B2B Debt Collections
Commercial debt collection, in general, is much more complex than the consumer variety.
Most companies selling directly to consumers do not have a personal relationship with each of their buyers. They deal in large numbers, with customers often numbering in the thousands or even millions. Think grocery stores, department stores like Shoprite,Ebeano and online shops like Konga or Jumia.
These sellers primarily generate business through advertising — in newspapers, online, on TV, via mailed or emailed special offers. Sure, all that advertising is expensive, but given the numbers they deal with, the expense of winning an individual customer is relatively low.
And, how are consumer sales usually paid? By credit card, debit card, cheque, or cash. If one of these customers doesn’t pay, it’s often a matter of a relatively small naira amount. If you lose their business, there are hundreds of other paying customers to make up for the loss.
By comparison, business-to-business (B2B) firms, generally have fewer customers. These customers have often been obtained by a relatively long and complex sales process which involves developing a rapport and building a relationship with the buyer. In short, securing a buyer is a long and costly process. B2B companies invest a lot of effort and resources into a sale; all of which amounts to time and expense they cannot afford to waste.
A single B2B sale often represents a significantly higher cash value than a sale to a consumer. If the business customer doesn’t pay, making up the loss with additional sales can be a challenge.