Customer management belongs to sales and credit departments

Thea Dudley

Dear Thea,

I have been a credit manager for a very long time. Over the years I have heard the sales reps I work with refer to the customer as “theirs” until it all goes downhill and we have to sue and then the customer becomes mine with questions like, “how did credit let this happen?” One rep even had the nerve to say, “I could have told you not to give that customer so much credit.” Well, you didn’t. It’s insulting. When did this become the blame game?

Signed, Blamed and Shamed in Basalt

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Dear Blamed,

Honey, honey, honey, where have you been living all these years? Everyone has an opinion and wants to claim ownership of something when it is good and profitable. When it starts down that slippery slope to insolvency, well that is another story indeed. Suddenly no one remembers the war cry of “they need a larger credit line” or “they really need 60-day terms.” And who can forget the legendary, “We need the sales; I got your back.” Those are classics, everyone.

Take control and be blamed no more. Flip that script and change the dialogue. The whole us vs. them, yours, or mine is old, tired, and frankly so 2006. The approach in today’s post-recession world you should be cultivating is a holistic approach to customer management.

Not sales, not credit, but customer management with both teams working together for the best possible outcome for the company. Communication is the key and changing the outlook and attitude of both teams makes for more profitable outcomes.

Sit down with your sales team and go over your customer report that includes: sales to date so far this year; sales last year; average days to pay; payment method (check, credit card, ACH, etc.); margin; and finally, amount of touches. By “touches” I am referring to how many touches this customer requires to maintain their business. Do they have lots of returns, pricing errors, multiple calls to get you paid, and just plain needy?

Once you start analyzing your customer base and what categories or grid they fall into, you can really start to manage your customer base better. In most cases sales and credit each have some information that will help determine which customers are a good bet and which are like going to the craps table. If a customer is low margin, is a chronic late payer and uses a credit card, you may not be making any money on that customer and he may be one you want to shed.

Typically, sales teams don’t know if the customer pays with a credit card or if they notoriously run more than 15 days late to pay their bill. They may not be aware of how many times the customer calls in about sales tax issues, returns or other issues since many of those calls end up in credit. Should the sales rep “know their customer?” Well sure, but no sales rep is an island. That is where a holistic customer management approach comes in. Setting up time with your sales and credit teams to go over what is happening on a deeper level keeps the wheels on the bus.

What reports can be developed and utilized to stay on top of the customer base? What do you and your company want to use as measurements to evaluate your customers? Where do you want to focus your time and resources to support which customers? Are you still using the “any customer is a good customer until stuff goes down” methodology?

Just as customers have choices, so do suppliers. A company has a finite amount of resources, whether it is people to support the customer or money in the form or products or services. Where does yours company want to focus their resources?

Will there still be mistakes? Sure. Will there still be people on any team that look to place blame, point out mistakes instead of asking questions, standing together and solving the issues? Absolutely. If anyone ever tries to make you feel like you have made a monumental mistake alone and are completely to blame, just remember the Battle of Karánsebes—when in 1788, the Austrian army attacked itself and lost an estimated 10,000 men due to stupidity and a team not communicating (and an argument over schnapps. Seriously, look it up), which just goes to say, don’t waste time attacking each other, keep your army together.



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