Hey everyone -
I am looking for information on how you conduct your collection practices, and what kind of stipulations to put on any sales contracts that give you the right to collect past due payments for advertising that has already taken place. Any and all information would be greatly appreciated. I have been in my position of sales manager with my current station for about 8 months, and it's a unique station because we are a niche format of Contemporary Christian and we are run by a board because we are non-profit. In the past, our board of directors felt it was "un-Christian" to collect on payments that are past due, but I am trying to get them to see that we cannot possibly survive that way if we continue to allow people to advertise and then walk away.
Thank you everyone in advance!
Amy, I'm going to include this discussion in this week's newsletters, and I am looking forward to reading what our members have to say about this topic. In the meantime, here's an article you might like to read: Collecting Money in a Rocky Economy, by Paul Weyland.
Incidentally, I'm a Christian, too, and while I firmly believe in the concept of forgiving others since the Lord has forgiven us, I also believe that the Scriptures teach the ideas of ethics and honesty in the realm of business, as well as the fact that "The laborer is worthy of his wages," and there is nothing at all wrong with collecting the money that is due you.
Amen Sister Rebecca!
Love this topic...we also are a CCM station and face a very similar and serious dilemma. I am looking forward to the responses here!
The language below is on every contract. I never fail to be amazed by sales people and sales management that is afraid to ask for money OWED. It happens in my own company too, and it takes some retraining in word tracks for sales people and sales managers from time to time... but you have given the product, you deserve to be paid. The "They might cancel" excuse is a reason to retrain or replace the rep who said it. If you don't have YOUR money in 30 days... 45 at most, you have a problem.
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Guarantee: For value received, the undersigned, jointly and severally, unconditionally guarantees the full, prompt and complete payment and performance by advertiser of all obligations under the foregoing Agreement, and also agrees to pay all amounts owed under this Agreement 30 days from the start date of any invoice mailed by STATIONS. If payment is not made within this period or if the advertiser fails to comply with, any other terms of this Agreement or the terms per the Station Credit Application, the Advertiser is in default under this Agreement and is responsible for all amounts due and owing STATIONS, in addition to all collection costs, including but not limited to collection agency fees, court cost, interest and attorney's fees. Accounts in default as set forth above shall be charged interest at the rate of 1.5% per month. This Agreement is enforceable by STATIONS without having to resort to any remedies or measures other than those required by law. The Stations are not waiving any rights it may have to enforce this Agreement or its obligations.
Payment for radio advertising purchased from STATIONS and funded by cooperative or vendor sources is the sole responsibility of the undersigned advertiser. All checks returned for nonpayment are subject to a $25 fee to be paid by the party whose check was returned. Additionally, if paying by check I authorize the radio stations either to use the information from my check to make a one time electronic transfer from my account, or to process the payment as a check transaction. When we use this information from your check to make an electronic fund transfer, funds may be withdrawn from your account as soon as the same day you make your payment, and you will not receive your check back from your financial institution. In the event that your check is returned unpaid for insufficient or uncollected funds, we may electronically debit your account for the principal amount of the check. Any changes to this Agreement must be presented in writing to STATIONS at least two (2) weeks before the proposed change. The advertiser is responsible for all sums owing as a result of any change. Proposed changes are subject to the approval of STATIONS. Agreements are non-cancelable. In the event an advertiser cancels an Agreement, Advertiser will be responsible for the difference between rate card and the negotiated contract spot rate (Short Rate) for any advertising that has previously aired within the dates of said contract.
Agency Guarantee: In consideration for the provision of advertising to the undersigned Advertiser, the undersigned Advertising Agency and or representative thereof, hereby guarantees all amounts owed STATIONS for the advertising ordered by the advertiser. The Advertising Agency becomes immediately liable for all amounts of money owed by the Advertiser in the event of default, as set forth above.
Mad Dog Wireless, Inc., Smoke and Mirrors LLC and Murphy Broadcasting and the parties to this advertising agreement affirm that nothing in this agreement, or any of the actions, benefits and obligations relating to it, discriminate in any way on the basis of race or gender.
Chris,
Do you require the agency guarantee of all advertising agencies doing business with you, or are you selective in its application (i.e., exceptions are made for agencies unable/unwilling to stand for their clients' debts)?
-Rod
Perhaps your Board of Directors also understand the commandment of "Thou shalt not Steal". If an advertiser has commercials that aired and that advertiser does not pay for them, that's stealing!
If I have contacted the customer through previous e mails, say for a copy check,, I then take that email and post a new message on top saying " we've done our part - now please do yours". And it really works.
I don't know if it is the wording or just that it is non invasive.
I have a few customers- florists /restaurants, that I will swear only send money when I call. My conversation always starts with " this is Delores at WRJC collections, Thanks for the check last month. <PAUSE> what can I tell the boss today?
Most people will give me an amount and a day they will mail out the next check.. Its been pretty successful, I just don't understand why people have to be reminded to pay their bills."
It amazes me that non-profits do not understand that the key word in "non-profit" is PROFIT. It is simply not possible to accomplish the mission statement of any organization without doing so.
My best collection method is a credit card. We keep the card on file and 15 days before the clients' advertising for the next month kicks in we run the card.
I think for many small community stations, the public tends to view their local radio station more as a public service rather than a BUSINESS. As an advertising consultant on 100% commission, part of my task in the first couple years was to change this perception. When someone doesn't pay me for services rendered, in my mind that's no different than the idea of me going into their business and swiping something off the shelf. No one needs to be Christian to know that's just wrong.
When a new client applies for a credit account, it's paramount they understand our terms beforehand and that as soon as payment is overdue, I'm going to be immediately persistent in collecting. First a polite email with a "friendly reminder" requesting an answer as to when we can expect payment. Then a phone call and if that fails, a drop-in. I'm not shy about telling clients that once arrears reach 120 days, their account goes to a collection agency. Any client without a credit account pays up-front, before anything goes on the air - no exceptions.
Nice, but no-nonsense. I rarely run into collections problems these days but I will admit it took a while to change the general perception.
This station names and shames its debtors on-air - check out http://www.firstpost.com/business/big-fm-names-and-shames-their-debtors-286712.html
But it's a one way street - you'll get your stuck payments but you'll lose the account forever. To be used only when you've reached a dead end!
Ouch! I would just pull the account after 30, settle using the contract terms, and NO more buys till the bill is paid in full.
The problem with collections starts after 30 days. If you don't keep up with it after that, it could spell trouble, and the success rate is not going to be that good.
Does the Bible also not say "Render unto Caeser what is Caesers"?
I am a christian and theres mention of paying for what you bought in God's word.
