Member Article

How social engagement can streamline cashflow

By Craig Evans, Head of Business Development at Graydon

Social selling creates great personal relationships with key business contacts that can improve cashflow_, boost sales and improve market intelligence. Using LinkedIn to create relationships between credit controllers and credit managers not only improves_ cashflow – it can help with sales as well.

‘Cold calling’ is an increasingly appropriate name for the sort of out-of-the-blue intrusion that’s probably been with us ever since Alexander Graham Bell invented the telephone. Not only is its reception usually far from warm – it’s now pretty much dead as well. One of the final nails in its coffin has been the rise of the discipline known as ‘social selling’ – interacting directly with contacts via social media to create a dialogue that evolves into a long-term and loyal customer relationship.

Warmth matters

But, in my view, calling this kind of contact ‘social selling’ is actually to restrict its value. The benefits can extend far beyond the sales arena into just about every area of business life where strong (and warm) relationships are important. Take, for example, the credit-control and management functions. As anyone who’s ever issued an invoice knows, written payment terms are all too often seen by one side as a vital part of the contract and by the other as a mild irritant that exists only to be ignored. As a credit controller seeking settlement, there are few sure-fire ways of getting your invoice to the head of the payment queue, on time every time. By far the most effective is to have a positive and open relationship with the person who ultimately decides which invoices are settled on which payment run.

Barriers to access

But it’s often far from easy to gain initial access to this individual. For a start, large companies will often have five or six people who are directly involved in the payment process. And reaching any key decision-makers will certainly not be made easy – they’ll be surrounded by technological and human barriers, part of whose job is explicitly to prevent such contact. So by the time you need to chase payment or renegotiate credit terms, it’s often far too late to achieve anything by picking up the phone. Nine times out of ten, you should have started far earlier – long before the invoice in question was issued in the first place. And, besides, you should have used social media - usually LinkedIn. LinkedIn is particularly useful because it gives you multiple points of entry into an organisation, enabling you to bypass the guardians and get straight to the purchasing people who matter. Shared benefits If you get the balance right, it’s also an excellent mechanism for creating something close to friendship with these decision-makers, long before they have influence over your contract negotiations or paying your invoices. The key is to ensure that the benefit goes in both directions. That means finding out what matters to them, contributing to the debates they’re involved in, and providing them with data and commentary that can help them in their roles. In other words, creating a relationship that’s as valuable to them as it is to you. As already discussed calling this approach social selling was limiting. But that’s not to say that it doesn’t also have a strong sales task to perform beyond selling the benefits of dealing with you and your organisation. Good credit managers often regard credit controllers as customer experts who really know what’s going on in the market place. A strong ‘finance-to-finance’ social-media relationship can provide a relaxed environment in which even the most commercially-minded supply chain managers are less cautious and more receptive than when talking to a salesperson. That means they’ll often be open to hearing key nuggets of company, product or market information that they can feed into their sales teams. It also means they’re more likely to take on board and share positive messages about your company than is the case in a more traditional sales setting.

Comparing notes

Using social media isn’t all about one-to-one relationships, however. Again, LinkedIn is particularly useful for sharing experiences and knowledge with your peers right across your industry. Doing so enables you easily to compare notes about particular difficulties you may have had with individual companies and exchange ideas with one another on how to cope with them. In essence, it’s not unlike the established concept of a credit circle where members help protect one another against payment issues by sharing information on companies’ creditworthiness. Where credit circles tend to be scheduled for set times, this virtual approach means that credit controllers can get up-to-date, accurate information at the moment they need it. As an adjunct to a credit report, it can be an extremely useful way of protecting your company’s cash flow.

This was posted in Bdaily's Members' News section by Credit Industry News .