Houston, much of Florida, all of Puerto Rico. This has been a hurricane season for the ages. What do you do when, practically overnight, normally prosperous and prompt-paying customers are, at least temporarily, ruined by wind and water? This company shows the way.
Kichler Lighting got lucky this year. Few customers were affected by the hurricanes and even those did not suffer much damage. But back in 2005 when Katrina ravaged New Orleans it was a different story entirely. Several customers lost all or major parts of their businesses to the catastrophic flooding. Kichler pitched in to help immediately.
“First we delayed the due dates on their invoices and worked with them as to what they thought would be an appropriate time frame,” explains David Feigenbaum, CCE, Director of Corporate Credit. No one asked for anything outlandish, so they were all given what they asked for and assured that Kichler would be there ready to help with new shipments whenever they needed them.
One customer had two locations, both in the city. One was totally devastated, to the point where he never reopened it. Consolidating the stores and getting them operational took months. “We just worked with him and told him nothing would be due until he was ready to go,” says Feigenbaum. “The big thing these folks have to go through is insurance claims. They take months.
“We worked with a few customers who were out of business for months, carrying the debt until such time as they were back in business. Then they needed to restock because everything in their inventories was ruined. We worked out special terms to allow them longer payouts on the new goods so that it didn’t come due until they had the chance to sell it and turn it into cash.”
This year Kichler sent out an email to the sales force immediately after the storms in Texas, Florida and Puerto Rico. “We stressed that we wanted to help and did not want to be part of the problem,” he says. “The email stated that if any customers needed assistance they could either call us directly or go through them. On those occasions where we’ve been asked, that’s what we’ve done.”
A few have asked for some time beyond normal terms because their computers are down, but the requests have been few and far between.
“If someone comes to us and says, ‘My inventory is all wet. I need to restock. I’ve got my insurance check but it won’t cover my loss in full’ we’ll work with them to spread it out and make it fit their cash flow,” he says. “The last thing we want to do is have them have a huge bill come due when their cash flow isn’t healthy. All that will do is make a bad situation worse.”
All of Kichler’s customers in New Orleans eventually recovered and are now back to good health. But the city’s population has shrunk considerably. A lot of people left and never came back.
The son of one of the company’s New Orleans customers moved to Houston after Katrina and is now a very significant customer there. “So we ended up with a new customer in a new place,” notes Feigenbaum. “And the really good news is that he’s in a part of Houston that didn’t get hit by Irma.”
Addendum: At press time, just as we were about press “send” on this week’s tip, we learned that Kichler received the following note of appreciation from a customer:
“I wanted to thank you guys for helping us out on our cash flow issues that we’re in due to Harvey. Thankfully all our employees and myself were extremely fortunate in the storm. We had a couple employees that had minor flooding, one with less than an inch and one with about 6” of water. Our office was untouched and the majority of our customers got through it with very little damage. The biggest issue at the moment is the slowdown of business while everyone is getting back on their feet. Our billing was cut in half but we’re hoping it will bounce back in October.
“Again, thank you for everything you guys do for us. It’s never been over looked or gone unappreciated. We will be catching everything up ASAP.”
Hard to buy that kind of goodwill!
Copyright Credit Today Online. Reprinted with permission. www.CreditToday.net.
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