After placing an order with Domino’s, do you track the status to check whether the pizza has been taken out from the oven or it is already with the delivery boy? Everyone who orders a pizza does the same. It could be your colleague in the credit department or someone from the accounts payable team of your customer.
The question then is, if Domino’s provides this user experience to everyone, can’t credit teams offer similar levels of visibility with credit reviews, customer onboarding, and credit blocks? A simple answer to that is yes.
This blog explains the challenges with credit operations that prevent the same level of user experience while also helping credit teams identify areas to improve.
Customers are often treated as ‘debtors or delinquent accounts’ and not ‘customers’ by the credit department, whereas, any quick-service restaurant would treat customers as kings. Also, each credit analyst usually has hundreds of customers in her portfolio and when you add the combinations that result from new credit applications, credit reviews and blocked order, the volume of work often is a roadblock to providing real-time visibility.
The former has to be addressed with culture change, while the latter needs a thorough implementation of systems and service level agreements.
Will all of this guarantee 100% visibility? It may not but at least as long as there are defined worklists for credit analysts and defined SLAs, exceptional cases could always be handled by communicating about the reason for delays. After all, doesn’t domino’s always do this while informing us about possible disruptions that could result in not honoring the 30-min delivery time?
While ordering a pizza, customers appreciate the variety of crust, toppings as well as the size. Isn’t credit application similar? After all, no one customer is similar, there are large ones and small ones, one might be a Spanish customer while the other is English. Configuring the online credit application with 1) mandatory fields 2) bank and trade references 3) tax exemption certificate and others will go a long way in the turnaround for the customer to get back with the details.
Instead of painting every customer with the same brush, it is better to categorize every customer into various risk categories; then the analysis becomes comparatively easier. How often does your team review the payment history of customers and accordingly modify the cadence of credit reviews or offer a pre-payment discount?
This is not dissimilar to Domino’s coupons that often say “hey, you have been a great customer, here’s 20% off on your next order. Redeem before so and so date.
We briefly discussed this before but one of the biggest areas where credit teams could learn a lot is visibility. The biggest hurdles to getting visibility in credit operations are 1) Ad hoc assignments 2) dependence on credit analysts to prioritize items instead of a system that automates work priority 3) lack of clear SLAs.
By tracking operations relating metrics including time taken to complete a credit review/review new credit application, number of reviews completed per analyst per week and a cumulative number of items for review in any given week, credit managers could define and update SLAs. A comprehensive credit dashboard is of utmost importance to credit teams to improve visibility and customer experience.
Maybe, even credit teams could send notifications about the entire process including acceptance of the credit application, approval of credit limit, exhaustion of credit limit, processing of blocked orders. It works similar to how the pizza lovers get to know when the pizza is baked in the oven and when it is out for delivery etc.
Domino’s pizza across the world is widely different depending on the local tastes and preferences. Could the credit teams take a similar approach?
What if you make your customers fill the online credit application form in their native language or documents such as the credit terms are also translated to their native language?
This adds a personal touch which will always keep your customers happy, so give it a thought!
Would you eat a pizza that is not fresh out of the oven but gets delivered to you leisurely two hours after you order? Domino’s 30-minute delivery is centered around the customer preference that we just discussed.
Similarly, customers could get irritated when their credit application takes too long to get approved as they too need to produce something with the raw material that you provide. They also have to deliver to their end customers on time and cannot risk disruption in operations. They might very well go to your competitor and that is a revenue loss for the company.
Those were the five ways trade-credit teams could get inspired by Domino’s. Looking for more information on how to simplify credit management and ensure world-class customer experience? Download the ebook, where we list down the five common workflows in credit management to streamline operations.
HighRadius Credit Software automates the credit management process, enabling credit managers to make highly-accurate credit decisions 2X faster and enable faster customer onboarding with 4 primary components: configurable online credit application, customizable credit scoring engines, credit agency data aggregation engine, and collaborative credit management workflow. Along with that, there are a lot of key features that should definitely be explored some of which are online credit application, credit information aggregation, automated credit scoring & risk assessment, credit management workflows, approval workflows, and automated bank & trade reference checks. The result is faster customer onboarding, better internal collaboration, higher customer satisfaction, more targeted periodic reviews, and lower credit risk across the company’s customer portfolio.