Credit Policy for businesses and how to extend credit and manage credit risk

SAVING FACE - "It is important for the customer to save face". This was said by Steve Coyle who is an expert in Asian collection techniques. The place was Kuala Lumpur and Steve took the time to tell me that while my assertive collection skills would save time, and maybe even collect money - they would have a negative impact on customer retention.

Lesson: We ALL need to save face ('Give the Dog a Good Name' was a chapter in Dale Carnegie's book), but with some individuals or cultures we need to go further and apply the platinum rule rather than the golden rule.

FACE THE MUSIC - Often in my consulting role, I see too many people sending the same letters or leaving the same messages - time and again. I guess they're expecting different results.

Lesson: Many of us might agree that a good definition of insanity is doing the same thing and expecting different results. Face the music and turn to it faster.

ABOUT FACE - Up the volume on that music! In collections, the natural tendency is to get a bit more direct and assertive with the customers haven't responded to our previous messages. I have some success using a much softer approach, just before the write off stages.

Lesson: It is softer, but still DIFFERENT. The gradual increase in volume hadn't been successful and while a softer one shouldn't work - it often does.

NORTH FACE - Many of you know this was a brand that was established back in the late sixties in California. The name came about because in the northern hemisphere, the North Face of a mountain is more likely to be the steepest, coldest, and most difficult face to climb.

Lesson: Anyone can collect from a customer who has the money and is co-operative. Not much glory there. Someone in your department or firm (maybe you) dealt with the Customer from hell this month and deserves some recognition. Time to get a North Face jacket or trophy and recognize the achievement.