Customer acceptance is the process by which an assessment is made of whether it is sensible (or not) to do business with a particular customer or prospect. All sorts of criteria are examined as part of the process, from a company’s past payment behaviour and financial health to its chances of surviving in the medium to long term.
In practical terms, credit management has the unenviable task of disappointing salespeople if they bring in a customer that turns out not to be creditworthy. Sales is then told that, based on a thorough screening, it does not make sense to do business with the company in question (unless the terms of business are changed).
Precisely to avoid this happening, there is value in involving sales sooner in the customer acceptance process. And by using a decision model, this has now become a whole lot simpler.
A decision model is an online application used by a business to translate its policy on customer acceptance into a well-defined set of business rules. These rules are then fed into the decision model, which is used to take decisions relating to customer acceptance. Based on the criteria defined in advance, the decision of whether to work with a company (or not) becomes automatic, in line with the user company’s own policies.
Until recently, customer acceptance was a time-consuming and often non-standard procedure. The job of analysing a whole range of business data and making a decision was previously assigned to a select small group of experts. The process was usually slow and expensive. In addition, countless companies lacked a clearly defined procedure setting out exactly how the process was to run. As a result, customer acceptance generated a great deal of resentment and communication problems between various departments.
But, thanks to decision models that are used today for customer acceptance, the decision-making process is now faster and more streamlined. A decision model provides a result or recommendation for a specific question: can I do business with this (potential) customer? Because the parameters are set and optimised in a decision model, this leaves no room for interpretation or discussion. Anyone can use a decision model and obtain a recommendation quickly. Which is extremely interesting for salespeople, who can find out quickly how things stand with a business partner they may be talking to.
Using a decision model means that prospects will not be rejected by the finance department at a late stage of the fledgling relationship. Before a salesperson visits a customer or prospect, they can conduct a screening using the decision model. If, based on the conditions in place on customer acceptance, the company receives a positive assessment, the salesperson can get straight to work. If not, they can focus his attention on another prospect.
A decision model is designed to shine a light on a customer or prospect in the blink of an eye. Well, a minute or so. Using the model means that business reports and cumbersome procedures are no longer required. Knowledge of how to read a balance sheet or annual accounts is no longer needed to complete the process of customer acceptance properly.
A decision model can give anyone an insight into the financial health of a company, based on up-to-date figures.
Not everyone has the training or authority to assess (potential) customers for their creditworthiness. That job is usually reserved for employees in a specific position or with a certain level of expertise. Which means it is all the more difficult to evaluate a particular case in a reasonable timescale. And, if the specialist person is on holiday or sick leave, the period just gets longer.
However a decision model can be used by any employee. No specific knowledge or expertise is required. The decision model generates an outcome almost immediately. So not only does it have a high democratic content (i.e. it can be used by anyone), but it can also be used broadly. And the result cannot be disputed.
So why wouldn’t a salesperson use the decision models designed specifically for his or her company?
If you want to find out more about the Graydon Decision Model, download our e-paper that demonstrates in detail the value of using decision models for customer acceptance