compliance issues will disappear. And if a company outsources to a third party to pursue its collection function, then the third party should have strong ethical standards that highlight the human factor. Here is the acronym:

C: Compassion, Connection, Communication, Courtesy, Customer-centric, Common sense

O: Options, Overcoming obstacles, Open-minded

L: Listen! Listen! Listen!

L: Learn! Legally-minded

E: Empathy, Education, Experience, Expertise, Excellence

C: Collaboration, Cooperation, Compliance

T: Teamwork, Targets, Timelines

O: Organization

R: Respect, Resolution, Results, Regulation

The above acronym highlights the human dimension of collection, not the technological and digital. It starts with the ‘C’ of compassion. Yes, collectors should show compassion to the debtor, especially in consumer transactions. Collectors need to connect in order to collect. Making that connection by building rapport is vital. Two-way open communication hallmarked by courtesy is paramount. Furthermore, a customer-centric approach is crucial in every collection call. I believe that collectors should always put on the customer service hat when they engage in collecting a debt. Simply put, it is common sense that should rule in collection.

Next, we see the ‘O,’ that opens the doors to options and alternatives. Collection is not a black and white approach. It should not be either / or. Collectors should work with the debtors to find the options and overcome the obstacles. Collectors should be open-minded throughout the collection process.

The first ‘L’ underlines the significance of listening. The key function for a collector should be to listen—listen to the debtor, listen to the debtor, listen to the debtor, listen to common sense. It is through listening that collectors move to the second ‘L.’

The second ‘L’ is a natural by-product of listening. When collectors listen, they learn, they go beneath the surface to see the unseen and the hidden. When they listen, they find the options that are practical and relevant. And yes, collectors should be legally-minded. They need to know the law, abide by the law and respect the law. Listening leads to the next letter ‘E.’

The ‘E’ reminds us of empathy. And empathy will make the collector’s job more exciting. Empathy humanizes the process; it allows the collector to walk in the debtor’s shoes—to feel, see, and experience the world from the debtor’s perspective and through the debtor’s eyes. Empathy leads to education that equips the collector with the experience that builds the expertise needed to show excellence in handling the collection process.

The next letter ‘C’ puts the spotlight on collaboration and cooperation. I read a quote that says: “If you want to be incrementally better: Be competitive. If you want to be exponentially better: Be cooperative.” So, for collectors to be better, to feel better, and for debtors to be better and feel better, they all need to cooperate and collaborate. Collaboration that reflects all of the previous ingredients will lead to compliance. Ethical and moral collectors that embody humanity and exercise their function with integrity and dignity cannot help but be compliant.

Now, the ‘T’ introduces teamwork that adds the flavor of joint effort and togetherness. When teams come together, they have a goal, a target to achieve. And with targets comes timelines. Thus, the collection process has an objective to collect in a timely manner to ensure the timely cashflow of the creditor while helping the debtor to be released on a timely manner from the burden of debt.

For collectors to really be successful they need the ‘O’ of organization. Organization allows the collector to handle the workflow with ease and proficiency. Organization allows the collector to become efficient and effective.

The final letter ‘R’ reiterates the importance of the human factor. Respect is a human need and collectors should show it at every step in the collection process. In addition to respect, collectors should never forget that collection is about resolution, resolving the issues, dissolving impasses and finding the options that lead to results. All should be done with dignity and decency under the vigilant eye of the law and regulations.

Just imagine collectors who exemplify the above! Collections, collectors will become words that elicit admiration and appreciation.

The human approach in collections will yield greater results than the hard-nosed and hardliner approach. Good, ethical, and law-abiding collectors are guides. They guide their debtors through the collection process leading them to win-win solutions. They steer them in the direction of resolution keeping the goals in sight, while showing understanding and empathy, maintaining initiative, and demonstrating high integrity and strong discipline. They allow themselves to be educated by the process and by the debtor in order to reach the destination without victims and injury.

From the above, we can see that collection is a multi-disciplinary process combining among many things a human approach that reflects knowledge of psychology, anthropology, sociology, negotiation, time management, organizational techniques and a host of functional skills needed in the collection field. To collect is not just about the moment, it is about the future. Though the digital age is here collection will always be a human function.
Eddy A. Sumar is the President & Founder of ERS Consulting Services. He is also the director of education and community outreach for CMA, and will be speaking at the upcoming CreditScape Fall Summit. He can be reached at 909-481-9869 or ealberto@aol.com. 

U.S. International Trade Administration to Offer Educational Resources to CMA Members

Credit Management Association® announced that it has entered into a strategic partnership with the International Trade Administration (ITA) of the U.S. Department of Commerce (DOC). The Memorandum of Agreement (MOA), titled the “U.S. Trade and Investment Expansion Partnership,” will help credit and risk management professionals gain access to educational resources needed to expand their businesses nationally and globally.

The agreement, which represents a relationship between CMA and the U.S. Department of Commerce, will promote international trade to CMA’s members by increasing awareness of the economic benefits of exporting, and educating them on trade activities as a job creation and growth strategy. As part of the agreement, CMA will work with the DOC to increase trade and business investment awareness among the U.S. business community, emphasizing the small- and medium-sized businesses that make up CMA.

Through this program, CMA and the DOC will jointly develop a series of educational webinars on topics such as the importance of trade and business investment and associated benefits to the economy, export and business investment opportunities, and ITA’s role in opening foreign markets to U.S. exporters. Additionally, this partnership creates the platform to engage in a dialog between CMA and the DOC. The program expands upon the resources of another CMA-sponsored service, the Global Trade Credit Consortium, which offers assistance for companies that sell internationally by providing access to letters of credit, international collections, banking resources, credit insurance, international credit reports and education and training.

“In this global economy, CMA is constantly evaluating which programs and services it offers that will help our members the most,” said CMA President Mike Mitchell. “Participation in this project furthers CMA’s programs such as the Global Trade Credit Consortium which encourages the economic growth of its members and other small and medium-sized businesses, and gives them access to some high-powered government resources on these topics. CMA is helping its members to better understand how to navigate and effectively compete in a global marketplace.”

“The function of the ITA is that it strengthens the competitiveness of U.S. industry, promotes trade and investment, and ensures fair trade through the rigorous enforcement of U.S. trade laws and agreements. ITA works to improve the global business environment and helps U.S. organizations compete at home and abroad,” said Eddy Sumar, CMA Director of Educational Services. “The goals of this U.S. Trade and Investment expansion partnership are to increase the economic benefits of trade; educate the public on trade activities as a job creation and growth strategy; to create general awareness of ITA and other government resources, and encourage U.S. businesses interested in exporting and foreign businesses interested in investing in the United States to seek the assistance of ITA. I can’t wait to announce some of the great training programs that we have planned.”

“In the coming months, CMA members will be reading more about these developments via CMA’s social media sites, blog, newsletter and other communications. I am very excited about the growth possibilities of this program,” Sumar added.

These educational sessions will complement the nearly 100 annual seminars, webinars, courses, conferences and training sessions that CMA offers. For details on other offerings, visit www.creditmanagementassociation.org/events.

Master of the Matrix, Master of the Cs

The entry level CMA webinar, “The Art of Credit Management,” presented
by Eddy Sumar, MBA, CCE, CICE, of ERS Consulting Services, was aimed at
providing the groundwork for success for credit department members. In it, he
discussed his theory of the 18 basic “Cs” of credit, the credit matrix and
creating a fundamental checklist that every credit professional should keep in
mind.

“I really believe, as credit professionals, we are artists,” said Sumar.
“That’s why credit management isn’t a science, it’s an art.”

The first step in Sumar’s process was to look at the word itself. Credit is
defined as a cooperative function between seller and buyer, or between creditor
and debtor, that is based on agreed upon terms and mutual trust for both parties
to deliver on their promises.

“This is how we define credit in the traditional way,” explained Sumar. “But
in order to become masters of our destinies and masterful at the art of credit
management, we need to redefine credit.”

He explained that credit is a sales tool and a marketing tool, and needs to
be recognized as four-dimensional as a financial vehicle and as a strategic
alliance. By looking at credit as possessing those four functions, he explained
that it creates a better understanding of the connections between the credit
executive, the credit department, the customer and the company.

“My motto is that as a credit person, I should be sales sensitive,” explained
Sumar. “Likewise, a sales person should be credit sensitive.”

He said that the primary objective of a credit executive is to understand the
vision of the company for which they work for, then figure out if there is a
vision for the credit department. Credit professionals must understand the
company’s culture as well, and its policies and procedures.

“It’s imperative, to be successful at credit, to understand the vision of the
company,” said Sumar. “You’ll be surprised by what credit extensions you offer
and all the credit offerings that you have. They are linked—directly or
indirectly—to the vision of that company and to where the company wants to go.
By understanding the vision of the company, you will create and carve a vision
for your department.”

Sumar’s credit matrix is a simple, fundamental chart with four quadrants:
“Able and Willing,” “Able and Unwilling,” “Unable and Willing” and “Unable and
Unwilling.” The purpose of the matrix is to help credit executives and sales
people to make quick decisions on a customer.

“Now, I think this is a very crucial matrix because it is going to tell me,
how do I follow the lead? Where do I concentrate my efforts?” explained Sumar.
“Let’s say I am a sales person, credit person, or a collector. Where do I want
to target? I always recommend to go from Able/Willing to Willing/Unable.”

“Ability and willingness ultimately fall onto character,” added Sumar.
“That’s why I always say become a master of the matrix, because the matrix helps
you classify your customers as to character.”