I remember a conversation our owner had with a salesman years ago about collections.
"You have to close the sale," he told the salesman. They were discussing a customer's latest project–a large custom-built home.
"I did close the sale," the salesman answered.
"Oh good," the owner replied, surprised. "When did you do that?"
"Three months ago," the salesman answered, bewildered. The owner knew he sold the job.
"Three months ago? Are you sure?"
"Yes." Of course he was sure. That job had made his quarter.
"Let me see, let me see," the owner said, shuffling through some reports on his desk. "I see we shipped an awful lot of material to that job about three months ago ..."
"... when I closed the sale," the salesman finished the sentence.
"Three months ago."
"No, no, no," the owner said, shaking his head. "That's when you opened the sale."
"Opened?" the salesman asked. "How do you open a sale?"
"You ship out material."
"That's when you close it."
"Close what?" the owner asked.
The owner had a good laugh over that one, which bewildered the salesperson.
"Let me tell you what I think 'open' means," the owner said after he stopped laughing. He went on to wax poetic about the word "open." He spoke of open fields, the open ocean, open opportunity lying before us all. It was very uplifting.
But then it took a turn. "Open also means vulnerable. Open is exposed. Open is unpaid," he said ominously.
In the owner's mind, the sale started when we shipped the material, when someone had our stuff on credit. He had no sympathy for the salesman's viewpoint–that the sale is open when you initiate contact, begin collecting information and specifications, and negotiate price. To the owner, all that work was what you did to open a sale.
"Now, think about closed!" he exclaimed. "Closed is secure, safe, protected ..."
"... paid," finished the salesman. The owner smiled.
The salesman had been rightfully proud of the job he did making that sale–"opening" the sale in the mind of our owner. But the customer's account was 90 days past due. The owner was explaining to him why he, the salesman, would have to actively work on getting the account current, a notion that the salesman had, predictably, been resisting.
The salesman wanted to reserve his pleasant relationship, arguing he would be able to "close" more business, which the owner thought of as "opening" more business, which he didn't want until the old business was closed–his way.
In the end, the owner won out. And not simply because he was the boss.
The fact was the salesman was the right person to talk to this customer. He had done a great job getting to know the builder and had close relationship with him. He was the right person to discuss openly and honestly with the builder about the past-due account.
I think about that view of "open" and "closed" a lot as we struggle through this recession. Now more than ever, every resource available needs to be used to keep accounts current the money coming in the door.
It doesn't matter how many orders you write, how much material you ship, or how much customers like the salesmen. If the accounts aren't current, the business will be closed–as in no longer open for business.
Tad Troilo is a manager for Cranmer's Kitchens by Design in Yardley, Pa. 215.493.8600