Handling delinquency

It's a reality that every business needs to face. We all have to handle delinquency. I am luck that the number of delinquencies are fairly low but they do come up and every time seem to cause problems and wasted times.

Recently, I had to cancel my business credit card and wait for a new one because of some unauthorized usage. This caused some of my vendor accounts with automatic transactions to become delinquent. I found that one association that I was a member of had a particularly effective, hand off approach to handling delinquency. Since then, I created my own hands off system that consists of multiple e-mails, letters, and voice broadcasts.

Here's the keys to handling delinquency
1. Be nice - I wrote letters that convey a kind image and politely tell them that we realize it must have been an accident. As I get to 60 days past due, the letters are still nice but that it may effect their credit score.
2. Hit them often - If you pace it write, you should be able to hit them every five days.
3. Use as many methods as possible - Some people respond to different sources. You can use e-mail, fax, mail, and voice broadcasts. I will give a sample of our schedule.
4. Give solutions - In our case, we allow them to mail, e-mail, or stop at our front desk. You could also offer a secure website to go to pay off the deliquency.

Creating a schedule is fairly simple, we basically use the same letter for all sources. For example, we send an e-mail on day 1. Day 5, we send the same letter by mail with a membership change form. By Day 10, we do a voice broadcast reading the same letter. On day 15, the letter's tone changes slightly and the process is repeated like above.

We created this system so that we let the client know that we didn't forget and hit them enough that they take action.

Saying "No" is a positive thing in business

The ability to say "No" is a great technique that has many positive benefits in your business. Your ability to say "No" will contribute directly to your bottom line.

Some benefits of saying "No"
1. Defending yourself against paying for unnecessary services - I have let some convincing salesman get me to accept their services only to find later that the service wasn't worth it or I didn't need it. If I had said "No" to begin with I would have saved money and the time it took to cancel the service.
2. Save money on service you want - Sometime, saying "No" can lead into discounts and other favorable desperate measures. This works great for getting discounts on advertisements and some services.
3. Saves time - Many times, I want to say "No" but deferred making a decision, by saying that I'll think about it. This just opens the door for more time wasted. It's easier in the long run to say "no" right away.

Have standards and criteria for say "Yes". Here's mine criteria.
1. If it doesn't save time or money, the answer is "no".
2. If it doesn't help increase revenues, the answer is "yes".

Now, we must be careful because it's easy for some coaching program to say they will increase your revenues or some advertisement to bring in clients. You can test these out but before starting, decide on methods and measure their performance. Fire them, if they don't perform.

The Lawn Mower Story

I have an interesting story about my neighbor and his lawn mower. I feel this is a great analogy on personal effective and time management.

Our neighbor's lawn mower hasn't worked correctly for over a year. It sounds like it needs a tune up and constantly stalls. We have about the same size lawn that takes me less than an hour to mow. Because of the problems with his mower for the last year, he spends over 4 hours trying to finish his mowing.

He also spends additional time tinkering with the mower to get it to work. I joked with him, "It sounds like it's time to take the mower for service." He said, "Oh, it's old and I tried to fix it. We need a new mower."

My wife talked to his wife. We found that mowing the lawn and fixing the mower was a great accuse to get out of the performing more important activities around the house.

So how does this apply to our business and our lives?

• How many times to we waste extra time because of ineffective habits or poorly thought out business processes? This is a killer on time. I run my business through checklists and prepared presentations. Since I know exactly what needs to be accomplished and I can do it right away without hesitation, I save tremendous amounts of time. Also, Never let an easily fixed problem create extra work.
• What things are we wasting money on? My neighbor jumped to a conclusion that getting a new mower was the answer with finding out the extent of the problem. This mistake could have cost him an extra few hundred dollars. Get the mower properly tuned up by a professional is very inexpensive. If the professional tell you that you need a new mower then you know it's time.
• How many times do we pick unimportant activities over important activities? This is a killer in business. Most business owners experience the E-myth's "entrepreneur seizure" and work in the business instead of working on the business.
• How many times do we let poor motives undermine our success process? I find this is the number one reason that most people spin their wheels in life. They focus on wrong things. They let their self-limiting beliefs guide them. They defend their right to going nowhere and living poorly.

Don't let you life become like my neighbor and his lawn mower.

What do you do for a living?

What do you do for a living? This is a common question someone you just meet will pose to you. Most people will answer back with a job title or their business name, but this is a perfect opportunity for you marketing yourself or your business.

Every business and employee on the fast track to success should have answer to this question that serves three purposes. First, create a positive image in the person's mind. Second, describe our jobs or business's benefit to a potential client. Third, be specifically targeted towards your best customer. If you're a business owner, we could add a four point which is make an offer.

Here's an example of what I say to people in they asked me what I do for a living.

"Well, have you every met a child with that gleam of confidence in their eyes? You know, that child that seems to have it all together – they’re able to communicate well, they are disciplined and responsible enough to get things done without being told, other seem to follow them because they are natural leaders. Just looking at them, you know, they’re bound for great success in college and their future career. Do you know a child like that?

Well, I teach at Maximum Impact Karate and that’s the type of student that we create at our school. We teach the success skills through karate that you don’t learn in school. Would you like to hear more about it?"

This pitch needs to be practiced to the point that you say it naturally and automatically. So what's your pitch?

Biggest Marketing Mistakes in a Down Economy

Everybody has heard the news about the economy. It has struck fear in most people and business owners. In talking to most of my business owner friends, they are cutting expenses. Our business has been doing extremely well because we threw more money into our marketing efforts. During a down economy since most business owners are cutting marketing, your ads become more noticeable with less competition and cheaper as advertisers become more desperate for business.

Here's a list of three of the biggest marketing mistakes

1) Poorly Written Ads - Nothing is more expensive than a poorly written ad. A poorly written ad is a total waste of money. I squeeze four things into my ads to make them effective - Strong Headline, Body explaining how we can solve a specific problem, A call to action or offer, and testimonials

2) Lack of Consistency - Mistake number two is a lack of consistency. I've seen many business owners run an ad once and quit thinking that it doesn't work. Most prospects need to see advertisement 5 to 7 times before they take action.

3) Cutting Marketing Budget - In a poor economy, most businesses are tempted to cut their marketing budget. Cutting your marketing budget makes you almost invisible to your prospects, not a good thing in a poor economy. You should increase your marketing during a down economy to ensure that you are touching the people that are likely to buy.

Through successful marketing, you will continue to attract a wave of new customers. Also, making sure that you track the success of each source. We use separate trackable phone numbers for each ad source.