Do You Know How to Get an Edge on “Collections”?Collections Training Resource
January 15, 2013 — 1,007 views
Every collection call is a tough balancing act between professionalism and outright exasperation. Convincing debtors to repay their dues, while maintaining a professional and conversational tone, is the mark of a skilled debt collector. With the state of the economy being what it is, the number of unpaid debts has only increased. But successful debt collectors are able to stay on top of their game despite the sheer number of debtors they call every day. The key to this kind of collection success is to give your interactions with debtors a humane touch.
Building a relationship: The best approach for successful debt collection
Although it may feel easy, not to mention satisfying, to curtly list the options of repayment and demand that the dues be cleared immediately; it is the worst possible approach to debt collection. Unless the situation necessitates action, the conversation should always be polite. Negative tactics such as coercion and shaming are not only illegal, but also non-productive to the cause. Instead, by following the two rules discussed below, you can help your collections edge up and get debtors to clear their dues, while maintaining a good relationship.
- Don’t be judgmental or jump to conclusions: The purpose of the first call is primarily to confirm that the debt has not yet been paid by the debtor. It is possible that the debtor may have cleared the debt in part or full before you’ve made the call. Ensure this before you start telling them about their unpaid dues. Make sure that you speak in a normal and professional tone, keeping aside any personal “instincts” you may have. After all, for every 10 debtors who have less-than-convincing reasons for non-payment, there are hundreds more who have genuine reasons for not clearing their debt. Your task is to simply have the debt paid, not to make assumptions about the debtor’s credibility.
- Suggest some feasible options: You can suggest feasible payment options for the debtor. For instance, if it is possible for the debtor to make a part payment, then discuss the options for the same. You can also inform the debtor of alternatives available to him or her for collecting the money required for payment of the debt. Loans, mortgages, part-payment options etc. can be suggested. However, ensure that you discuss all possible options in detail without even the slightest hint of coercion. Make the debtor feel comfortable enough to discuss payment options with you, but leave the final decision to him or her. Respecting the debtor’s judgment and decision helps foster trust and a good relationship with you as well as with the creditor.
Keep Communication Lines Open to Help Your Collections Edge Up
Debt collectors typically adopt an “open-and-shut” approach to debt collection. The importance of building a relationship and maintaining communication is often underrated. It is important to remember that most debtors are more likely to be able to make part payments than an SIF (settlement in full). Maintain a cordial relationship with the debtor by discussing the alternatives available to them and helping them figure out ways to clear the debt. An empathetic and “solution-centric” approach is more likely to elicit faster debt payments and strengthen the relationship between the creditor and the debtor.