Get to know your customers & keep them buying

Know your customer... version 1

Back in the early nineties’ we traded with a reseller based in Leeds on a relatively low credit line of £10,000 but pressure in flow of orders and a desire to increase purchases via our company necessitated consideration of an increased £50,000 credit line.

Payment was never an issue and while the required line fell below our non-qualifying insurance loss level, we had to fall back on the quality of financial information and data from other known suppliers.

The company at the time traded from within the premises of a Dairy company based in Northern Leeds called Leeds & District Dairymen. It chose to use the first three letters of the dairy company name but was totally unconnected. This was indeed one reason why it was pressured in getting credit from other suppliers; one, somewhat fastidiously, insisted it was a dairy company and refused to supply them.

Interim management data was a mess with bits missing and no real credence could be placed upon this so one option was to visit and get beneath the surface of the business, meeting with owners.

A day out to Leeds up the M1 is not an option easily taken but something about the conversations I had with the two directors pushed me to make this journey and I’m grateful even now that I did.

With no navigation, it took me a while to find the place but all I had to do was ask for the Dairy. I parked up outside and was met by one of the directors who suggested I park the car inside the dairy if I wished to find all wheels intact on my departure. I guessed this was a tough area but not that tough…! They opened the entrance and I parked up unsurprisingly, against a couple of milk-floats.

I’d interrupted coffee and donuts and was relieved to have them share these offerings.

They occupied just two small rooms within the dairy company, a pretty useful arrangement given their early activities and employed just a handful of people. It was really a case of getting to know them, their background, their decision to set up, their plans and intentions, their history, their current performance and management of the business.

I was once told by an old business colleague of mine way back in the seventies that Yorkshiremen were as straight as an arrow in terms of integrity and as conversation flowed, I certainly began to feel these were people I could trust implicitly. They showed me their internal operating systems and even their accounting package, an early bespoke piece of software but not perhaps the best on offer. The system outlined and included everything at cut off and the trial balance figures were up to date and correct. The problem was that when they hit the button to create the profit and loss and balance sheet for the period, the programme simply refused to spit out the right figure, hence the presence of gaps in interim management data and balance sheets that did not balance.

Some three and a half hours later, armed with their trial balance, suitably loaded with donuts and coffee and with a promise they’d refrain from sending me further management data with gaps until they had fixed the bug, I left them with the £50,000 credit line they wanted.

It took them almost a year to start supplying interim management data that was accurate and complete but the trial balance position was enough to convince me of their progress despite me having to manually create their profit and loss and balance sheet every month.  Business boomed upward and I visited them at least three to four times after this over the years, increasing the credit line as required. Communication was regular as was the provision of interim management data. We even found the time to discuss their company re-structures and intended acquisitions along the way and this is a key crucial element in trading relationships, in other words their willingness to talk to me about them and additionally, ask for my view and opinion. I always viewed this as justification that my approach to meeting clients and always staying in touch was the correct one.

The company that once refused them credit saying they were a dairy company relented and the business has grown successfully over the years. They are now into their 21^st year. Sadly, as their credit lines opened up elsewhere and people moved on within our own sales and their buying teams along with changes in their direction, business volumes tailed off a bit but the relationship with Credit still held strong.

Credit must be proactive in touching clients. The greater the number of touch points a supplier has with a client the stronger the relationship is. Sales people move on, as do those in marketing and your own directors may never get to meet theirs beyond occasional annual conferences. They rarely therefore get the opportunity to establish close links or have real empathy and knowledge of a client’s pains and pleasures, hopes and aspirations or moans about current trading. Credit is wonderfully placed to act as a conduit into ones organisation through which real tangible data can flow to enhance growth and profitability for both client and supplier.