“ABC” of telephone collection (Part 2)

As what I have said last week, I have been requested by a lot of readers and colleagues in Cebu that are in the Credit and Collection (C&C) professions asking me to write more collection topics. Again, in my more than 20 years in the collection profession, these fundamentals are most helpful and very effective once mastered. Below is the other half of “The ABC’s of Telephone Collecting” so make sure you read them and practice them diligently.

LEAD the debtor to develop a plan of action, which will clear up the account in full. Always emphasize the urgency of the situation and the advantage of settling the account immediately such as paying less interest.

MOTIVATE him to pay. The three basic appeals are appeal to honesty (or fair play), pride (or honor), and fear (or anxiety). If this will not work, double check if your policy states anything in terms of further collection escalation using legal.

NEGOTIATE the most advantageous settlement possible for your client, if you’re not able to obtain a payment in full. However, be sure that you are in a position to negotiate by having the authority and/ or discretion.

OBSERVE any signs of the debtor’s holding back information or making inconsistent statements. These may be a clue to his intentions. You must learn to identify, if it is a legitimate excuse, or it is just an alibi or a stall tactic.

PAUSE for a short time after opening the conversation. This throws the burden of conversation on the debtor and gives him a chance to offer payment or to give his reason for not paying. Also known as Psychological Pause.

QUENCH any tendency you have to preach, moralize, judge or argue. Avoid fighting words. You get more positive result by using honey than vinegar.

REVIEW the debtor’s record. If there have been previous broken promises, you will want to keep a close check on any payment arrangements he may take.

SELL the debtor the benefits to him of a Payment-In-Full (PIF). Select a selling point to fit the debtor’s situation; stress the urgency of the matter.

TALK clearly and distinctly when making a telephone collection call. If you tend to speak fast, train yourself to slow down so there is no chance of the debtor’s misunderstanding you.

UTILIZE your mistakes and be cognizant why it did happen. They will help you do better job if you let yourself learn from them.

VARY            your approach. If you sense you’re not getting through to particular debtor, try a different approach. This will show how adaptable you are in a given situation.

WITHHOLD agreement to accept a partial payment until you are fully satisfied there is no other feasible means of collection.

XEROX all the pertinent documents, such as duly signed Debt Acknowledgement and Repayment Agreement (DARA). Nowadays, it could be simply scanning and storing these documents electronically.

YIELD            only when you are convinced that there is real hardship, the claim is impossible to collect, or is detrimental to the client’s interest.

ZERO IN on every call you make. Your persistence and patience will always pay off.

For comments, rejoinders and questions on credit and collection matters, send email to [email protected].