There’s no purpose to renting a billboard if you don’t get paid for it. And sometimes the advertiser’s check doesn’t come in and you start to panic. In this Billboard Mastery podcast we’re going to review the steps to take and how to solve the situation without losing the advertiser as a good customer.
Episode 77: What To Do When An Advertiser Won’t Pay You Transcript
There is no benefit to having an advertiser on a billboard, if they don't pay you money. In fact, if they don't pay you money, it's worse than having no advertiser at all, because you had to put up their advertisement, you light it at night and you get nothing in return. So, how do you make sure that you get paid? This is Frank Rolfe, the Billboard Mastery Podcast, we're going to talk about how the correct science exists behind getting the money from your advertiser. So, the first thing you have to ask when an advertiser is not paid you is, "Was it intentional or is it a mistake?" Because sometimes it's just a mistake. You didn't get paid for the month, you've always gotten paid in the past, now you didn't get a check this month. What do you do?
Well, don't be shy about calling the advertiser's office, talking to the accounting department or the payable department and say, "Hi, this is Frank from the Billboard Company, I was just curious, we've not received the check in for this month and just wanted to follow up on that." You'll probably get somebody who's a bookkeeper and they'll may just write with you on the phone, look it up on the computer and say, "You know what? We forgot to pay you, I don't know what happened. We must have missed your invoice. That's no problem, we will go ahead and get you paid." Case closed. You thought it was a big deal, it was going to be a big problem and in fact it's not. They're more than happy to pay and they just didn't know.
And you and I and everyone are the same, if I don't get an invoice, even though I know I owe certain things every month, water, sewer, electricity, if I don't get an invoice, I never remember to pay it. So, we all live in a society where invoices are just essential and we just assume we're going to get it, and if we don't get it, even though we know better, we just don't think of it. So, that's the first question is, can you just call and get it fixed? Or in other cases what happens is they're just not very good at getting things out the door in the old payables department.
And in those cases, what would happen is, if you called them and they say, "Oh, I'm sorry we missed the invoice, we'll get it out to you." And you wait another week and you don't have it, you call them up and say, "Look, I was just curious, could I just come by and pick it up?" And typically they'll say, "Yeah, okay, you can pick it up. We will have it ready for you at the front desk at 2:00." And then you just head on over and you pick it up. Now the problem with that is that's a real pain in the rear, because now you're your own Uber to go out and get the check so that you really don't want to have that process happen.
But unfortunately, there are some advertisers with that's kind of how they pay. They're just very unprofessional, very disorganized. But still, you're going to get paid, if you hang in there and call them and bug them and maybe pick it up, you're still getting paid. So, in neither of those cases requires any kind of confrontation. You're just a nice person calling up, because you've got your own bills to pay, checking to see where the check is. But then what if you tried both of those and that doesn't work? You try and be nice, amiable, friendly, and they still won't pay. Well, then what do you do?
Well, the first thing you do is you want to try and meet with them in person, because you got to break the ice and find out what in the world is going on. And some of those meetings can be really weird. I've met with many advertisers on the topic of just following up, we need to have a meeting to figure out why we're not getting paid. And you may hear all kinds of wild and crazy stuff. I've had people throw people under the bus and say, "Oh, yeah, well the reason you're not getting paid is our accountant has things so screwed up, we don't even know what our balance in the account, and we don't want to overdraft. So, here's our plan of getting you paid."
I once had a meeting with someone and they told me, "You know what, you don't... No one else really knows this yet, but our accountant for the advertising agency took all the money and ran off. And now we don't know how to pay the bills, because all the money the advertiser kicked in for all of the Billboards and the radio, the TV, it's all vanished."
And then I had the one meeting where I went down and met with the person who had a restaurant, and they had another restaurant in the Bowling Alley. I went to go meet with them and they wouldn't meet with me. So, I went in the hallway and I called the Bowling Alley and I had the Bowling Alley announce in the PA system. "Hey, could Crystal come down and we have got a call for you down here at the front desk." And as I saw her walking down the hall, I had her trapped. So, I stepped out of the door, I called on the cell phone, I said, "Hey, Crystal, how's it going? I need to meet with you on the Billboard bill." And, oh, she went nuts screaming at me, cussing at me. How dare I do that? How dare I embarrass her and everything else?
But you know what? In all cases, even including Crystal, I then got paid. Because people, once they know you really need the money and you're willing to press it to the point of a personal meeting, they feel guilty. No one likes to owe people money. So, typically they try and find a way to get you paid. So, we're still at that point, even though we're not on the bestest of terms, once we meet in person, you can get over that. I had Crystal on my Billboard for many years after that, because it wasn't my fault, I was just trying to collect money, I wasn't the bad guy. But then you have the case of still nothing happens. So, now at that point, the advertiser is not meeting with you, not communicating with you, not doing anything they promised they would do in the contract. So, what do you do?
Well, the first thing you have to remember is you've got a Billboard lease, you have a written agreement. This isn't just some verbal thing. So, they're in default of that written agreement, and you've got to start building your paper trail now. So, you have to send them a formal note as prescribed in your lease, whatever the lease says of what happens in the event of non-payment, you probably send them a demand letter that says, "If you don't pay me within so many days, you're in default of the Billboard lease, and I'll take your ad down. But you got to follow it exactly by the book, exactly as it says in your rental agreement as to what happens in the event of default. You can't just do any wild and crazy thing that comes to mind, you got to follow what the paper trail says to do.
And once you give them the notice of default, if they don't respond within the prescribed period in accordance with your lease, then I would just start replacing them on the sign. You don't want to hear that, because you don't want to have to go out and find a new advertiser and have new production cost to put them up, but you may as well do it, because they're not going to be paying you. Now, the key item here is we've built the paper trail. Early in my career when I didn't have the paper trail, I took down an ad for Ramada Inn out in Lewisville, Texas. What happened? He never paid. I went by, he wouldn't talk to me. And so, I gave up and I just, "Well, I'll replace them." And I replaced them, but I did not build the paper trail. And what happened?
The Ramada Inn sued me claiming I had taken their sign down without following the protocol of the lease. So, they were shaking me down twice, shaking me down the first time, putting the sign up without billing and then shaking me down a second time for removing them for non-payment. It was a very bitter lesson. So thereafter, I knew going forward I had to do build the paper trail in conformance with the lease. But now let's assume you then find an advertiser and you replace them. Did they get away with murder? No, not at all. Now you're going to sue them in small claims court. Why small claims court? Two reasons, number one, most billboard leases fall in a dollar amount within small claims territory, which is typically about $10,000, but check on your state and your court and see what that number is.
So, we're going to go ahead and file a suit in small claims court, because it costs nearly nothing to sue in small claims court. All you pay is a filing fee and you're able to represent yourself, you don't have to use an attorney. Now, sometimes when you sue the advertiser in a small claims court, what happens? Well, they pop up and pay you, they don't want to go to court, it's embarrassing. Others, you have to go to court, often they don't even show up, 'cause they're embarrassed and you get a judgment on them, and then you can typically collect on the judgment. Normally, it scares them so bad when you go to collect on the judgment, that they once again they pay up.
But the key is you got to do something. One problem that people have with Billboards often is they're too timid to take it to the next level. They will send out the invoice, they don't get paid, and yet they don't really push for it. They don't call the advertiser, "Where's my money?" They don't try and get the face-to-face meeting. And they ultimately don't even bother trying to replace them ahead of time or sue them for the deficiency, and that's just plain stupid. Every advertiser who signs an agreement, they owe you money. Don't let them change it, flip-flop it that somehow it's your fault and not their fault. Collecting money is key, and if you follow these techniques, you will succeed. This is Frank Rolfe, the Billboard Mastery Podcast. Hope you enjoyed this. Talk to you again soon.