Because of the current economic recession, it’s getting increasingly difficult to get people to pay invoices on time. But, getting clients or business affiliates to pay what they owe you is a necessary task for any small business owner. I sat down with Nick Middleton, ChooseWhat.com’s own affiliate manager, who came up with these five simple steps for getting people to pay you what they owe.
Step 1: Email the most appropriate representative.
- Always start by emailing the guilty party (person or company) to make sure they know they have missed a payment. Unlike a phone call, an email shows a time stamp, who received it, and written details of the complaint. You can use your email marketing service to give you statistics like open time, click throughs, etc. A written record of your complaint is handy, as you will always have a start date to refer back to when communicating (e.g. “John, you’ve owed me $1,000 since the 13th…it’s now the 20th and rent is about to be due. What have you been doing for the last 7 days?”).
- Ask for the name of the most appropriate person to speak with about this issue. This helps expedite the process, as well as gives you a name and face to which you can direct all future communication. When you email the person in charge of payments, explain your situation calmly and tactfully and emphasize their responsibility to fulfill their obligation to you and your business. You want them to recognize not only that Company A owes Company B money, but also that John owes Nick $1,000.
- Give them at the most one business day to respond to your email before moving to Step 2. Don’t go any longer without communication; you want them to take you seriously, after all.
Step 2: Call the most appropriate representative.
- If they didn’t respond to your email, then call the person in charge of payments. Don’t assume that they read your email. It’s very possible that they overlooked the email or casually glanced at it and didn’t give it much thought. (People sometimes disregard emails, especially ones asking for money.) Remind them that you sent an email, but also be prepared to reiterate what you said in the email over the phone.
- Make sure that the person you’re speaking with understands the problem and is willing to rectify it. Chances are that they might play dumb or genuinely not understand what has happened. If they do not agree to pay you in the phone call (or if you couldn’t reach them by phone at all) tell them (or leave a message explaining) that you will follow up with an email with detailed statistics and evidence supporting your case and move to Step 3.
Step 3: Email the guilty party, supervisors and co-workers with detailed and specific evidence.
- Try to put any invoices, statistics or evidence you have inside the body of the email, instead of in an attachment. If you include a list of attachments with your email, chances are that nobody will read them. The more detailed and specific you are, the better. Again, show them that you are serious, as well as extremely knowledgeable about what happened.
- CC any and all parties who may be even remotely involved in the process. State how long this problem has been going on and the steps you’ve taken to come to a resolution. Your contact person is now not only responsible to you, but also to any supervisors or colleagues who are copied on the email. Include the person’s boss, secretary, co-workers, or any other relevant contacts you have. Also include your own boss and/or your co-workers on the email, so your contact person knows you are acting on the part of the company, and that your company as a whole is frustrated with your contact’s irresponsibility.
Step 4: Agree to the forthcoming phone call.
- 80% of the time your contact will try and set up a phone call with you to apologize and save face. They’re doing this because they now know that X number of people are scrutinizing them, and they don’t want to get fired. Accept the phone call, but be sure that everyone knows the objective(s) of the call before you sit down and hash it all out. You want to know why they haven’t paid you yet and what they are going to do to resolve things.
Step 5: Be firm.
- Before you sit down and discuss things with your contact,come up with a list of action items (read: consequences). Plan out what you will do (or won’t do) if they do not agree to pay you what you’re owed. Be prepared for a response one way or the other. If they agree to pay you, come up with ways to make sure that something like this doesn’t happen again.
- Always aim for the win-win. If the person who owes you money is being obstinate, try not to get mad. Just remind them (and yourself) that you rely on one another and you would like to continue your business relationship. It’s more effective to sound disappointed in someone, rather than get angry. But don’t let them walk all over you either. If you’re firm and stand your ground, they are likely to agree to your terms. After they’ve paid you, be sure to thank your contact as well as any people involved for helping to resolve the issue quickly and fairly.
So, now you’re an expert at persuading people to pay you. But can you persuade people to buy from you?