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Credit and Collection Letters 1

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CREDIT AND COLLECTION LETTERS 1. Highly specialized letters.—Credit and collec tion letters are perhaps the most highly specialized of all types of correspondence. For many years it has been the universal practice to give a great deal of careful attention to this class of letters. In the past, when selling was relatively easy and satisfactory ad justments were not considered as important as they are now, and when competition for business in all lines was not as keen at it is today, the credit and collection problem was relatively greater than it is now, since more efficient cooperation in credit and collection ma chinery is at present available, and especially since business men today expect a more strictly businesslike treatment at the hands of credit and collection mana gers. Even tho credit and collection correspondence has been established in the business field longer than other specialized types, and notwithstanding the fact that more has been written on this subject than on any other type of letters, except sales letters, yet there are few credit and collection managers who feel at all satisfied with their skill in writing the kind of let ters they wish to write.

2. General purpose of credit and collection letters.

The first thing to be considered in writing effec tive credit and collection letters is the close relation they bear, not directly to sales, as in the case of ad justment letters, but to profits. The primary aim of these letters is to protect profits by securing payment for goods which have been bought and delivered, and to do this with the least possible expense and at the same time to exert the best possible influence on sales. The influence on sales, however, is a secondary consideration, altho it is, of course, desirable that a credit letter or a collection letter help the sales de partment as much as possible. Effective credit and collection letters are successful by virtue of the good salesmanship exercised in writing them. But writing a letter in which the principles of good sales manship are incorporated as the means of making it effective, and writing with the direct influence on sales uppermost in mind, are not one and the same thing.

The primary task of the credit or collection corre spondent is to prevent loss from bad debts after sales have been made. Credit letters look forward and col lection letters look backward, so to speak, with re spect to guarding against loss. The purpose of both is primarily negative and defensive, altho this purpose may be accomplished by means of the application of positive selling principles. The purpose is preven tion of loss. This fact is too often lost sight of by the modern credit or collection correspondent, who is inclined to make too great an effort to avoid undesir able effects on sales in his attempt to protect profits, in so far as profits depend on the prompt payment of accounts. He therefore often falls into the error of being too diplomatic.

3. Being too diplomatic a view of the fact that credit and collection correspondents very often have to deal with delicate situations it is only natural that they frequently carry diplomacy too far. Letters that are obviously diplomatic, like adjustment letters that are obviously courteous, are the least effective. In other words, here is another case of the misapplication of a rule, which serves to explain why it is often said that one cannot write effective let ters merely by following set rules. Sometimes a let ter is best when it calls a spade a spade, and appar ently makes no attempt to be diplomatic. In such a case the reader is usually impressed with the sincer ity and honesty of the writer. Those qualities com mand respect.

Here is a letter, for example, the writer of which did not command respect. He refuses shipment to a merchant whose credit standing is doubtful, and at tempts to get him to agree to cash terms.

Dear Sir: As you know, it is customary in all big wholesale' houses to look up the credit rating of new customers before ship ments are made on the credit basis. You, no doubt, do the same with your own new customers. Therefore we are de laying shipment on your valued order until our reports are complete.

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