Something is better than nothing

08Jan09

Thankfully, I have never worked for a collections agency. But given the current economic climate, I’ve been party to more than one conversation where a customer owes a vendor some money. They’ve got the same sob story as everyone else, and want a few more weeks or months to pay up. The trouble is, this scenario usually ends with the customer paying exactly zero of what they owe.

Given the above, it’s no wonder that vendors are hesitant to just extend a customer’s terms whenever they ask for more time. Yet there’s a good compromise for both parties: the customer pays something, anything — no matter how small — towards what they owe. It may seem trite, but this show of good faith can go a long way towards maintaining and eventually restoring the relationship when economic conditions improve.

I don’t have any data on it, but I’m guessing that customers who pay even 10% of an overdue bill are much more likely to make good on the rest later, compared to the true deadbeats who won’t pay a dime today and expect a free ride.



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