Paddi Pages E-Zine - Issue #6
Forgiving Debt - One of the Best Ways to Brighten Your Work Day!
An eye doctor client of ours, Lil from the United States, recently asked,
ďI need to get rid of some of my bad debt! How did Paddi do it?Ē
Lil started her practice three years ago, and had just finished reading Paddiís book on selling, money and debt, The Secret World of Customers Who Love to Pay, hence her question relating to Chapter 5.
Lilís question reminded me that Paddiís system for handling overdue accounts is one of the more original approaches youíre ever likely to see! So I thought Iíd share my answer to her question with you here in this issue of the Paddi Pages.
You might recall one of Paddiís 7 Key Frustrations,
------------ Key Frustration #6: Money & Bad Debts------------
Paddiís Accounts Receivable was out of control!
As if it wasnít enough that Paddi practically had to twist peopleís 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 heíd promised, expecting to be heaped with praise, only to find that months later many still hadnít paid their account and seemed to be finding all sorts of reasons why they shouldnít.
A ballooning accounts receivable was giving Paddi ulcers. Plus, the more he had to Ďsellí patients into the work, the more they seemed to find reasons not to pay the bill.
It was demoralising! But thatís just business, right? Or is itÖ
In turning his business situation around, Paddi completely changed the way he handled the money. Now thatís not the subject of this edition of the Paddi pages, but I wonít 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 Paddiís new system wasnít adding to his accounts receivable, so it fixed the problem going forward, but that didnít help with the money he was still owed. He had to find a way to sort out the hundreds of $1000ís that was still outstanding Ė yes, it was that much! And thatís 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 hereís where it getís interesting!
Just writing the bad debt off in the books (and never talking to that client again) wasnít enough to assuage Paddiís soul. He just couldnít 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 Ö made out to himself!
Strange, huh? But hereís the kicker. As Paddi recallsÖ
ďAll 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 theirís,
not my own. I wished at the time that I had done it sooner!Ē
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!
If youíd like to read what Paddi wrote in that letter (you might just have a situation similar to Paddiís!), Iíve placed a copy on our website on a Secret Page only visible to Paddi Pages subscribers.
Plus on that page Iíve also posted a full excerpt about this subject from Paddiís Advanced Manual, The Secret of Customers Who Love to Pay. I hope you enjoy it!
Next issue Iíll be taking a different tack. How would you like to experience walking through the door as a new customer at Paddiís practice? Well Iíll take you through his entire customer experience step by step.
Youíll be inspired with the choreography and attention to detail. It leaves most customer service gurus astounded with itís beauty. Until then,
Solutions Press Business Publishing
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