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How would you handle this situation?

R

radioboy

I have a situation that I have no run into in the past, at least not quite like this. I would like to get some insights from some other radio pros.

But first, by way of background: I am a former station manager and handled some sales and such for an AM station. That station owner had a policy that basically boiled down to: If I don't know you, and you are a first time client/advertiser, you have to pay up front to get your ads on the air (the exception being ad agencies.) That led to very few outstanding collections.

Almost two years ago, a local businessman (term used loosely at this point) begged and begged me to get his flooring company on the air with my Internet station. He said he had $200 to spend. AGAINST MY BETTER JUDGMENT I finally agreed to give it a try and bill him in 30 days. Of course he did not pay, and his ad was pulled off the air. Mind you, this is October 2009.

Last week I heard from him. He wanted to buy $180 in spots. I told him I'd be happy to help him, but we needed payment up front.

"I can't pay it now."

"How about 50%, which is $90."

"Can't pay that. i will pay u this time I promise." (sic)

"Do you have an ad?"

"Yes, WXXX (a Clear Channel station) created it."

"Are you running your spot with WXXX as well? We could easily use the dub."

"Yes. I'm getting 50 calls a day from it."

"May I get a copy of the spot?"

"I don't have one."

"Well, I could probably get WXXX to send me an mp3 copy of it, then."

"They don't have one."


At this point I figure this person's a total player.

"I haven't started it yet."

Okay..he's getting 50 calls a day from a spot from WXXX..a Clear Channel station with a spot rate of $40. And he hasn't started it with them yet. They've created it yet don't have a copy of it.

Today I sent him a message that my board of directors (we really do have one) stated that the policy of "you have to pay upfront to play" was in effect. We'd put him on if he paid upfront." Remember the grand total is $180. He'd already stiffed us for $200 way back when.

In the meantime our management contacted WXXX. Clear Channel's business manager wrote "???" and sent it to the market manager. His response was that he didn't have a clue about the person OR the business.

I responded to CC: "Thank you very much. You've told me all I need to know."

Tonight he got nastier: "I'm gonna tell everbody what u did" (sic)

I didn't bother to respond. I do have some other real, paying sponsors.

What I did was not put on a total non-paying advertiser and get taken a second time.

I know I should have never put him on in the first place. How would you handle this kind of situation?
 
Forget about him. If he's a deadbeat to you, what is his credibility with the folks he's gonna tell? And what's he going to say? "The station wouldn't run my spots because I stiffed him previously"?

I operate commercial stations. ALL new accounts are prepaid unless we grant credit, which we do only if the Credit Application is filled out and after we check their references.

We also accept VISA, MasterCard, and Discover, which we offer to new accounts as an alternative. I'd rather get 97% than nothing. And a number of accounts, ones that could write a check and have good credit, opt to use credit cards (probably for frequent flyer miles like I do).
 
What's the dilemma? That he's going to ruin your good name with other potential sponsors? If that's it, I wouldn't worry too much, especially if you have a good reputation with your paying clients.
 
Big A: No, he didn't.

Bill: It's not really that big a deal. I wouldn't run him now if he HAD the cash.

But the response proved that I handled it pretty much like everyone else would have.

I can't wait until he tries his stunts with Clear Channel. Might be fun to watch.
 
I would say that you handled it as well as anyone should: just don't bother to reply.
You already know how it's going to work out.
He told you how it will work out, but I don't think his version is all that accurate. :)
 
The difference in having a business and staying in business is the same as the difference between being sales oriented and credit oriented. You see, anyone can make a sale...that's not hard...but not everyone can collect on the sale!

If you sold $1 million in spots and collected on none of them then you didn't make $0 you actually lost money because the time invested cost you real money.

Obviously, his credit is no good! Rather then turn a potential customer away, why not turn the tables on him and barter for new flooring for your studio or board room in return for spot time...but get the flooring installed first? You may just be able to get your previously owed $200 back that way!
 
I have come across this type. When you're needing sales it is most important to remember a bad deal is never a good deal even when you need the cash.

As a stereotype, this sort of client either never pays or pays late or slowly. They are a constant thorn in your side. All in all, they cost so much in time and effort they are never worth the money. This sort of client is generally not among the movers and shakers in the community because the solid business people see him for what he is.

My standard response is: Can I come to your store, take what I want and I'll pay you later?

Most of my 'deals' are $X a month but you get, say, a 10-20% discount for cash in advance (and that means a cleared check).

I'd say to forget this guy. Just center on helping clients with their business and show them you are sincere in doing so. That will lead you to success. That success comes slowly but it is worth waiting for because you're building long term customers.
 
I saw a large, new, addressable, LED display sign in front of a large welding and repair shop.
It displayed various greetings and messages, running through a cycle then repeating.

One messages was in much larger letters and stayed on the screen a bit lionger:

" SO-and-SO TRUCKING--- PAY YOUR BILL !!!!!! "

Good, now everybody knows about So-and-So trucking.

A nice on-air jab that runs 3 seconds wouldn't hurt too much, and you could let it run for a year
or even turn it into a running gag at their ultimate expense...just depends how feisty you feel.


Near where I grew up, a farmer dissatisfied with his auto insurance not paying a claim when his car was hit,
put up a big sign in his field by the state highway, parked the demolished car by it,
and to this day, I sure as heck won't buy Farm Bureau Insurance. Not if they were the last insurance company on earth.
 
Thanks for all the responses. They reaffirmed my feeling that "you've gotta pay to play" was correct.

I sent him a note that wished him well with his business, but said we would not be able to work with him on any advertising campaigns. That's been the end of it.
 
Alan,

I think you handled the situation well.

So many times your reaction forms positive or negative reputations among everyone you and the non-paying client know as well as those who get the story secord hand, third hand and so on. The rumor mill will not do you justice.

The second thing to remember is the person who does not play by the rules does not play by the rules. It reminds me of the time I was in the drive thru at a restaurant when the lady in the vehicle in front of me claimed I slammed into her. She immediately began calling friends saying this drunk ran into her and was trying to rape her. Finally when the cops showed up, the poor guy working the drive-thru told the cop I never hit her and that the lady must be crazy. Once I saw the cop getting ready to turn into the parking lot, I began to retreive my insurance card and pull my drivers license from my wallet. The lady pushed me, grabbed them and when I tried to grab them back, yelled rape over and over. Luckily the cops move in before a few men got to me. (thought about decking her but figured I'd end up in jail). She filed an insurance claim and my insurance company was going to pay ($700) but I told them I would cost them thousands of dollars if they paid. They explained it was cheaper to 'settle'. She was a con and nearly got away with it. Definately not somebody that plays by the rules. I certainly wanted revenge but figured I had better not open that can of worms. She even filed a complaint on the cop leaving him at a desk until the complaint was found to be nothing but a lie.

So, it is best to just let sleeping dogs keep on snoozing.

Your response leaves the non-paying client without any reason to cause you additional problems.
 
It's like the old story about the guy who came to his doctor's office with two horribly burned ears. The doc said: "Holy moley! What the heck happened??"

The patent responded, "the phone rang yesterday morning and I accidentally answered the steam iron instead."

The doctor was perplexed, asking: "But....what happened to the other ear?"

The man said: "As soon as I hung up, he called right back."

As my dad once said, the only thing worse than not working, is working and not getting paid for it. Time is money. If you even suspect somebody's not going to pay, don't waste your time. You could devote that time to selling advertising to someone who WOULD pay for it.

It's pretty obvious this guy is a scammer. Don't answer the phone a second time. OR the iron.
 
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