Boost Cash Flow with Win/Win Customer Offering!
The historically high price of petroleum products is certainly creating some heartburn this summer of 2022. Managing cash flow and keeping suppliers, bankers and other business partners happy has become more of an art than a science.
Customers are also experiencing the stress of cash flow management for the same basic reasons. It’s more important than ever to exercise discipline, superior communication and efficiencies in servicing your customers and helping them pay on time.
Creating new win/win opportunities are part of the art of crisis management, and a great example of that type of opportunity is offering to shorten customer terms. That might sound like a ridiculous suggestion, but credit managers are absolutely reporting success in offering up terms adjustment to allow more frequent, smaller dollar invoice payments.
Whether it’s a 5 day adjustment for 30-day tank agon customers, or 3 day adjustment on commercial and cardlock billing, it all adds up to quicker cash flow for the jobber and potentially more manageable payable for the customer!
Example of talking to a customer about the new offering:
“I want to let you know about a new program we’ve rolled out to help our customers manage the current pricing of product that we are all experiencing. We noticed customers calling to tell us their payments to us were so high it was creating problems and could they pay less dollars more frequently. So in response, to help our customers, we rolled out a new reduced cycle payment option. You can receive smaller invoices spaced a few days closer together to help reduce the larger dollar invoices that put more stress on cash. Does this sound like something that would be helpful?”
Be sure and coach employees about the benefits to the customer, set up some bonus potential for conversions, and meet regularly to discuss the success rate, and how to respond to the most common objections.
Is everyone going to jump on this new program? Of course not, but you might find the conversion rate to be higher than expected based on your customer’s situation. As with any new offering, you can expect more customer migration after they hear about it a few times so email campaigns should also be part of the process.
Feel free to reach out to me with any questions or feedback!