The 7 C's of communication: credit managers having a discussion

For over 20 years as a credit manager in construction, I found that success or failure almost always came down to communication. Whether it was in person, over the phone, or on the computer, every word and non-verbal cue with my customers either got me closer or further away from getting paid. Fortunately, good communication skills can be learned — and there are 7 C’s of Communication credit managers can use to learn and grow their skills. 

Managing credit risk is all about communication — with your boss, your salespeople, and your customers. In this article, I’ll show you how anyone working in credit and collections can use the 7 C’s of Communication to be more successful and get your company paid!

The 7 C’s of Communication

The 7 C’s of communication are all words to describe how your communication should always be: clear, concise, considerate, courteous, coherent, correct, and complete. These are all vital for communication as a credit manager at any company.

1. Clear 

First and foremost, be clear. Think through what you are going to say before you say it. Don’t leave room for interpretation. 

When I joined a company that had a credit manager in that same position for 20 years, I realized I was going to have to re-train the customer base. I had to call every customer and explain that I was the new CM. What the previous manager allowed would not be okay now. There was no beating around the bush! 

If our payment terms were Net 30, that meant the invoice is due 30 days from the date of the invoice. If the payment wasn’t on time, I had to explain what the consequences would be in a clear and detailed way.

2. Concise 

This is huge: Be concise in your communication. When you’re detailing due dates and the steps that would follow if an invoice is not paid, you have to keep it brief and to the point. 

Leave no room for reading between the lines. It’s not the time to lay out a laundry list of “constructive criticism.” Stick to the point. 

3. Concrete 

When you communicate using concrete language, it conjures a clear image in the other person’s mind. Here’s an example of concrete communication: 

In Thea Dudley’s online course for credit managers, here’s what she says when she’s explaining a credit decision to a customer: “We took all of your financial information and put it into a big credit blender. When we poured it out, the smoothie said ‘we can’t give you credit right now.’”

I don’t know about you, but I can almost taste that credit smoothie. It doesn’t sound appetizing, but you get the picture right away: It wasn’t one specific factor that kept the contractor from getting the credit they wanted. 

She could have said, “We considered a lot of different things,” or “It was a combination of factors.” But that sounds non-committal, and leaves the customer with a lot of questions. A blender is a super concrete image. 

Of course, you don’t need to talk about blenders or smoothies to be concrete. You just need to give them a picture of what you’re talking about. 

Don’t say “If you don’t pay us on time, there will be consequences.” A consequence could mean anything. Instead, be concrete: “If you don’t pay our invoice on time, we will file a mechanics lien on the property.” This conjures a clear image of you filing a legal document in the county recorder’s office that could interrupt the project and even cause them to breach their contract.    

Thea Dudley teaches credit & collections

Join the free certificate course to learn the foundations of credit & collections in construction with 30-year industry veteran Thea Dudley.

4. Courteous 

When I took over as credit manager, I had to be courteous and understanding of the fact the previous CM pretty much let customers get away with whatever they wanted to do. She never sent notices of intent, put accounts on credit hold, or filed liens. 

When I explained the new process going forward, I had to listen and be empathetic while I re-trained the team. I  had to get them to trust in the process and understand that I am here to help them. 

Remember, your customers are people too, with real feelings. Don’t be sarcastic or try to intimidate. Being courteous and pleasant. It can be hard when a contractor is screaming at you for not giving them the line of credit they wanted, trust me! But if you listen to their needs and treat them with respect, it will go a long way toward saving a customer or preventing a delinquent account.

Learn more: How to deny credit gracefully

5. Coherent 

Being coherent means your communication is logical and consistent. This may mean explaining the steps in the credit application process to a new contractor, so they know exactly what to expect. You need to be specific, clear, and consistent. 

It’s not always enough to explain what is going to happen; it’s also important to explain why. If a contractor doesn’t understand why you need them to sign a personal guarantee, you probably weren’t coherent enough in your original communication. 

6. Correct 

Obviously, any written communication should be grammatically correct and free of spelling errors. This is especially important when you’re filling out a legal form, which is a common type of communication in construction. For example, a spelling mistake or incorrect information on a mechanics lien form could invalidate your claim entirely.

But beyond that, it also means communicating in a way that matches your audience’s level of understanding. Some contractors out there don’t know anything about mechanics liens or notices. 

To be correct, you need to be accurate and use terminology that the person you are speaking to will understand.

7. Complete 

In marketing you hear this phrase all the time: “call to action.” This means that you give someone a “next step” — something you want them to do when they are done listening to your conversation, reading an article, watching a webinar, etc. 

In speaking with someone, you want to make sure you complete the conversation:

  • Do they know what to do next? “Pay your invoice by Tuesday.” 
  • Do they know who to reach out to if something happens? Should they call me, or my salesperson? 
  • Do they know what will happen if they don’t take the next step? “We will file a mechanics lien if we don’t receive payment by Tuesday.”

The 8th bonus C: Consistency

Some people include this in the definition of coherent, but I like to call it out again separately. Because, as a credit manager, consistency is one of the most important communication traits you can possess. And it’s not just an individual quality —  your whole company needs to communicate consistently in order to drive the outcomes you want. 

Learn more: How to build a relationship with the sales team

For example, you may tell a customer on Friday that you will file a lien claim if you don’t receive payment by Tuesday. But on Monday, they talk to their salesperson who tells them that it’s the first he’s heard of it, and they can pay next week. Imagine how hard the next conversation will be with that customer. Spoiler alert: It won’t be a fun call.

Communicating consistently requires everyone in your company to be on the same page, and have policies in place that everyone is working from. It also requires that you and your colleagues keep each other in the loop about what is going on. Your company is like a professional juggler: Your right hand needs to know what your left hand is doing, or else you’ll drop the ball.

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