One of the questions that often comes up at the beginning of credit control training courses is how to deal with difficult, angry and downright abusive customers. Luckily it doesn’t happen very often and when it does it can be upsetting to say the least. I have witnessed tears among my staff members on a few occasions over the years and it can really ruin your whole day! These abusive calls are the reason so many people keep away from credit control, because they are afraid that they will be treated in this manner on a regular basis.

After many years I can assure you this type of call is the rare exception. If you are finding you are getting more than your fair share of abusive calls, I would respectfully suggest that you take a long hard look and what you are doing, listen carefully to what you are saying and how you are saying it and maybe more importantly what the customer is hearing...

If you start a call in a tone that is perceived as aggressive you will get aggression.

Now on the basis that you are doing everything correctly and the customer is the problem, there are a number of steps you have to go through.

Step 1 – Listen carefully. I know it can be hard to get past the aggression and the tone and sometimes the colourful language they use. If you are listening with a clear intention, that might make it easier. So hold the phone away from your ear if you have to and listen to discover if the customer has a genuine grievance or if they are simply venting.

If they have a genuine grievance and you or your company has clearly done something wrong then you have to apologise. If for no other reason than it will take the wind completely out of their sails, they were not expecting that response from you, so that puts you in a stronger position.   

If they haven’t got any issues at all and the content of the abuse is along the lines of “How dare you ring me, who do you think you are, don’t you talk to me like that...” and so on – this is completely different and in simple terms that customer does not have any money. They are using their aggression and rudeness as a shield to protect them and to keep whatever money they now have. If they can upset you to the point you hang up, they have won that round and they are having a laugh at your expense! If they can intimidate you to such an extent that you are afraid to ring back ever again then they have done a great job.

Always remember that your job is to get the money. There will be many obstacles and barriers in your way and the job of a professional credit controller is to get past all the barriers, all the excuses, all the reasons and get to the money in the quickest possible time. Anything else is a waste of time.

Next week I will continue with this topic and I’ll give you six strategies for success in dealing with this type of person

1. How long are they in business? As a simple rule of thumb the longer they are in business the more stable they are. The critical time is between three and five years – where you will see the highest number of failures. So keep an eye on all customers as they go through this period. The key area to monitor here is the solvency ratios and cash flow.
   
   
2. What are the prospects for the Industry sector? No matter how good the business is if the sector is experiencing a downturn, this will have an effect on all the businesses within that sector. Some will fail and others will emerge stronger. By definition, the fewer businesses that exist in a sector the stronger they will be.  The key areas to monitor here is also solvency and also their efficiency ratios to see how well managed the business is. A simple rule of thumb here is that even if the sales are falling, as they will in a troubled sector, how are their costs in comparison? Are they taking the right decisions, are they keeping the business in optimum shape to maintain the required profit margins?
   
   
3. How are they paying your account? Payment performance is another key measure in determining the credit worthiness of a business. If they continue to pay their account on time or even continue to pay at the same time every month, this demonstrates a well run cash flow system. If they are getting later and later every month this could herald problems in the future.
   
   
4. How are they paying other suppliers? There is a lot of information available on payment performance and statistics held by a number of information providers on a business’s payment performance with their other suppliers. If your potential exposure is significant then you need to be getting this information on a monthly basis.
   
   
5. What is their filing record? If they file all the correct documents in the Companies Office or Companies House on time, particularly their annual accounts, this demonstrates an openness and honesty that has to be taken into account, even if the news the figures contain is not particularly good. If no information is filed I think it is fair to assume that the figures will be worse than expected and your granting of credit should reflect this position.
   
   
6. Every account should be assigned a Risk Rating; this can be as simple or as complicated as you wish. At the most simple level you should have a traffic light system where green is low risk, amber is medium risk and red is high risk and the accounts managed accordingly.
   
   
7. From an internal perspective, every account should have simple terms associated with it, this defines the exact day and date that payment is expected. Depending on their Risk rating you can build in flexibility or not as you deem appropriate. For low risk accounts you might be prepared to continue to supply them for a week or two after the due date. High Risk accounts may be cut off on the first overdue day.
   
   
8. Every account should have a Credit Line or Credit Facility associated with it, which represents that maximum exposure you are prepared to accept on every single account. This should be reviewed on a regular basis, particularly when an order will bring the balance above the set credit line. At that stage you should either increase the line or get payment before the next order is released.