Collection Calls: The Perfect Approach

Thursday, November 12, 2020

The Best Approach to Collection Calls

Some of your team members may have excellent conversational skills. Others may excel at client calls. Ideally, the people you recruit to handle your collection calls should have both skillsets. These effective communicators make the best collectors, mediating your cash flow and making sure the system runs smoothly.

Striking the right tone is vital in a corporate collection call. Some people might be tempted to be hostile and demanding (after all, the person they're speaking to has an unpaid debt), while others may lean toward a friendly, conciliatory tone. A good collection call should be neither of these. The ideal call should be calm, businesslike, and respectful.

Here are some essential tips to follow for the ideal collection call.

Be proactive rather than reactive

It's not enough to begin calls once the due date has already passed. This kind of reactive approach contributes to less effective collections. Identify likely late-payers and defaulters, and prioritize them.

Making a collection isn't as simple as just calling up the customer and asking them to make payment. For various reasons, customers may be tricky and avoidant. It's important to prepare in advance, backing your call up with detailed information. Ensuring that you have the facts of the case can go a long way towards securing a successful call.

For your initial call, research the case and formulate a realistic goal. Focus on the important aspects and prioritize. You should have support documents to hand when you make the call. At the bare minimum, you will need:

•          The customer's details

•          Details of the product or service

•          Details of the delinquent invoice(s)

•          Payment history

•          Terms and conditions of payment

Keep accurate documentation of every call

Effective note-taking is crucial for successful collections. Document every detail as you go. Having this information could help resolve disputes later on. The information you might note down will vary but might include:

•          Call dates and times

•          Any promises offered by the customer

•          Planned date for payment

•          Actions required

•          Any existing agreements and commitments

Documentation will facilitate later calls and is also vital if the case is passed to another collector. In the absence of clear and easily-accessible notes, it can be challenging for the new collector to catch up. Making proper notes and tracking them digitally is a proactive approach that facilitates fast access to critical information.

Remain empathic

While the goal of collections is to secure payment, empathy can be a useful tool to achieve this. Even if a customer has fallen behind with their payments, they remain a customer. There's no use sacrificing goodwill for the sake of payment. Remaining patient and respectful during collection calls, demonstrating empathy towards the customer can contribute to healthier and better relations in the future. There are three main ways you can show empathy.

Inform and educate your customers. A missed payment may be an honest mistake due to some billing statements and invoices' confusing nature. Take the time to explain to your customer what they need to pay.

Be a partner, not an opponent. If you act as though the customer is an enemy, you risk putting them on the defensive and making them harder to deal with. Show friendliness, empathy, and understanding.

Lend an ear. Once customers open up to you, they may have things they want to get off their chest. Pay attention and cooperate with them to get their payments back on schedule. This creates respect and trust between customers and collectors, and increases successful collections and customer satisfaction.

Seek facts and avoid jumping to conclusions. Don't assume that you know the situation until you've discussed it with the customer. Ask open-ended questions to elicit information, and work with the customer to analyze the problem.

Understand that customers may be defensive, and prepare for this. Customers can become defensive when told that they are behind on their payments. When presented with evidence that they've missed payments, they may try to argue or manipulate you. You mustn't allow customers to use aggression as a way to end the conversation. Remain calm, and don't be tempted to argue back. Try to move the conversation towards a satisfactory solution for both parties.

Moderate your tone & set follow ups

Keep a positive, calm, respectful tone. Smile when you speak -- it changes the sound of your voice and makes you appear more friendly. Break up the conversation with pauses rather than rattling off information without a break.

Set actionable goals and record these. Before you call, get confirmation that payment is past due and establish an expected date for payment. Ensure that the customer has any documents they need to process payments and that those documents are with the right person. By the end of a collection call, you should ideally have established some concrete agreements and goals with your customer.

Follow up on your calls. Be ready to follow up on your initial calls. A follow-up call keeps communication channels open and reminds clients of their obligations. Follow-up calls can help your customer understand the possible consequences of non-payment and help determine the most effective route to payment.

To Wrap Up

Even with the best techniques, a call might not yield the results you were hoping for. Clients can be demanding, and collectors need to be resilient. It's smart to work with clients, extending empathy and flexibility towards those who are genuinely struggling. This doesn't mean letting debts slide, but devising plans for future payments that work with your client's finances. Being realistic, taking the right approach to negotiation, and securing even a partial payment to be made as early as possible, can help clients stay on top of repayments. It's helpful for collectors to update and develop their negotiating skills through training and education, as well as experience with clients. With skillful handling and the correct approach, a collector's job can help ensure timely payments that improve cash flow and support growth.


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