How to collect effectively

An avid reader of my column sent me an email inquiry regarding some simple tips on how to collect effectively. I was told that she was able to attend one of my collection seminars in Cebu and she is now working as one of telephone collectors (Tele-collector) for a consumer lending company. I am taking this opportunity of sharing her email and my answer to her so that it could also in a way help other collectors most especially those doing telephone collection that might benefit from this effective collection steps. 

Of course, I took the liberty of editing her email. Her email reads:  “Dear Sir Ed,…. I was able to attend one of your seminars in 2008 and was really impressed on your credit and collection expertise. As of now, I am working as a collection specialist  handling outbound collection for one of the biggest consumer companies. I am trying to continuously improve my collection skills and want to ask you for more tips so I could collect more effectively.  Please help me. Sincerely yours,”

There is a good paradigm that goes something like this: Proper preparation prevents poor performance. So if you want to be an effective telephone collector, you must always give emphasis preparing yourself properly. I always advise my collectors that before even making a collection call, take a quick moment to study the customer's information, which will allow you to speak effectively with the debtor, it is better to have all the necessary information about your debtor in front of you. Briefly review the debtor’s record. Know what happened on the previous call or calls, if any. Anticipate what you will say and how the debtor might respond.

The following are time tested eight (8) simple steps of an effective telephone collection call:

First, Always make sure that you are talking to the Debtor. In a collection call, the worst thing that could happen to you is invest so much time talking to a person that has nothing to do with the purpose of the call. Always endeavor to confirm that you are speaking to the right person or in short, the debtor. You can do this by asking the full name, or by confirming the date of birth, or by his or her address. Example:  “Hello, I am looking for Mr. Juan Cruz, is this Mr. Cruz of 123 F. Ramos Street, Cebu City?”

Second, Identify yourself and disclose purpose of call properly. In a telephone call, it is part of telephone etiquette that the person making the call, to identify himself/herself. Example: “This is Pedro dela Paz of ABC Company.” Use the oral disclosure notice. Example: “I am calling for an overdue account, amounting to P10,000 under invoice no. 1234 dated October 15, 2012 which is now X days overdue. Or you could also be more direct to the point. Example: I am calling you to collect your overdue account, and so on … Check your office policy on this disclosure.

Third, Always ask for Payment-In-Full (PIF). One of the common mistakes of any collector doing telephone collection is they are not asking for payment in full. Either they already anticipated that debtor has no money which is simply pre-judgement or the collector is afraid to ask. Make your PIF request courteous but firm. Give the debtor an alternative. Example: “Your account with us is seriously overdue, I need you to make the full payment of P10,000 today by bank deposit or you prefer to have it picked up?” (To be continued)

Editor’s Note: For comments, rejoinders and questions related to credit & collection, Mr. Ed F. Limtingco can be reached at [email protected].