Building the Credit Manager and Customer Relationship

As a credit manager, the way you connect with your customers has a big impact on your company’s success – especially in the construction industry where credit gets complicated. If you’ve ever wondered how to build more positive relationships with your customers, you won’t want to miss out on this webinar!

Join this discussion led by Robbin Windham CBA, Credit Manager for BNSF Logistics, one of the fastest growing 3PL’s in North America owned by Warren Buffett.

Register for the live session and Q&A to find out:

• Tips for building customer loyalty
• How to work with difficult customers
• Effective ways to communicate with your customers 

Transcription

Lori J. Drake, CBA (00:29):

Good afternoon everybody. And thank you for joining us today for building credit and customer relationships. If you don’t know me, I am Lori Drake. I’m the new payment professionals, community manager for level sets. I was a credit manager for 20 years, as well as in construction for the last 13 years. And so I get to take my education experience on my networks and share that all with you guys, get to join other people from my network. They get to do the webinars, help with classes, and we just try to help all the current credit professionals as well as all those up and coming. Today’s my pleasure to introduce Robin wind ham. She’s a credit manager for BNS F logistics. She also was a credit manager for construction a few years back. She was just elected administrator of the women in leadership executive committee for her company. And she also received this CBA designation of excellence in 2019 from NACM. Thanks for joining us Robin. Thank you.

 

Lori J. Drake, CBA (01:32):

So it is our next lab. Uh, it’s this case, nobody knows who Levelset is, or you’re not sure what we do. We do know that, uh, construction is a complicated subject, so everything we do, every product that we have, we try to help you obtain payments faster, get rid of your headaches. We have a lien waivers way, uh, notices in intense. We can track all that for you. We have free education classes. We have webinars. We have a community to where you can network with other people and enjoy events. And we would love to have you be part of all of that. If you have any questions, just let me know. Uh, right now what we’re going to cover today is why developing a relationship with your customers? Essential. We’ll talk about genuinely caring for your customers. Never say never because you always wind up selling to somebody that you said you weren’t going to as well as coming up with a solution.

 

Lori J. Drake, CBA (02:28):

First, I would like to let you know that there is a chat box up on your screen. If you just hover over your screen there, you should find a chat box. Please feel free to ask questions as we go. We will try to answer them as we go, or at least get them all at the question and answer at the end. Additionally, we are going to have a new certificate offered for this class. If you stay to the end and learn as much as you can, you will be getting an email afterwards that just has a few questions on it. If you answer those, you’ll get a certificate that shows you completed this class that hopefully you can share on your LinkedIn or any social media posts and kind of help us go with more people to get to webinars as well and help you learn along the way Robin, as your motto says, salvage the relationship before you sever the relationship. Why is the relationship with the credit manager or a better credit manager has so important to have with their customer?

 

Robbin Windham (03:29):

Well, first of all, building the credit customer relationship is a valuable currency in this day and time. Uh, competition is at an all time high for all industries. Uh, so building relationships, uh, improves cells and collections, but it’s also improving the relationships. There are your relationships, I’m sorry, uh, to help ensure there will be a mutual understanding between you and your customer along with your employer.

 

Lori J. Drake, CBA (04:04):

Uh, definitely agree with that. You had mentioned to me before that successful credit manager actually cares. They don’t really just go through their job day by day. They actually genuinely care for their customers. Can you explain this more and just kind of the three categories that you picked there?

 

Robbin Windham (04:24):

Uh, yes. First of all, um, communication, uh, building your relationship with your customer begins with the conversation during the initial account set, uh, account opening process. So getting the account set up correctly and, uh, according to your customer’s requirements, um, I’ve heard many times how companies don’t, uh, even notify their new, new customers that their accounts are already in opened, um, and available, uh, let alone talk to them about what your expectations are for them as a customer. Um, and along with knowing your customer’s expectations, uh, for, from you, um, or how, you know, how they prefer, how your customer prefers to communicate is via email, phone text, um, most day in time, right now it’s probably email, but there’s still some customers that like that phone conversation or even now zoom. So that time, that person, uh, sorry, I lost my train of thought there for a minute.

 

Robbin Windham (05:37):

So, um, then, you know, and then to build the trust, uh, to build trust the conversation has to be focused on making sure the customer believes that you are genuinely, uh, interested in getting to know them and making sure that they are taking well taken care of, and that you are looking out for them and for their best interest as well. Um, but also your communication starts with your sales team. Your sales team is your eyes and ears. They’re going to be the ones that can let you know things before you probably even hear them. Uh, what’s going on with your customer, what they know about your customer, because they’ve built that first initial contact and relationship. So just getting information from your sales team and having a good relationship working and collaborating with them, get helps get you, uh, uh, open door and to help make your customer feel comfortable.

 

Robbin Windham (06:37):

Um, and then when you talk to it with your customer, just personalize the relationship don’t be black and white script. They they’re gonna notice that just be you, uh, get to know them, uh, and make them feel that you are generally genuinely, um, interested and that their interest is number one at that time, just basically over deliver and under, uh, and under promise, uh, let the customer know how important they are and you will make sure that everything, uh, with their account is correct from the onboarding, uh, process all the way to receiving payment and just make making everything as smooth as possible and as painless as possible for your customer. Uh, then you go to, we talk about the verbal and nonverbal communication, always smile. When you’re talking with your customer, especially over the phone, your smile is going to reflect your tone, uh, and use positive words and phrases, be proactive, listening, no interrupting, uh, show empathy.

 

Robbin Windham (07:54):

They, you know, by saying, I realize how difficult this is, or I understand just things like that. Uh, don’t come across as defensive and try to prove your case, uh, customer visits, you know, with COVID-19 going on this past year, it’s been very difficult to, for customer, uh, visits on site. Uh, some companies, they, they don’t require that and they don’t allow customer visits, but if you can, customer visits are essential. The customer not only gets to see you face to face you get, it gives you an opportunity to see their property, see, uh, meet, um, some of their, uh, 13. And you can see a lot and learn a lot about a customer during an onsite visit. Uh, is their property well kept, you know, is their building maintained. If, if it’s not, those could be some red flags for you in your credit decisions. And, uh, and then get, you know, the customers, they, they like talking about their locations, their company, get them talking about that. The more they talk, the more you’re going to learn about them. And that’ll, they’ll help you in your decisions when, when it comes time for, uh, credit limits or, or increases or those hard conversations.

 

Lori J. Drake, CBA (09:23):

Perfect. Yeah. Customer visits were always one of my favorite things when I was doing credit. I mean, if they like you, they’re going to pay you before anybody else, you just gotta make sure they like you as opposed to go until your direction. Uh, so never say never is, uh, probably something that all credit managers have experienced. I’m never going to sell to this person again. Oh, I had a see this person. I’m not going to do this. I’m sure plenty of us out there know that you do usually wind up selling again to those people. I’m going to throw a little pitch here. If you haven’t seen Thea’s class in our credit management Academy, it’s just Levelset slash credit management Academy. She has a section of her class where she also talks about the never say never. And she’s got some great horror stories. And if you join us on April 29th at four 30 for our meet and greet, you’re going to hear a whole bunch of different horror stories from a lot of different credit managers. But in the meantime, uh, this kind of goes with your motto about, you know, not severing a relationship, keeping those relationships. Can you talk a little bit about, you know, why you would never say never, you know, you always try to say yes,

 

Robbin Windham (10:33):

Absolutely. Of course our BA or at BNSF logistics. Now our goal is to say yes to every credit request or application. Um, but you are right. I do. Every one of us have had the thoughts. I’ll never sell to them. You know, they’re not paying our competitors. However, we need to make sure we keep those thoughts to ourselves and not verbally communicate them. So we don’t want to chance by any, uh, violations of antitrust laws. Um, but as for small claims litigation and liens in this thing, to make sure that you have your, uh, have the correct documentation. And so if an account is turned to litigation or does go to small claims, um, then, then you have your ducks in a row and, and starting the first documentation that you start with, making sure that credit application is, is accurate, is correct, is signed by the customer once the customer signs that make sure you have on the credit application, make sure you have a disclaimer of your terms.

 

Robbin Windham (11:47):

Uh, and the customer is agreeing by signing the application. As you all know, the customer agrees to terms, they are agreeing, yes, this is our legal entity name. And we do agree with your terms. Then that’s a legal documentation to stand up and litigation, uh, or small claims and impossibly even, uh, liens. So that, to me, that’s one of the most important documentations in credit is to get that right. Uh, then your comp, our competition. Um, it’s proven that if you have a relationship with your customer, that they’ll normally choose to pay you over someone else, if you have that strong relationship, uh, a customer they’re going to they’re, you they’re going to use many competitors. Uh, but if it’s who builds that better relationship with them is the ones that are going to pay first most of the time. Um, you can, you can also build a relationship with your competitors by joining an industry group, uh, industry credit group, or a credit associations, such as NACM national association of credit managers, uh, that I’m a member of as well, building that network with your competitors, that can be very beneficial.

 

Robbin Windham (13:13):

Um, you can share historical information and data so you can make better credit decisions, um, with the customer, uh, and, uh, uh, just, just, uh, making those everyday decisions. Is there something going on with this customer that we have, we haven’t heard about maybe a competitors heard about, and they’ll share those with it. If you’re a member of these industry groups or NACM, they’re going to share that information as long as it’s historical data, uh, now they’re never going to say never, they, they can’t say, never say never and never, you know, sell to that customer, or they’re dead B. You want to avoid those. So, um, and just your personality just be personable. And open-minded do your research. Why a customer got where they work. They are, if they’re in a negative situation with your company, um, why, how did that happen? It was, is it, was it, uh, uh, unforeseen circumstance?

 

Robbin Windham (14:22):

See if, see, if there’s something you can do to help keep the relationship, you know, make payment plans, can they be on milestone payments, um, 20% in advance then for the next leg, you know, they pay another 20% in advance. And then for the last leg, you know, it’s some terms, 30 minutes terms. Um, this is especially a place where I would ask myself, I would say, I would rather salvage the relationship and sever the relationship, make sure on your side that you do everything you can to salvage that relationship. But I’ve had customers that has been in this situation and they ended up being some of my best customers.

 

Lori J. Drake, CBA (15:15):

Um, before we go on, there is a question in the chat it’s asking if you can repeat those network association groups.

 

Robbin Windham (15:23):

Absolutely. So I am a member of NAC. I am, uh, that’s national association of credit managers. Uh, the, what their website is in acm.org org. Yeah. I have to think it’s not a, they can, you can call national if you don’t know what affiliate to sign up with, uh, and they can direct you to the affiliate that’s best suited for you in your area. Uh, then the other one I’m in the transportation industry. So I’m a, the chair, uh, TRM G, which is transportation revenue management group. And it’s a credit, a credit group for the transportation industry. Uh, I know for construction, there’s a Texas statewide through the NACM hosts as well in a cm Southwest, which I’m a member of that affiliate. Uh, you know, yeah. You’re more than welcome to email me. I think Lori can share my email address at the end if you’d like more information on those groups.

 

Lori J. Drake, CBA (16:36):

Yeah. To who asked that there are so many industry groups out there, if you even just search, I mean, our community is going to share all those. Once we have our landing page be where, you know, be watching for that as soon as it comes out. Um, but there’s also like CRF and C R M a. There’s so many different credit re uh, websites and associations out there. If you just Google industry groups for whatever industry you are in, you will definitely find a group and they’re all great people and you get a lot of information out of it. Yes. Coming up with a solution. So, you know, you want to do all this, you know, you want to figure out why your customer got the way that they’ve got, you know, how they’re in their situation. It’s pretty obvious that you’re going to have to be the one to figure this out. So what are your thoughts on how to come up with a situation to fix whatever is going on for nonpayment?

 

Robbin Windham (17:35):

Well, first of all, um, look into your tools, you know, get, look at your toolbox. Uh, we’ve discussed, you know, building up your loyalty, understanding and creating a strong foundation, you know, for your company. Um, they come in a member of a credit association, so you can get the education. Um, they help to answer your questions, um, uh, for some of these things. Um, so, you know, if a customer is exceeding a credit limit, w you know, using those tools that you already have to, to keep the risk as a minimum for your company is crucial. Um, and what, what do you do when they exceed their credit alignment or credit, you know, their own credit home product, or, you know, products on back order? Um, with me, I just, I do my research, you know, do your reviews, you know what, what’s going on, ask those questions.

 

Robbin Windham (18:48):

What’s going on, like six lean, six Sigma, the, the five whys. Why, why, why until you come to your answer, the, you know, work with the customer, uh, if they are in exceeding their credit limit or they’re, they’re on credit hold, what is it you can do to work with them and ask them, you know, how can we improve this situation, you know? Um, and then listen to them and learn from them, what you can do better. And they’re going to remember that in the end there, they’re going to remember this company worked with me when I was going through, we were going through a difficult time. They stuck by us. They worked with us. It might, you might not be the ideal situation, but you’re, you’re still, again, you’re salvaging that relationship. And you’re building that relationship to, for a customer to become a loyal customer, and you’re going to get paid first.

 

Robbin Windham (19:49):

Um, so, you know, help that customer grow their business. What can we do better to make your experience with us, you know, easier or, uh, you know, or more beneficial. So just, just talking with the communication is the number one key is, you know, communicate with your customer, you know, nowhere, or know them, know your customer, work with your sales team, to get to know your customer, um, team up, to get with the sales, your sales person, and see what you can do. This is what we can offer. Can we offer something better? You know, are we meeting your needs, find that you need to ask those questions. Are you meeting your customer’s needs? Are you meeting their expectations? It’s not just them meeting your expectations.

 

Lori J. Drake, CBA (20:41):

Thank you. So, in summary, uh, you talked about sales and collections. By having that relationship with the customer, definitely customer loyalty, you build that relationship, you visit them, you get to know them, they get to know you. They are definitely more likely to be loyal and then helping them grow their business. I mean, if there is a situation with them not getting paid, what can you do to help them fix the situation? You know, the customer will never come up with the solution themselves. So that is up to the credit manager, you know, to figure out how to do that. Um, right now, if anybody has any questions, we would love to have you fill out that chat box and get you some answers. Um, don’t see anyone other than the network one yet. Um, so I’ll go ahead and, Oh, here’s one. I currently have a general contractor, which was impacted by the COVID con economically and have sent a couple of emails to arrange payments, but have had minimum payment at this point. It’s been over six months. How should I approach this? Whoo.

 

Robbin Windham (22:01):

Um, maybe ask them if they liked it.

 

Lori J. Drake, CBA (22:04):

No,

 

Robbin Windham (22:07):

I’m just teasing. Um, I just, I would be consistent and let them know. We appreciate the payments that they have have been making, although we may need to see, you need to see a, uh, see if we can work out where they can make it larger payment, um, or when they expect they can start making larger payments, maybe look at a payment plan, and they’re not going to come up with a payment plan, so offer a payment plan and then see if they’ll come back and say, okay, we can’t do that, but maybe we can do this. So figure out how, how soon are you wanting that, that payment, uh, to be that accounts be current and what what’s it going to take? So do you want to see it back in, within terms in three months, how much, how many payments, what are those payments going to have to look like?

 

Robbin Windham (23:08):

And then offer that to the customer. You have to determine how much risk are you want, how long do you want to take that risk? On the longer we all know the longer we wait, the harder it is going, it’s going to be to collect. So the sooner you can get a payment plan, uh, if your company will allow you to offer that the better. So, um, my best, what we’ve done in the past, and that’s worked very well for us. Uh, we’ve offered, so this is the payment plan we’ve come up with. Would this work for you?

 

Lori J. Drake, CBA (23:40):

Thanks, Robin. Um, all I, my 2 cents on there sounding, it sounds like you’re in the side. Um, my first question would be as if you sent your notices and protected your lien rights, if you did, you hopefully would have all your dates down and could go ahead and file your lien. Or you could go ahead and just send the demand that says you’re going to file a lien. You could always go around the contractor to whoever the property owner is, where your material went. Um, there are several things that you could do. Construction-wise if you wanted to reach out to me via email or Rhonda via email, um, our emails will be at the end of the slide. Um, I can help you. We can help you more specifically, just so we can get an idea of what your true situation is. Uh, next question is, is it appropriate to ask, has something happened recently that caused this past due issue?

 

Robbin Windham (24:36):

I think it’s very appropriate. There’s nothing wrong with it at all. Um, it just helps you identify maybe what caused this situation and the issue. Uh, wasn’t a natural disaster. Um, if it was, if it was a natural disaster, like COVID, you may want to extend a little bit more grace and a little bit more time, uh, that may change how you want to set up a payment. Maybe you want to give them extended terms for just a short while. I don’t know. Um, but it’s definitely a great question to ask.

 

Lori J. Drake, CBA (25:14):

I agree with that. I definitely wouldn’t give them options as an answer, like don’t say, Hey, did COVID causes this issue, right?

 

Robbin Windham (25:21):

Exactly. Yes. Yeah, no exam answer. What, like you said, can I, uh, what caused this issue have them don’t give them options or ideas? Oh yeah. Yeah, it was COVID that’s it?

 

Lori J. Drake, CBA (25:36):

Uh, from Daniella we got hello. What’s the best way to deal with a defensive or difficult customer over the phone

 

Robbin Windham (25:46):

For me, I have to take some silent, deep breaths and stay calm and smile. So, because if I don’t, then my defensive tone may come across to them. Uh, if they’re just to me, if they are just absolutely belligerent and aggressive, do you mind just, I just say, I understand you’re frustrated. This is where the empathy would come in and understand your frustration, and I want to help, but in order for me to help, we need to talk calmly.

 

Lori J. Drake, CBA (26:29):

Um, one suggestion in these times, maybe ask the person if they can do a zoom call and then you can kind of get that face to face reaction, and sometimes that’ll help you read them a little bit better. But other than that, I absolutely agree with what Robin was saying. Um, we got a question from, Ludy says, how do we determine if the signature on the application is from someone authorized to sign, it could be accounts payable, owner management, or procurement. How would you know for sure

 

Robbin Windham (27:00):

On our credit application, we have the signature, but we also ask for the title of his signing. Um, now you can’t prove if they put president, you can’t prove they were the actual, the president actually signed that. Or if it was the opera logistics manager or the, you know, construction, you know, someone else, uh, onsite, but again, that’s, that’s where you have to, um, just trust that they’re that they are the person signing is the legitimate person. Uh, I think the title does help then along with their name, I would, I would also have them print, you know, have a line where they print their name because signatures are very hard to read. Um, and then also make sure it’s followed by their title.

 

Lori J. Drake, CBA (27:59):

I agree with that. And you could also Google the company and see if their name shows up as an owner as well. I always Google everything if there’s yes. Yep.

 

Robbin Windham (28:09):

And a lot of credit of your credit reports, some of them will show who the owners and the officers are as well. Um, uh, but a lot of companies authorize, you know, uh, accounts payable per uh, person to, to be able to sign those and represent the company. So,

 

Lori J. Drake, CBA (28:32):

Good question though. Yes. From Rebecca, we got, what would be the best approach to implement a late fee penalty in order to avoid going to lean process?

 

Lori J. Drake, CBA (28:46):

I don’t know if you guys do late fees or not. Um, for one just quick on my side for one, you need to check your state statutes to see if you’re allowed to charge late fees. Another, you would have to make sure that it States in your credit application, that they signed, that you will incur a late fee. Um, like in Texas, you’re not allowed to, Oh, excuse me. I’m thinking credit cards, but it is far as lean processes. I don’t know that a late fee would stop you from having to send notices. I wouldn’t want to give up my lien rights just for late fee, because if they’re not going to pay you on a regular amount, then they’re not going to pay the late fee either. Um, if they do pay the regular amount and not the late fee, you can’t go after them for the late fee legally. So it is kind of a catch 22, if you have any experience with that, but Ron Roman, sorry. Okay.

 

Robbin Windham (29:42):

I’m called many things. Uh, no, we, we don’t typically, um, add late fees on right now, but again, like you said, make sure you have that in your disclaimer on your credit application. And the customer is aware of that. And when they sign that credit application, they’re agreeing to those terms, you’re, you know, if your standard terms are net 30, um, and you see, and if there are light fees, then there, there could be a late fee charge added and then they agree. And if they agree to those and it does go to litigation or small claims court, even collections, they can collect on those. They can with those fees.

 

Lori J. Drake, CBA (30:30):

Thank you. Uh, let’s see, it looks like we got one more question. Uh, will this webinar be available for us to view again, I would love to share it with my assistant credit manager. Absolutely. Um, we record all of these and once our techie guy gets it all set up, we’ll post it on the website and you will actually get an email that says, thank you for attending. Here’s a copy of the webinar. If you don’t see that, just go ahead and shoot me an email or drop me a line. And I can let you know, uh, where that link is as well. And I lied. We got one more question that came through, have the ability to add late fees, interest, and our cost to collections. These items are great to add and use as a sediment tool to collect full principal. I think she’s, that’s Tammy. I know who she is. She’s saying to get it into your credit application, that you get the late fees that you can get interest cost of collections, attorney fees. You do have to make sure all that’s in your credit, uh, application so that when you do go to small claims or litigation with an attorney that you can recoup all those fees. Thank you for that, Tammy.

 

Lori J. Drake, CBA (31:36):

So since that was our last question, this is the class I was talking about earlier with Thea Dudley. She is our credit overlord. She just had a new book that came out. You can find her book as well as her class on the credit management at Academy at Levelset right now, we’re doing a book download. If you, you will be entered to get a free copy of a signed book. And we also created a new bookmark. That’s really cool. That’s actually going to come in each free book that is awarded. So feel free to go there and at least just download the book or, and take the class as well. As we mentioned, there will be a certificate. You will get a email after this class is done and just keep an eye out for that email. I think it’s just got three questions to answer, and then you will get a certificate that hopefully you can share on your social media and with your boss and everybody, and let them know that she has learned something new and had fun doing it. And I just want to thank Robin again for coming on here with us and sharing your expertise. Thank you very much. I appreciate it. Thank you everyone for taking time out of your day to join the webinar and thank you everyone. Hopefully we can see it at the next one. We’ll talk to y’all later. Thank you. Bye.