The Art of Collection: Techniques for Successful Debt Collection
Collections can be a challenging and exciting job that requires a unique skill set, combining elements of psychology, sales, communication, and negotiation. While there are numerous collection tools and techniques available, it is the artful application of these skills that sets successful collectors apart. In this article, Revenue Assurance Partners explore how collection is an art and provide techniques that can help you collect money more effectively.
The Psychology of Collections
Understanding human psychology is a critical step in successful debt collection. Debtors do not always do what they know is right, and as a collector, you must determine the debtor's motivation for paying their creditor. Reading between the lines and understanding what the debtor is really saying is critical to successful collections. By empathizing with the debtor, you can build trust and establish a rapport that can ultimately lead to successful debt collection.
Sales Psychology in Collections
To be a successful collector, you must also be a skilled salesperson. You will not convince a debtor to pay their obligation by selling them on the benefit to you. Instead, focus on demonstrating how paying their debt is in their best interest. This requires salesmanship and the ability to turn buyer objections into opportunities to make the sale. By framing the benefits of debt repayment in a positive light, you can make it easier for debtors to understand why it is in their best interest to pay their debt.
Listening Skills in Collections
Effective listening is key to successful debt collections. By listening to what the debtor says, you can ascertain their real objections and plot a strategy to turn those objections into opportunities. Listening is also a critical component of effective negotiation. By actively listening to the debtor, you can establish a rapport and build trust that can lead to successful debt collection.
Effective Communication in Collections
As a collector, you must be a persuasive communicator. This includes using voice control, effective use of silence, tone, place, and emphasis. Mastering these techniques can make your job easier and result in higher collections. By using persuasive communication techniques, you can convince debtors to pay their debt and avoid costly litigation.
Negotiation Techniques in Collections
Negotiation is a critical component of debt collection. The key to successful negotiation is determining what the other party wants or needs. It may mean showing them the benefits to them which they did not know existed or letting the other side think they have prevailed. Identifying the benefits to the other party in keeping their promise to pay is critical to any negotiation.
The Phases of Negotiation
The phases of negotiation are as follows:
- Set forth your position (what you want)
- Give the customer the reasons (benefits for doing what it is you want. What are the advantages for the customer?)
- Overcome objections
- Ask for payment
Revenue Assurance Partners
Successful collections require a unique combination of skills, including psychology, sales, communication, and negotiation. Understanding and applying these skills can make your job easier and more successful. Remember to focus on the debtor's motivation for paying their creditor, demonstrate how paying their debt is in their best interest, listen carefully to their objections, and use persuasive communication and negotiation techniques to close the deal.