Commercial collections are always difficult. This is especially true in the current economic conditions. Collectors and their managers are often frustrated by slowing cash inflows, broken payment commitments, higher bad debt losses, and payment delays from previously stellar customers. The goal of every collector is to maintain as much goodwill as possible while reducing delinquencies as quickly as possible. This balancing act is never easy, but here are five tips for improving the effectiveness of your telephone collections…
The Five C’s of Collections:
- Clarity: Make certain that your message is delivered in such a way that the customer knows exactly what action you expect them to take, and when.
- Courage: Take a stand such as placing an account on shipment hold when it is necessary to extract payment from a delinquent or uncooperative customer.
- Confidence: Speak from a position of strength. To the extent that the customer senses weakness or a willingness on your part to wait for payment, they will almost certainly take advantage of this opportunity to delay payment.
- Conviction: Avoid the temptation to be tentative or apologetic in your discussions with delinquent customers. When a customer is past due, your company is the injured party. Use this mindset every time you call a customer for payment.
- Connections: Make sure that in every collection call there is a meeting of the minds. To the extent that you are not convinced that the customer understands the potential ramifications of any additional delay in making payment, you have not made “the Connection.” My advice: Don’t hang up until you know that this Connection has been made.
Use the Five C’s of Collections every time you make a collection call. Anyone using these simple techniques is going to become a more efficient and more effective collector.
© 2010. Michael Dennis. All Rights Reserved. Excerpted from the Covering Credit Newsletter. Michael Dennis is a credit manager with more than 20 year of experience and works with Credit Association’s teaching online interactive Webinars.