Four ways your credit program can give you a competitive advantage

March 2, 2016 Tracey Richardson-Newton

Your products, pricing, and customer relationships are likely the cornerstones of how you attract and keep your professional customers. But have you ever considered how your credit program could provide you with a strong competitive advantage?

If you are like most building material suppliers, your credit program probably doesn’t make you think about growth and competitive advantage. In fact, it probably does the opposite—bringing on thoughts of restricted cash flow, investment constraints and the worries of uncollectible revenue. But it doesn’t have to. Consider these four ways your credit program can deliver a competitive advantage.

The building industry is getting back on track and many of your customers are looking to take on more and larger jobs. With this comes the need for larger lines of credit and longer pay cycles. By offering pros more of what they need, you’ll earn more of their business.

With in-house credit, you may not always be able to meet these credit needs. You could tap your bank line to free up the cash to fund it, but this could restrict your business investments in other areas. And, the additional credit exposure may increase your risk to a level that you’re not comfortable with or that could impact your profitability.

An option to consider is a professional credit management service that can offer larger lines and extended terms for your customers—without risk to you. Companies like BlueTarp provide credit services that include extending credit, billing services and collecting on invoices, while also guaranteeing your payments. You can get paid for every sale without having to wait 60 to 90 days or more—which means you can offer your customers what they need without draining your cash or taking on increased risk.

Your customers rely on you for your expertise and product selection—what if they could get more of both? If your team had more time to focus on helping your customers find the right products to meet their needs, they’d likely buy more from you. Likewise, if you could expand the range of products and services you offer, you’d be able to meet a wider range of their building needs and earn more of their spending.

Offloading work from you and your team will give you more time to focus on your business and your customers. How much time could be gained if you were not burdened with credit decisions, billing paperwork and chasing receivables? And how much more could you invest in your inventory and product selection if you could free up the cash you use to fund credit and reinvest it in your business?

Utilizing a credit management service allows you to focus on customer service and frees up cash so you can invest in inventory and new products. With credit checks, invoicing and collections off your plate, you and your staff will have more time to make sales and help customers solve problems. And with the predictable, guaranteed cash flow you’ll get from every sale, you can confidently invest in building inventory, product selection or hiring more sales staff.

Your pro customers are busy helping their customers, and they often struggle to find time to manage their books, pay their bills and invoice their customers. You can offer technology and services that will save them time and streamline their back-office. And when you help them focus on their business and its success, they reward you with loyalty and growth.

A professional credit service can provide you with web-based tools for your pro customers that let them create customized invoices and easily track and organize their job expenses. Your customers gain 24/7 secure online access to their accounts and the ability to pay when it’s convenient for them. And when you work with BlueTarp, your customers can also rely on the expertise of a customer service team that works exclusively with pro customers in the building supply industry.

A rewards program helps you thank your customers for their business and gives them more reasons to spend with you. But managing a rewards program can be time consuming and complex. Working with a credit service like BlueTarp makes it easy for you to offer enticing rewards such as adventure travel, sports packages and brand-name merchandise, without the overhead and expense. You can also pick which customers qualify for rewards, so you can use the program to drive spending with your biggest and most profitable customers
or to win new ones.

If you’re serious about sharpening your competitive edge, consider how a professionally managed credit service, like BlueTarp, can keep your customers coming back for more
by giving them more of what they want.

 

 

 

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About the Author

Tracey Richardson-Newton

Tracey serves as Vice President of Credit Risk Management, responsible for complete oversight of the credit risk management function as well as credit and collection operations.

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