Customer Visits


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Goes over the objectives of a customer visit, preparing for a customer visit, what to observe and ask about during a customer visit, etc.

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  • Review Learning Objectives with class
  • Chapter Outline The first source of information about a customer is the customer itself, and nothing helps the understanding between a customer and the credit professional more than a customer visit. The Credit Department can realize significant value by participating in customer visits and meeting the key individuals involved in the operation. Planning, budgeting and preparation for each customer visit will lead to a successful meeting. Follow-up documentation noting key information resulting from the meeting is also important and can help management understand the value added by credit’s participation in customer visits.
  • The benefits of customer visits are listed on page 404 of the text. Building Relationships Customer visits provide many valuable opportunities to build customer relationships. Visits can include representatives from both Credit and Sales Departments which in itself builds the bond between the two departments, along with the customer relationship. Figure 16-1, Questions to Ask on Customer Visits, on page 406 provides possible questions to ask a customer during a visit. Observe the Facilities A customer visit should include a tour of the facilities. An observant credit professional can note irregularities and inconsistencies with information that has been previously provided by the customer. Questions to ask: What is the condition of inventory? Is the equipment run down? Is retail traffic heavy or light? Are stores well located? Are the office facilities too extravagant? Review Figure 16-2, Facility Tours, page 407 in the text book. Discuss and Review Financial Information Many private companies will only permit on-site examination of financial information. A visit is a good time for the credit manager to learn in detail about the components of the customer’s cash flow, especially if balance sheet analysis indicates weakness. Develop Linkages, Resolve Disputes The credit department is in a very unique position to help avoid situations that could lead to disputes, claims and other problems that can negatively affect prompt payment within terms. A customer visit provides an opportunity for interaction among the parties to arrive at a resolution or settlement.
  • Depending on their range of experience, the credit professional may be in a position to provide suggestions for various procedures to the customer. Feedback is often received very well if offered in a professional manner. The willingness to be of assistance strengthens a customer/supplier relationship and builds loyalty from the customer’s perspective.
  • If a portion of the customer visit will include collecting money on account, especially if past due, preparation is very important in order to preserve good customer relations. The credit professional has an opportunity to set the tone for this discussion and reach an amicable closure to the meeting.
  • There is no substitution for preparation. The credit professional should have the following items ready to go: Written Agenda List of Questions Time Frames Established Attendees invited Review the preparation checklist outlined on Pages 410-411 of the text.
  • Once the customer visit is held, it is important to make immediate notes as to the meeting’s outcome, decisions, discussions, etc. These notes may be referred to as trip notes, customer call notes, meeting minutes or customer memo. Review Figure 16-3, Sample Customer Visit Memorandum, Page 409 for an example of a customer visit memo.
  • Review the Learning Objectives with the class
  • Chapter Outline Credit and sales are two distinct functions in any business but they are eternally connected. Both departments use much of the same customer information to accomplish their objectives, albeit independent of the other, and each department can provide information that helps the other do its work more efficiently. This chapter looks at some of the ways credit and sales can work together to maximize efficiencies, make a positive impact on company profits and provide the best possible customer service.
  • Credit as a sales tool The availability of credit is a powerful selling tool and is used by suppliers of goods and services. Review the list showing how credit is a selling tool, found on Page 414 of the text. Although their functions cause them to look at credit granting differently, sales and credit staffs need to work with each other. Sales and credit professionals can find ways to increase sales while minimizing risk. The “Cs” of Credit and Sales Credit managers know the “ Cs” of credit, but some also know of the 3 C’s of the Sales and Credit relationship. In order for the credit and sales staff to develop a real working partnership, they need three additional “Cs”: Cooperation Credit and sales are interdependent. Cooperative efforts between sales and credit is essential to maximize sales and manage risk. Communication Credit and sales each has information the other needs. Exchange of information only works well if there is a two-way exchange of information. Courtesy Cross-functional cooperation requires courtesy and professionalism by all team members in order to create a positive working relationship.
  • A company’s customer base is always changing. Customers go out of business, merge or are acquired, become holding companies, or file for Chapter 7 or Chapter 11 proceedings. Some companies grow very large or change their product line. The antidote for account attrition-as well as for increasing sales-is to generate new customers. Two kinds of customers Credit professionals may categorize prospective customers into two classifications: well-known established businesses with credit and financial history, and newly established or unknown businesses with little track record and few credit references. Investigating potential customers By requesting the credit department conduct a credit investigation on a prospect before making an initial contact , or shortly thereafter, the sales staff can make sure it is spending its time and effort in pursuing legitimate prospects. The credit staff should expect complete and accurate prospect information from the sales team whenever a credit investigation is requested including; the company’s legal name, the complete address, names of owners, officers or registered agents. It is important to remember that all information collected during an investigation is confidential. The process of pre-work with investigations can save time wasted on accounts that would not be offered credit terms and can also speed up the approval process once an application is received from a credit worthy customer.
  • Companies are continuously gaining new customers and losing established ones. This is due to mergers, relocation, changes in business functions, technological changes, and other non-financial reasons. It is important for both the sales and the credit staffs to realize that the financial status of a customer will change over time – for this reason, established customers require periodic credit checks. The role of Sales with established credit customers Companies should have a policy about the salesman's role when payment problems arise. All companies should expect that their sales staff to provide the credit department with any information that may affect the overall well-being of the creditor company as it relates to credit risk. Figure 17-1, Customer Benefits for Prompt Payment, Page 418 lists talking points that sales people can use in their communications with customers about the benefits of prompt payments When dealing with overdue payments, the sales department and the credit department must work together to ensure that customers do not abuse the terms of sale. Credit’s role with established credit customers Another positive, pro-sales technique is to stress the service that the credit department can offer the customer. The customer may not really be aware of the “helpful” side of the credit function. Some of the services the credit department can offer are listed in Figure 17-2, Customer Assistance Credit Services, Page 420 of the text book. These services include: Financial Analysis Cash Flow Control Credit References Loan Referrals
  • So far, this chapter has discussed the ways sales people can work together with the credit staff to enhance the credit function. Most of the material has dealt with what the sales staff can do to help the credit staff, however, a true partnership benefits both parties. The chapter concludes by discussing many practices that Credit can employ to further develop the credit and sales relationship. Review the comprehensive list on Pages 420-421 of the text book
  • Customer Visits

    1. 1. Customer Visits Chapter Sixteen NACM
    2. 2. Learning Objectives <ul><li>Objectives of a customer visit </li></ul><ul><li>What to observe and ask about during a customer visit </li></ul><ul><li>Customer visit: sales, customer service, credit </li></ul><ul><li>Preparing for a customer visit </li></ul><ul><li>Importance of follow-up after a visit </li></ul>
    3. 3. Customer Visits <ul><li>Objectives of Customer Visits </li></ul><ul><li>Customer Education and Best Practices </li></ul><ul><li>Account Status and Collecting Money </li></ul><ul><li>Preparation </li></ul>
    4. 4. Objectives for Customer Visits <ul><li>Building Relationships </li></ul><ul><li>Observe the Facilities </li></ul><ul><li>Discuss and Review Financial Information </li></ul><ul><li>Develop Interaction, Resolve Disputes </li></ul>
    5. 5. Customer Education and Best Practices <ul><li>Sharing Successes and Best Practices </li></ul><ul><ul><li>Provide suggestions </li></ul></ul><ul><ul><li>Share what works well </li></ul></ul><ul><ul><li>Strengthens customer/supplier relationship </li></ul></ul>
    6. 6. Account Status and Collecting Money <ul><li>Collection of Payments </li></ul><ul><ul><li>Advance preparation is key </li></ul></ul><ul><ul><li>Set the tone </li></ul></ul>
    7. 7. Preparation <ul><li>Preparing for Each Visit </li></ul><ul><ul><li>Written agenda </li></ul></ul><ul><ul><li>List of questions </li></ul></ul><ul><ul><li>Time frames </li></ul></ul><ul><ul><li>Participants </li></ul></ul>
    8. 8. After the Visit <ul><li>Follow-Up is Critical </li></ul><ul><ul><li>Make meeting notes with outcome and decisions </li></ul></ul><ul><ul><li>Document in customer file </li></ul></ul>
    9. 9. The Credit and Sales Partnership Chapter Seventeen NACM
    10. 10. Learning Objectives <ul><li>How credit can be a sales tool </li></ul><ul><li>Use of credit information prior to selling </li></ul><ul><li>When to consider special credit terms </li></ul><ul><li>How the credit staff can help customers </li></ul><ul><li>How credit contributes to sales department </li></ul><ul><li>How sales contributes to credit department </li></ul>
    11. 11. The Credit and Sales Partnership <ul><li>The Basis for the Sales-Credit Partnership </li></ul><ul><li>Promoting the New or Potential Customer </li></ul><ul><li>The Established Customer </li></ul><ul><li>The Credit Department’s Contribution to Sales </li></ul>
    12. 12. The Basis for the Credit-Sales Partnership <ul><li>Credit as a sales tool </li></ul><ul><li>The “Cs” of the credit-sales partnership </li></ul><ul><ul><li>Cooperation </li></ul></ul><ul><ul><li>Communication </li></ul></ul><ul><ul><li>Courtesy </li></ul></ul>
    13. 13. Promoting the New or Potential Customer <ul><li>Two kinds of customers </li></ul><ul><ul><li>Well-known, established </li></ul></ul><ul><ul><li>Newly established </li></ul></ul><ul><li>Investigating Potential Customers </li></ul><ul><ul><li>Check credit before making initial contact </li></ul></ul>
    14. 14. The Established Customer <ul><li>The role of sales with established customers </li></ul><ul><li>Credit’s role with established credit customers </li></ul>
    15. 15. The Credit Department’s Contribution to Sales <ul><li>Developing the Credit/Sales Relationship </li></ul><ul><li>Prompt service/action </li></ul><ul><li>Assisting and educating customers </li></ul><ul><li>Up-to-date information about accounts </li></ul><ul><li>Pro-sales attitude </li></ul>
    16. 16. End of Session