Problems Marketing Agencies Have Collecting Payment From Clients
Marketing agencies like any other business have problems collecting from clients. In order for any business to stay in business and become profitable, it must receive the payments due from clients. Marketing agencies usually bill or send out invoices to clients and simply hope that the client pays as agreed once the promotion or advertising campaign is complete. In many cases, the marketing agency has problems collecting payments from clients.
Collecting Marketing Agency Debt
One of the reasons marketing agencies have difficulty collecting payment is that their clients often will withhold payment before services can produce results. Most of the time clients want to see results from the marketing agency’s service for which they have promised to pay. As most experienced with marketing know, results from advertisements and exposure campaigns can take time to develop the intended results. Their clients however do not necessarily understand the intricacies associated with developing a successful marketing campaign and will avoid payment if they do not see an immediate tangible result.
Another reason collecting can be such a hassle is that marketers sometimes mix business with fun by becoming too close with clients. Business is business and it should be kept to that standard. If this standard is not established then the client will feel friendship and being close is an easy way not to pay which makes the marketer feel uneasy in bringing the payment terms up. The marketing agency is then put in a horrible position as for financial goals for their business. Collecting what is due is the way businesses actually stay in business. Therefore, any business be it a marketing agency or whatever, must keep financial goals in mind at all times so that they can continue in the industry of being a marketing agency.
Additionally, many marketing agencies also run into issues because they do not properly screen their clients for credit risks beforehand. Marketers in general are typically heavily experienced and enthusiastic about the sales cycle. Speaking to prospective clients and enticing them to engage the service of a marketing agency requires them to show their prospective clients a picture of where their business could go with a proper plan in place. Oftentimes, running credit checks and discussing the financial aspects of the transaction are not the primary focus. Many agencies end up extending credit to their clients completely blind to the risk of non payment that they are incurring. Running simple credit checks or doing quick online searches can often reveal problems and risks that can be considered without derailing the sales process.
Despite instituting credit policies, keeping a professional distance and producing results from clients will still not guarantee payment. When faced with a client that defaults, it is a wise idea to engage a professional that is experienced in handling issues of non payment. Debt collection agencies often work on a contingency basis meaning if they do not collect they do not charge a fee for their service. Many times they are successful in resolving non payment issues simply because they are a third party to the transaction and it shows the commitment the marketing agency has in recover the obligation.