Rentals and returns - 14 Jul 2008

It's half past eleven on a Saturday morning, the DVD's are due back at midday, but the kids fell asleep halfway through the movie last night and now they're insisting on watching the rest of it, plus the hour-long bonus features... What do you do? Upset the kids and hear them whine for the rest of the day? Return the videos late only to be fined for the full amount? Or drop the videos in the dead of night and never go back? With the economy facing the possibility of recession, retaining loyal customers is as important as making sure your books balance at the end of the day, and it's becoming more and more necessary to find the equilibrium between the two. Because, while you're sitting with a lengthening list of people who owe you, these people in turn are facing their own cashflow problems, and are more than likely screening their calls from your persistent accounts department. In the case of DVD rental stores, some have become more customer-centric with respect to their return times and cater for those people who, after a long night of watching, tend to snooze till noon. And I'm under the impression many other businesses could learn a thing or two from this lot. I'm not saying extend repayment times indefinitely, but perhaps show a little leniency. Compile a list of loyal customers who have recently been falling behind in their payments. Give them a call and speak to them like you actually care (and so you should - this isn't just your money you're following up on, but also a long-term customer who's been feeding your bottom line for years). Don't harass them by demanding to know when they're going to pay. Tell them you've noticed they're a little overdue, but because you value them so much, you're going to give them an extension without the costly fines. They'll love you for it. Also, be willing and open - rather than have the customer avoid you like the plague, let them know that they can call you if they can't make a full payment and arrange another payment option. After all, a small amount per month with a shot of interest and a happy returning customer is better than nothing at all, is it not?