Depending on the franchise business you own and operate, there are different ways to approach payment recovery. The way you would handle a retail customer is not the same as the way you would handle a 30-day net customer account. If your customer base is in the hundreds, or even thousands, it becomes more challenging to devise a system that can resolve every unpaid bill or account.
But, the secret to getting the money that you’re owed is not in the method but the approach. As a small business, you can neither afford to hire collection agencies to chase after your unpaid accounts or sour customer relations. In management, your goal is to satisfy “the greater good” – and that mean’s getting as much of your money as possible without damaging any of your relations with these customers. And that means developing a system.
Here are some suggestions that could improve the payment recovery process:
1) Be Sympathetic
One of the things credit collectors rarely do is express any sympathy towards your reluctance to pay your debts. As a franchisee you cannot embrace that persona. If you know the customer who hasn’t paid, you should make an effort to find out why and make yourself seem caring enough to get an explanation for the late payment. Leaving a phone message with, “I hope everything is ok,” can go a long way to at least getting some feedback from your customer. Most customers will be too ashamed to show up at your business and give you a reason. You’ll never know for sure why the customer hasn’t paid until you ask.
2) Call to Announce a Promotion, Then Ask for Your Money
This approach goes one step beyond sympathy by avoiding asking for your money right away and instead, breaking the ice by announcing a promotion or in-store event. When you’ve completed that, you can add, “Oh, and by the way…” to remind them that a debt is still outstanding.
3) Use the “I’m Human, Too” Approach
The “I’m Human, Too” approach involves using your management skills to give the impression that as the owner of the franchise, you still have your own bills to pay, food to buy, and everyday expenses just like your customer. In other words, if they don’t pay their bill, you have to pay it out of your own pocket. And that could mean that eventually you will be forced to raise your prices (this is quite useful if you know that your late-paying customer is a frequent buyer or user of your services).
