To your customers, you (and Sales) are the company. Do they find you responsive to their needs, considerate of their problems, and generally easy to do business with? If not, many (and certainly the best) of them could easily wind up doing business with your competitors.

Intool Inc. (Houston, Texas) manufactures and sells pneumatic tools for use in industrial assembly and fabrication applications. Approximately 60% of its sales are to distributors. The other 40% are directly to end users, many of whom are auto and aircraft manufacturers.

Editor's Note: This article originally appeared in the Credit & Collection Manager's Letter, which Credit Today purchased in 2006.

"It's the nature of our business that customer service is absolutely vital to success," emphasizes Carolyn Pavlovsky, CCE, corporate credit manager. "In fact, we think of the credit department as a customer service function. We have more direct contact with customers than any other department in the company, with the exception of Sales. That gives us plenty of opportunities to represent our company and the products and services it sells. Our goal is to handle every customer in as professional a manner as possible."

Intool's emphasis on customer service attitudes and behaviors in credit and collections has a two-fold benefit:

1. Proactive, streamlined credit extension has been one of the factors that has powered the company's consistent growth in the last few years.

2. Positive customer relations have also improved DSO. "If we stopped doing what we're doing in the area of customer service, I estimate that our DSO would increase by about 10 days," states Pavlovsky.

Service Strategies
Pavlovsky set the stage for the credit service emphasis when she came to the company by working long and hard to move the credit department out of the accounting function. What she wanted was the opportunity to work directly with the sales and customer service departments. "We are no longer part of accounting," she says. "We report directly to the controller."

Early on, she also created a procedure for researching and processing credit applications in a timely manner so that customers would not have to wait and so that the company could move ahead aggressively with its sales strategy. "We have a huge influx of new credit applications, so we try to keep up with these," she says. "This is not to say that we approve every account for open terms, but we work to find acceptable terms for us and the customer, such as 1/2 prior to shipment, credit card, cash in advance, or C.O.D. If we didn't, we could potentially lose a lot of new business."

Virtually all of her other strategies revolve around how she communicates with customers during all phases of the relationship. She shares some of the key points:

• Always be honest with customers, and expect them to be honest with you.

• Whether on the phone or in person, give your full and undivided attention to the customer.

• Be consistent and true to your word. If you promise to do something or follow up on something for the customer, do so within the time frame promised.

• Whenever possible, fax (rather than mail) information to customers to emphasize the importance you place on timely response.

• Return phone calls ASAP. "This not only shows the customer that you care about them, but gives you the edge in the conversation," she explains. That is, if you place the return call, you can do so when you are prepared to discuss the issue. If, on the other hand, you wait for the customer to call back, you will be caught off guard, and you'll be dealing with a customer who is angry at having to call twice.

• Gather personal information about customer contacts, such as accounts payable people.

• Find out the likes and dislikes of accounts payables people. For example, do they like to receive information by phone or by fax? "Some like to get everything by fax unless it's an emergency, in which case they prefer you to use the phone," she notes.

• Adopt the philosophy that "The customer is always right, unless we have actual documentation that suggests otherwise." Example: "If a customer claims not to have received a delivery, we will honor that claim unless we have a proof-of-delivery document in our hands," she says.

• Create policies and procedures as guidelines, not as rigid rules. "Be flexible," suggests Pavlovsky.

• Choose your "battles" carefully. "Some discrepancies with customers are so minor that it is not worth the time to pursue them or the risk of lost goodwill," she explains. "Weigh the evidence, the amount involved, the estimated time involved to resolve the problem, and the consequences. Then decide if it is worth pursuing."

• When you strike a deal with a customer (e.g., a workout payment plan), follow up with the details of the agreed-upon deal in writing (fax or letter) to eliminate potential problems in the future related to misunderstandings.

• Never adopt a "That's not my job" mentality when a customer calls, even if what they want is not your job. "When a customer hears, 'That's not my job,' it's a real turnoff, especially when they're having problems that cause them to call in the first place," she explains. "As such, if a customer calls about something that we don't handle, we pass it on to the proper department and then promise the customer that either we or someone else will get back to them."

• Take the time to compliment good-paying customers. "Don't dwell on the negatives of collections," she says. "There are enugh negative terms in credit as it is--delinquency, slow pay, bad debt, and so on. We like to turn the terminology around to the positive, such as percent of receivables current. Whenever customers consistently pay in a timely manner, we either call or fax our appreciation." Along the same lines, Pavlovsky sends company pins with "Thank You" imprinted on them to payables clerks who help resolve problems or send out checks before the end of the month.

• Make personal visits whenever possible. As time permits, Pavlovsky visits customers to reaffirm her company's service commitment to them, pick up financial statements (which some customers only provide in person), tour the facility, and see how the products are used.

• Finally, match customers to the right people. "If I ever find that I don't get along especially well with a customer, I'll arrange for my assistant to handle that relationship," says Pavlovsky. "The concept can work in reverse, too, where I occasionally handle some of her customers."

Editor's Note: The above article originally appeared in the Credit & Collection Manager's Letter, a newsletter purchased by Credit Today in 2006. This article appeared originally prior to 2000.

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