Tuesday, November 3, 2015

Why Is It So Hard To Collect Money From Your Customers?

Why Is It So Hard To Collect Money From Customers?
On more than one opportunity I’ve shared with you in this blog my opinions about why it is important for every entrepreneur to learn how to sell its products and services, in despite of the fact that sooner or later it will end up delegating such tasks in a sales team or a commercial director, in the best cases.

But thanks to the very kind comment from my dear friend José Luis Del Campo, I realized that I had left aside an issue that could even be as important to develop as the ability to sell, and it is to be able to collect money you are charging customers for your products or services.

Because even though it’s true you really need to have the ability to bring in money, it’s useless to produce all that money if we can’t collect it or, even worse, if we can’t even get them to pay for it.

And this is most likely a problem that can translate into three different scenarios:

  • You’re embarrassed by collecting the money you're asking for your work.
  • Your client doesn’t believe your work is worth the money you’re asking for.
  • Your client doesn’t have the money to pay, either because he’s tight-fisted by nature, someone who simply doesn’t like to pay, or wants to get it all for free.

You must learn to find out when a customer is not appropriate for you.

I'll start with the last one because it’s the easiest one to solve: those customers who do not have the money to pay the price you ask for what you’re selling, or are some of those who like to be coaxed to release the little money they owe you or, in the worst case scenario, are the kind of customers who want to get it all for free.

And I say that it’s the easier one to solve because for this kind of customers there is quite a simple answer: "I don’t want to continue working with you," although you can come up with the words you like the best, or make up a more polite and less frontal way to deliver the same message.

There is nothing wrong with letting a bad paying customer go to work with another supplier.

Why the answer has to be so upfront and straightforward? Because in the medium and long term, these customers end up becoming a waste of your time and an unnecessary waste of energy, both for you and your team.

Remember that during the process of prospecting new clients, there are two key elements which allow you to consider a customer represents an interesting opportunity for your business: The customer has a visible need your product completely satisfies and, the most important element of all, customer has the money to pay the price you’re asking for your product.

No matter how early you wake up, the sun won’t be doing it earlier. And if the customer doesn’t have the money to pay the price you’re asking for your product, no matter how hard you try to sell him into the benefits of your offer, the money is not there and it will become the objection you’ll always stumble upon when your customer tells you "Sorry, I don’t have the money to make a decision."

There is something else you might want to consider.

Every sales process is a relationship between equals where no one is above anyone.

And this will help you give proper answer to the second situation in which you're in front of a customer who doesn’t value the offer you made, therefore, doesn’t think it’s worth the money you're asking for.

If we get back to the beginning of the whole sales process, your customer has a need your product satisfies way more than enough, therefore, there is an exchange of real and obvious benefits: Your customer wins because with your help it will solve a problem it has, and you also win because you’ll get paid some money to provide your customer with a solution to their problem.

When there is a clear value proposition, well understood by your customer, money is rarely a problem.

The problem occurs when you really haven’t looked at the situation from this point of view, or you haven’t made your customer understand it clearly. That is why he does not understand why you're asking the money you’re asking for: He hasn’t seen the concrete benefits he’ll receive from your offer.

That is why, during any sales process, you must make all necessary efforts to establish clearly your added value proposal, ie, the reasons why your client should consider your product as the option to choose to solve his problem, instead of all other providers who are also bidding.

Last but not least, your time and knowledge are also worth it.

If your product or services are able to solve a major problem your customer has, why you should not get paid for it? If you are really adding value to your customer’s life or business, what is the problem that, in exchange for your assistance, you receive money?

If it comes to a product you're selling, think of all the time it took to create it and develop it. Is it really a product of so little value that you must give it for free to your customer? Then why does it make you feel uncomfortable to ask money for it?

Is it really a product of so little value that you must give it away for free to your customer?

And when it comes to selling your professional services, then what do you have to say about all the time invested in training yourself to gain all the skills and knowledge you now have, in order to be able to offer your services the way you do?

Is it worth your time so little as to give it away just like that, even though in exchange of your time and effort, your customer is efficiently solving a problem it has?

That’s why we consider of vital importance during the sales process, that your client clearly understands what your value proposition is and the benefits it will receive after buying your product or hiring your services.

Only then your customer will understand that it’s really worth paying the money you ask for, and even more.

And for those who do not have the money to afford it, or even make you get down on your knees to collect what they owe you, you already know what the answer is.

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