There are many pitfalls in debt collection. A simple mistake can be costly for any business, yet a carefully prepared credit collection plan can go a long way in attaining successful collection. Jane Houston, in an article, gave some tips through her Collection Equation, which is basically a simple and flexible approach. Such approach responds to the need for collectors who are professional and boast of high rates of success.
According to this approach, to become successful, collectors simply need to discover the conflict and resolve the consumer’s issues. Collectors must act as financial advisor, negotiator, and even sometimes a friend. The Equation gives collectors the flexibility to address the needs of any situation while on a collection call:
Be prepared. Every collector must be mentally prepared for every call and should be aware of the client and their business model.
Build credibility and curiosity. A collector must be able to establish his credibility in a professional manner, while at the same time raise curiosity of the consumer to differentiate himself from other collectors.
Set expectation. By setting reasonable expectation, you are understood by consumer, especially during your usual calls. This does not only put an expectation of being able to get paid but also sets the pace and conditions on how the relationship will operate.
Analyze the consumer. When making a call, a collector must mirror the consumer and identify how the consumer wants to communicate, and match that style with the collection approach.
Instill urgency and ensure that the payment is important to the consumer.
Draw up a plan. The collector must be able to determine the specific time and place to negotiate with the consumer.
Commit and close. A collector should have the ability or understanding when to close, just like in sales, when there is a need for the consumer to finally commit to the plan and understand the consequences of the agreement.
As Houston says, “collectors find more success because they learn the skill and can identify when it is most likely going to be used in what they do every day.”