Prequalify for best results
Website design By BotEap.comSales reps and vendors spend a considerable amount of time and money to identify and get in front of the right prospect. The opportunity to interact directly with a potential customer is often seen as a win in itself, but many salespeople fail to gain valuable insight into the customer’s ability to pay for their product or service during that encounter.
Website design By BotEap.comA sales meeting, whether in person or over the phone, is an opportunity to listen to customers’ needs and identify which product can solve their problem. The rest of the meeting is dedicated to how many benefits your solution offers and all the other little advantages it will provide that they didn’t even know about. Running a close, well-orchestrated sales meeting with a spontaneous feeling of confidence leaves a positive impact on both the prospect and the salesperson, but you need to qualify the customer’s ability to pay for your product on some level for your mission to be complete. .
Website design By BotEap.comA financial prequalification means that your prospect not only has the desire to buy your products, but also the ability to pay in cash or by financing the transaction. It is understood that a sales person or supplier should never be in a position to ask for sensitive financial information, such as tax returns or personal financial statements, but there are other key questions to ask that will give you a good idea of your ability to pay. You want to know this information because whether they pay cash or use financing will affect the flow of the transaction.
Website design By BotEap.comMarginal ability to pay means that if they decide to pay in cash, you may want to get a larger down payment or 100% prepayment before goods are delivered. You’ll also want to keep all your documents in order, including signatures and proofs of acceptance in case there is any future litigation. Marginal credit will also have trouble financing your product, so if they decide to go this route, you should call your financial agent to get quick access to the situation and not spend time and money pre-ordering merchandise that may be cancelled.
Website design By BotEap.comAs you can see, it’s in your best interest to assess, even at a superficial level, the credit quality of the business you’re committing to. That way, you can decide whether or not you want to do business with them and what collateral you need to take. Here are some simple key questions a sales rep can ask, including what the answers mean; These questions are not intrusive and if your prospect is having trouble answering them, you better move on to the next customer.
Website design By BotEap.com1) How long have you owned this business?
Website design By BotEap.comLess than 2 years old and you have instability problems and increased risk. It doesn’t matter if the business is 50 years old; You want to know how long that specific person has owned because success will be determined by their own style of ownership.
Website design By BotEap.com2) How has the business and sales been in the last two years?
Website design By BotEap.comLandlords usually open up and say, “It’s been great” or “We had a few bumps along the way,” which means your Paydex score may show slow payments to your creditors. If they have done very well, the owner will usually brag about it, if not, he will listen to excuses; this question often urges people to open up a bit.
Website design By BotEap.com3) Do you handle your bookkeeping in-house or have a company do it for you?
Website design By BotEap.comInternal handling of accounts can mean things are not reported correctly, especially when a family member is the bookkeeper. External accounting services are often highly organized and follow accounting rules more closely and those statements may be more reliable.
Website design By BotEap.com4) Have you had a loan or financed anything in the past?
Website design By BotEap.comWhether they want to pay cash or use financing, this is a great question because if they’ve gotten any type of loan in the past, it means they’ve been approved as an acceptable credit risk, which is a green light. But if they’ve never financed anything before, then they’re either too new, their business is stagnant and not growing, or their credit is bad. When a landlord tells him he pays for everything in cash, keep his radar on.
Website design By BotEap.comSimple pre-qualification questions can give you an initial idea of a potential customer’s credit and financial worth. Then it’s up to you how you want to interact with them and what level of risk you’re willing to accept. Many vendors will ask for business references no matter how the customer chooses to pay, which is another step that can be taken; other providers require 100% upfront payment and in certain industries can get away with this. But as a rule of thumb, you’ll want to pre-qualify every customer and follow whatever guidelines are appropriate so you can close more deals and reduce bad debts and experiences.