Paddi Pages E-Zine - Issue #6
Forgiving Debt - One of the Best Ways to Brighten Your Work Day!
Dear Reader,
An eye doctor client of ours, Lil from the United States, recently asked,
“I need to get rid of some of my bad debt! How did Paddi do it?”
Lil started her practice three years ago, and had just finished reading Paddi’s book on selling, money and debt, The Secret World of Customers Who Love to Pay, hence her question relating to Chapter 5.
Lil’s question reminded me that Paddi’s system for handling overdue accounts is one of the more original approaches you’re ever likely to see! So I thought I’d share my answer to her question with you here in this issue of the Paddi Pages.
You might recall one of Paddi’s 7 Key Frustrations,
------------ Key Frustration #6: Money & Bad Debts------------
Paddi’s Accounts Receivable was out of control!
As if it wasn’t enough that Paddi practically had to twist people’s arms to accept his treatment plans, many people who did were really bad about paying their bills.
Paddi would do his level best work, often more than he’d promised, expecting to be heaped with praise, only to find that months later many still hadn’t paid their account and seemed to be finding all sorts of reasons why they shouldn’t.
A ballooning accounts receivable was giving Paddi ulcers. Plus, the more he had to ‘sell’ patients into the work, the more they seemed to find reasons not to pay the bill.
It was demoralising! But that’s just business, right? Or is it…
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In turning his business situation around, Paddi completely changed the way he handled the money. Now that’s not the subject of this edition of the Paddi pages, but I won’t keep you in suspense. He did that simply by asking for the money up front instead of rendering accounts. For more on how that works, you will have to be patient!
For now, suffice to say that Paddi’s new system wasn’t adding to his accounts receivable, so it fixed the problem going forward, but that didn’t help with the money he was still owed. He had to find a way to sort out the hundreds of $1000’s that was still outstanding – yes, it was that much! And that’s more than 15 years ago now!
Paddi exhausted all conventional efforts to collect these debts. He even tried handing over the problem to lawyers and debt collectors, but he repeatedly found the money it cost to pursue it was usually as much as the original bill! Plus he got heaps of bad press from angry clients!
So after much angst and worry, Paddi tried a different approach.
He decided to forgive the debts altogether! And here’s where it get’s interesting!
Just writing the bad debt off in the books (and never talking to that client again) wasn’t enough to assuage Paddi’s soul. He just couldn’t stand to have those ugly obligations left hanging out there.
So he wrote to those recalcitrant customers with a letter explaining why he was forgiving the debt, and attached a real cheque (his own) for the full amount owed … made out to himself!
Strange, huh? But here’s the kicker. As Paddi recalls…
“All my defaulting customer had to do was mail the cheque back to me
to cancel their debt. In this way they recognised my generosity (sic)
and sometimes it cancelled out their bad feelings towards me. But more
often than not, the cheque I received back in the mail was their’s,
not my own. I wished at the time that I had done it sooner!”
So in trying to forgive and forget the debt, Paddi stumbled on his most effective strategy for collecting it! Too bad he didn't need it any more!
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If you’d like to read what Paddi wrote in that letter (you might just have a situation similar to Paddi’s!), I’ve placed a copy on our website on a Secret Page only visible to Paddi Pages subscribers.
Plus on that page I’ve also posted a full excerpt about this subject from Paddi’s Advanced Manual, The Secret of Customers Who Love to Pay. I hope you enjoy it!
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Next issue I’ll be taking a different tack. How would you like to experience walking through the door as a new customer at Paddi’s practice? Well I’ll take you through his entire customer experience step by step.
You’ll be inspired with the choreography and attention to detail. It leaves most customer service gurus astounded with it’s beauty. Until then,
Kind regards,
Fletcher
Fletcher Potanin
Managing Director
Solutions Press Business Publishing
www.PaddiLund.com
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