6 Ways to Proactively Raise Cash
Originally published: 06.01.10 by Ruth King
Making calls to past-due customers, former customers, and happy customers helps to keep the cash flowing.
I want to share a story that I heard in an audio CD series, Increasing Wealth and Prosperity, by Frederic Lehrman. Lehrman talks about a client who owed him about $3,000 for more than four years. They were still in contact, and it was always something between them.
One day Lehrman called the man on the phone to discuss payment of the bill. His client started to give him an excuse. Lehrman stopped him and said, “I’m not asking for $500 today, not even $100. Can you pay me $50?” His client couldn’t. He could pay $20, a bill that he had in his pocket. Lehrman got him to get an envelope, address it to him, and put it in the mail that day. When Lehrman received the $20, he sent a thank you note and enclosed another prepaid envelope.
Lehrman asked him to put another amount in the envelope. His client did. This process continued. Sometimes there was $5 in the envelope; sometimes there was $50 or more in the envelope. In less than a year the entire amount was paid.
So, if a customer owes you money, ask him if he can pay $20. Most people can pay at least that amount. When you receive
Here are other activities that help you to raise cash:
1. Go through your tickler files for work that was recommended to the customer, but that the customer declined when your technician was at her home. What if the repairs are significant? They might have been declined because of the inability to pay for them. Offer them in-house financing.
There is a program that gives up to $5,000 financing for up to 90 days with no credit checks and no recourse to you. The customer writes all of the checks at once, they are scanned into a software package, and they are deposited on the dates of the checks. This program has been working in industries other than ours for over 18 years and is backed by a $1 billion company. I did a video about this on HVACChannel. tv. (For more information, contact Tom Mulligan at 386-986-8933.)
2. Work out an agreement with restaurants for gift cards in exchange for maintenance. You need gift cards for your referral customers. Restaurants need maintenance. This is the perfect exchange and will save you the cash expenditure. In addition, the restaurants get new customers who usually spend more than the gift card. You get maintenance and the repair work.
3. Call your maintenance agreement customers who have not renewed in the past two years. Offer a special for past customers to get back into their homes. Have the technician inform your customers on the need for maintenance when they are at the customer’s home. When the customer renews the maintenance agreement, the technician gets a SPIFF for that renewal. You get the cash.
4. Call your current maintenance agreement customers and talk with them about additional products that can help them be more comfortable in their homes. This can include inroom and whole-house UV lights, other IAQ products, and more. Make sure this information is on your Web site.
5. Talk with customers who have trusted large projects to your company. Make sure that the customers are happy with the work that was done. Resolve any problems immediately. With happy customers, ask, “Who have you talked with about your new (name the project)?” Human beings are social creatures. Your customer will have told someone about her new system. Others may have the same need and mentioned it to your customer. You’ve jogged the customer’s memory and might get a referral.
6. Keep your employees happy. Although this is not a marketing activity, it affects marketing and sales. A happy employee will answer the telephone in a positive manner. A happy field employee will be more pleasant on the job. Customers can sense when an employee is happy. And, happy employees lead to happy customers, who spend more. You’ll notice that most of these activities (including Frederic Lehrman’s story) say “call” rather than “send a postcard.”
Calling is more proactive than sending a direct mail piece. By calling, you have direct contact with your customers, and you can answer any questions immediately. The first few calls are the toughest. Once you get into the habit, you’ll enjoy talking with your customers and helping them to be more comfortable in their homes. And you’ll have more revenue (cash) from sales!
Ruth King has over 25 years of experience in the hvacr industry and has worked with contractors, distributors, and manufacturers to help grow their companies and become more profitable. She is president of HVAC Channel TV and holds a Class II (unrestricted) contractors license in Georgia. Ruth has written two books: The Ugly Truth About Small Business and The Ugly Truth About Managing People. Contact Ruth at email@example.com or 770.729.0258.
Articles by Ruth King
Keep Your Money Safe
Keeping your hard earned money safe is your responsibility. Put the procedures in place to keep the honest people honest and protect yourself from employee embezzlement.
Protect Yourself Against Employee Embezzlement
If you don’t have systems in place, it’s easy for a stressed out bookkeeper or stressed employee to get tempted. They make stupid choices they never would when thinking rationally.
Your Inventory Days Ratio: Do You Have Too Much Inventory?
Your Receivable Days Ratio: Do you have a Collection Problem?
Your Compensation Percentage: Are Your Employees Productive?