30+ industry experts, 100+ B2B platform founders, and 800+ manufacturer and distributor friends will gather in Fuzhou to discuss the internet transformation of the FMCG industry.
1 The Importance of Payment Collection Some salespeople are eager to sell and adopt a low-key attitude towards transaction terms, especially payment collection. For example: "Any time is fine!" or "Let's talk about it later!" As a result, transactions begin in ambiguity, and problems arise when it's time to collect payment. Educating employees that "payment collection is important" and "chasing payments is difficult" can prevent "unnecessary accounts receivable" from occurring. The impatience and侥幸 mentality of frontline staff on payment issues is very dangerous because they execute company policies and hold everything in their hands.
Correct mindset:
- Try to conduct cash transactions as much as possible; sales without recovered funds are worse than no sales.
- Chasing debts is harder than selling; instead of spending a lot of time and energy on debt collection, use that time to develop more and better customers.
- Rather lose this deal than risk credit sales.
- Before payment is received, all sales are costs; after payment, the sale is only half complete.
- Overdue accounts require dozens or hundreds of times more sales to compensate.
- We cannot use book sales to pay wages and supplier bills—we need cash.
- Our mission is to create profitable sales volume.
2 The Rationality of Collection and Dunning Some salespeople show a certain timidity in dunning. A key issue here is the need for firm conviction. "Customers won't stock up without credit; owing money is unavoidable." "The customer is tight on funds; let him owe this once." "This customer doesn't seem like a fraud; he'll pay in a few days." Some collectors think that being too aggressive in dunning will upset the other party and affect future transactions. If you think this way, you will never collect the payment and also lose future transactions. The more a customer owes, the harder it is to pay, and the more likely they are to switch to another (third-party) supplier, making it harder to retain them. So, stepping up collection is the better strategy.
If you can recover debts that seemed hopeless, you can lead the situation; otherwise, you'll be led by the nose, and even payments that could be collected might not be. Therefore, when collecting, being confident and assertive often leads to surprising success. The mental state of the collector is very important.
Correct mindset:
- Cash collection is an unavoidable and challenging task, and dunning is a matter of course. Don't be timid, reluctant, or constrained by face.
- Credit sales are credit transactions, our trust in the customer's ability to repay, and the customer's commitment to us, agreed upon in advance. That money is ours; the customer is merely borrowing it temporarily—so dunning is justified, and there's no need to feel reluctant, embarrassed, or afraid to speak up.
- The sooner you remind customers, the sooner you collect. Customers never resent being reminded to pay.
- Customers respect professional and meticulous salespeople. Compromising on payment issues won't win customer goodwill or respect.
3 The Wisdom of Dunning—Basic Principles Master the correct mindset (as mentioned above).
** 1 ** "Pre": Prepare for the worst. Collection begins before the sale. Instead of exhausting energy on chasing accounts receivable, put effort into credit screening when selecting customers!
** 2 ** "Fast": Demand payment immediately after the debt occurs. According to British sales expert Porter Edward's research, if the credit period is within 60 days, the chance of recovery is nearly 100%; within 100 days, 80%; within 180 days, 50%; and over 12 months, only 10%. Additionally, research by foreign collection agencies shows that the longer the overdue period, the lower the average collection success rate. The best time to collect is within 6 months of overdue; if the debt drags on for over a year, the success rate is only 26.6%, and over two years, only 13.6%.
** 3 ** "Diligence": Ask frequently. For customers who don't pay promptly, if the salesperson is too easily dismissed, the customer won't take repayment seriously and will think the payment isn't important to you and can be delayed. Frequent dunning makes it hard for customers to find excuses to delay, forcing them to pay.
** 4 ** "Persistence": Have a tenacious spirit with habitual defaulters. For customers who always find ways not to pay, the collector must have a spirit of not giving up until the goal is achieved. A salesperson in Shandong devised a psychological debt collection method: he designed a collection suit, drafted a collection notice to post on the debtor's door, and prepared a broken gong to bang during collection, shaming the debtor. He went to a debtor to collect; the debtor initially denied the debt, then claimed no money after evidence was shown. The next day, the salesperson investigated the debtor's business and location, learned he had a thriving restaurant, and confronted him: "If you don't pay, I'll wear the collection suit, post the notice, and stand at your door with the gong." The debtor turned pale and immediately changed his attitude, agreeing to pay.
Note: This method may be "low-level," but don't feel "guilty" about it because there are malicious defaulters, so "fight fire with fire." First, determine if the customer truly has money but refuses to pay maliciously. If so, after recovering the debt, stop credit sales immediately, so there's no need to fear offending them.
** 5 ** "Flexibility": Be flexible. First, determine if the customer genuinely intends to default. Then, the salesperson can think of flexible methods, such as: before collecting, go to the market and "symbolically" help collect some debts from the customer's downstream clients; if you learn of the customer's operational difficulties, use your knowledge to help analyze the market, plan promotions, etc. Moving the customer with sincerity and service often yields good results.
** 6 ** "Change": Learn to adapt and act according to circumstances. Customers are not good or bad; they are just different. Different customers require different collection methods, provided you know as much as possible about the customer and have all relevant information.
Source: Channel Help New Food Era · New Distribution — 2016 China "FMCG + Internet" Summit Forum —
This is a grand event focused on how the FMCG industry's channels will transform under the trend of Internet+ transformation
Agenda 09:00-09:30 Registration 09:30-09:35 Host opening 09:35-10:05 2016 China FMCG Industry Trend Analysis Report—Zhao Bo 10:05-10:25 FMCG Enterprise Transformation Strategy and Path—Liu Chunxiong 10:25-10:45 Opportunities and Challenges from FMCG Channel Reform—Field 365 CEO Liu Zhao 10:45-11:25 Alibaba Retail Link Full Empowerment—Alibaba Retail Link Guo Kunkun 11:25-12:00 Roundtable Forum—Brand Transformation: Improvement vs. Reconstruction? (Guests TBD) 12:00-13:30 Lunch 13:30-14:00 Distributor Transformation: City Distribution Trends—Weijie City Distribution CEO Wang Qi 14:00-14:30 Roundtable Forum—Why Should Distributors Transform into Logistics? 14:30-15:00 Detailed Explanation of Zhongshang Huimin's One Machine, Two Wings Strategy—Zhongshang Huimin VP Su Xiaoxin 15:00-15:30 Detailed Explanation of Zhanghe Cloud Factory Strategy—Zhanghe Tianxia Yang Lixiang (Content TBD) 15:30-16:00 Supply Chain Finance: Lubricant for B2B Driving Traditional Business—51 Order CEO Chen Xian 16:00-16:30 2B Investment Principles and Approaches—ZhenFund Founder Xu Xiaoping (Guest TBD) 16:30-17:00 Small Retail, Big Opportunities: China's Retail Transformation and Upgrade—Yurun Group E-commerce GM Wang Jianfeng 17:00-17:30 Roundtable Forum—Who is the King of FMCG B2B Models? (Guests TBD) 18:00-20:00 Dinner
For manufacturers and distributors looking to transform, this event is a must-attend. Interested friends can long-press the QR code below or click "Read Original" to register.
Registration: Long-press the QR code below or click "Read Original"
↓↓↓ Click "Read Original" [Register]