July 6, 2023

debt collection tips that get resultsDebt Collection Tips That Get Results

Making collection calls to customers for payments is not a task that many people look forward to, especially in credit departments that are overworked and understaffed. These calls are usually given low priority and are often postponed or forgotten altogether.

The reason why many people feel uncomfortable making debt collection calls varies, but it's mainly because it takes them out of their comfort zone. They lack confidence with the process, leading to a fear of embarrassment or failure.

If debt collection is one of your job responsibilities, we have good news. Our certified professional at Revenue Assurance Partners offers five debt collection techniques that can help you collect debt effectively.

1 - The Preparation

It only takes a minute to prepare for the collection call and the slightest factual error can have disastrous consequences for customer relations and collection efforts.

For example:

Collector: Mr. Shoemaker

Customer: Yes

Collector: Mr. Thomas Shoemaker

Customer: Yes

Collector: My name is Robert Smith with the You-Owe-Us-Money company. We are very concerned about the past due invoice of 45 days, invoice number 1234, dated Oct. 27, in the amount of $1,234.00. We must resolve this today. I will need a check in full put into today's mail.

(Wait for the response)

So far so good.

Customer: That invoice was paid two week ago. I have already explained to someone at your company that the problem was with invoice 1235, which had defective materials, not invoice 1234.

Collector: Well, my records show... just a minute... yes... yes, I guess your right. We did receive payment on invoice 1234. Can you pay us on the other too?

If the collector in this call had properly prepared, he would have been able to anticipate and overcome the defective merchandise objection. But having mis-managed the call through lack of minimal preparation, he is in no position to exert any meaningful control.

Customer relations are strained, and the collection effort is impeded. All because the collector gave the appearance of not knowing what he was talking about.

This example also demonstrates good record keeping is essential to a successful collection effort. This is true whether you handle an account exclusively or whether several people work on one account. Sound record keeping can avoid the pitfalls of being unprepared. More importantly it enables you to promptly follow-up and maintain control.

2 - The Opening

The opening of a collection call will set the tone for the call. An effective opening should contain the following:

Are you talking to the decision maker?

Have you identified yourself?

Have you stated the reason for your call?

  1. Past Due Invoice
  2. Number of Days Past Due
  3. Amount

Have you requested immediate payment?
Have you waited for a response?

The science of collection gives us the essentials of a strong opening. Without those essentials your opening will be ineffective. But saying all the right things doesn't mean they are being said with a persuasive delivery.

For example,

Collector: Mr. Shoemaker?

Customer: Yes

Collector: This is Bob Smith of You-Owe-Us-Money company. I'm calling about a long overdue invoice. An invoice that we show as past due. It's invoice number 123 dated Oct. 27 for $1,234.00. Will you please mail us a check for the entire amount today?

All the essential ingredients are apparently in place. However, the call is routine and is not likely to impress upon the debtor the importance of the matter.

A persuasive opening will communicate that urgency in a professional manner.

For Example:

Collector: Mr. Shoemaker?

Customer: Yes

Collector: Mr. Thomas Shoemaker

Customer: Yes

My name is Robert Smith with the You-Owe-Us-Money company. You have the past due invoice of 45 days, invoice #1234, dated Oct. 27 in the amount of $1,234.00. You need to resolve this today by sending your check in full.

(Wait for the response)

For the collector, this opening is considerably stronger and is likely to increase the anxiety of the customer. Don't be afraid to be firm with a customer. They will continue to take advantage of you if you don't exercise control. Remember, the longer the account is past due the more difficult it is for the customer to face you and the invoice. This customer avoidance does not lend itself to any type of mutually beneficial business relationship. A firm and persuasive approach will increase the likelihood of collection and will help that customer do what is in his best interest.

This opening also puts the context of the call in terms of the debtor's frame of reference, rather than your frame of reference.

3 - The Objections

Solid pre-call preparation. A strong opening presentation. Now the fencing begins. Objections are reasons the debtor believes he cannot pay, should not pay, might not pay. Your job as a collector is not to change the debtor's mind so much as it is to demonstrate to the debtor the benefit to him in paying your company's outstanding bill.

The first step in overcoming objections is to listen; what is the debtor saying and what can you read between the lines.

As you work through objections with the debtor, remember, emotion, not logic sells. If logic would convince a debtor to pay, then there would be no delinquent accounts. While a salesperson works through objections to "close" the sale, you, as a collector, are working through objections to "close" the promise to pay.

You must persuade the debtor to pay through means which appeal to the debtor's emotion, not logic.

4 - The Close

Any successful collection call must end with a commitment on the part of the debtor. In order to be an effective "close" the commitment must be; specific, agreed upon, and confirmed. The close must occur at the conclusion of the collection call or it will not occur at all. The commitment must require immediate action on the debtor's part, and the collector must know what action is most appropriate.

For example, Mr. Shoemaker, our customer who keeps acting like a debtor, has made a prior promise to pay and explained his failure to keep that promise by blaming the bookkeeper for not following his instructions. The collector has worked through the objections and does a technically correct close.

Collector: To summarize Mr. Shoemaker, you will be sending a check in today's mail for the full amount of $1,234.00

(The Specifics)

Customer: Yes, that right.

(The Debtor's Agreement)

Collector: That's confirmed then. Thank you for your time.


Customer: Anytime Mr. Smith.

What is the customer's really saying? "Yes! I bought another 30 days". There are innumerable excuses for the customer to use on his next call from the collector.

The collector failed to require appropriate action on the part of the customer.

He might have handled it this way.

Collector: To summarize, you will cut a check today for the full balance of $1,234.00, check number 103. Is that our agreement?

(The specifics)

Customer: Yes, that's right.

(The Debtor's Agreement)

Collector: Fine. I will have a courier pick that check up today. Would you prefer he arrive before 12:00 or between 3-4pm?

(The Confirmation)

The difference is immediate action. The collector has provided every safeguard to get his company's money the very next day. This collection call has put the

responsibility on the customer to demonstrate by his action whether he is a customer or debtor. And the collector will know the answer within 24 hours as opposed to mail pick-ups, mail transit and other potential stalls. Further, the collector will eliminate future excuses and objections by the debtor.

5 - Follow-up

Absolutely critical to any collection call is follow-up. If you will elicit a promise from the customer to pay by a certain date and you don't follow-up on that date, then you are simply telling that customer that they can feel free to stall you as much as they'd like.

If possible, send a written promise reminder to the customer. Utilizing letters in this manner strengthens the collection effort and keeps the appropriate degree of pressure on the customer.

Make sure that your follow-up phone call after the promise reminder is completed in a timely manner. In that follow-up phone call, you want determine whether the debtor simply forgot the promise that they made, negligent in their business practices, is stalling you, or has no intent of paying.

Proper follow-up enables you to use broken promises to motivate the customer to make payment on the follow-up call.

Revenue Assurance Partners

A Commercial Debt Collection Agency With Over 50 Years Of Experience

Take advantage of a commercial debt collection agency with over 50 years of collective experience with commercial and business debt collection. Recover your lost funds quickly with our service. Give us a call at (866) 322-3328

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