Have you ever stopped to think why some companies are better than others at making payments? Is it that they have better cashflow? Or perhaps rely heavily on your business for the supply of products or services?
Or is it more personal than that? Does the person in charge of payments makes a conscious effort to ensure all suppliers are paid? Perhaps it’s the complete opposite where they don’t care and have no allegiance to you or your business?
When it comes to chasing money, remember that although we are dealing with a business, we are essentially dealing with another human being.
To be successful in cash collection, we need to understand what motivates people to pay.
Individuals will naturally have a good reason to pay. Yet, there are also secondary motives which can prompt people to pay on time. They fall into two categories:
- RATIONAL – this is where people make decisions using logic and reason.
- EMOTIONAL – these are the motives that touch people on a human level.
The two groups can be further broken down as people are influenced in so many different ways.
RATIONAL MOTIVES:
- Money saved / greater benefits – a company gets increased credit limits or avails of special offers
- Health gains – stress levels can be reduced or unnecessary pressure eliminated. This gives people a greater peace of mind.
- Security of the business – this ensures the protection of business, avoiding any legal or financial challenges
- Care and caution – the availability and delivery of further products or services is guaranteed
- Convenience / utility – the knowledge that if we pay now, we will save time and effort later
EMOTIONAL MOTIVES
- A feeling of pride – the payer is seen as reputable. They like being associated with other respected organisations and in building great references too
- Great pleasure – Personal integrity of the individual and a sense of satisfaction being up to date.
- Sentimental reasons – people who value good personal relationships and like to create a better working environment
- Fear and concern – they don’t want to get a bad name or be listed in a credit bureau as a bad payer and then suffer possible restrictions
- Envy of others – they want what other people have – a decent and creditable reputation
- Approval of peers – these individuals like the appreciation from colleagues and suppliers for making the effort to pay, especially in difficult times.
To improve our cash collection skills, we need to be able to recognise which motive will work for different customers. So, next time you are chasing money from a client, stand back and think what might be important to them. Ask appropriate questions to find out what makes them tick. Then try out a few ideas and see which one works best to prompt the other person to pay.