In the past year as local businesses began reeling from the economic downturn, many clients reduced their ad budgets. But some didn’t change their spending levels fast enough to keep up with cash flow. Businesses were paying media bills later and later, and some – not at all. Many radio and TV stations found the need for a collections professional.
As the president of Szabo Associates Inc., a media collection company, Robin Szabo has seen similar business cycles in the past. “This is actually the 5th recessionary period we have weathered in the media collection business. But this one is doubly tough. Consumers are just not spending, and that has affected every category. Radio is not alone in its need for help with collections.”In 1971, Pete Szabo, Robin’s older brother, launched Szabo Associates in Atlanta. “The company’s first client was a local AM/FM/TV combo, and the broadcast business grew quickly. Pete started the business because there was nobody specializing in media collections. He saw a void and filled it.”
The company quickly moved into newspaper collections with The Washington Post as our first print client; followed by adding outdoor, magazines and cable. Robin adds, “I joined the business after college and became president when Pete passed away in 2006. We’re always busy, but collections seem to be a challenge for everyone right now.”
“So how do stations deal with good clients who no longer pay on time?”
“Many clients have developed bad habits on paying. Resell the benefits of the medium and reinforce your payment policy. It’s a hand holding relationship and the sales department must take the lead on this one.
The worst thing is waiting until 60 or 90 days before thinking about the problem or potential problem.”
“So what can stations do to improve collections on their own?”
“Always have a plan for new customers and stay on top of them. They need to know the rules up front, and your billing has to be on time. The salesperson can help with clear communication. And make sure you know how to follow the invoice through the client’s system. ”
“Are collection problems worse than ever?”
“The problems really aren’t significantly worse than during other recessionary times, and our approach hasn’t changed this time around either.
We work to collect the debt but keep your relationship intact when possible. It’s not easy to do, but 75% of our issues are resolved within 90 days. That doesn’t mean we always collect every dime, but the issues are resolved on a timely basis.”
“Now, technology can help you too.”
Debtornet is a tool that we provide — it helps you determine whether to grant credit to a customer. Debtornet contains history on about 400,000 clients so the station can see how the they have resolved issues in the past, if there have been any recorded. It’s a tool that helps in the credit granting process.
This is a tough time for the media industry, but we have the history and the experience to help stations collect. This recession will pass, but there will always be a need for a media collection service like ours.
Contact: Robin SzaboSzabo Associates, Inc.
404-266-2464 or info@szabo.com
www.szabo.com
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