By Dean Kaplan
Every company needs to occasionally use their in-house debt collectors to encourage their customers to pay overdue invoices. Especially in a tough economy, in-house collection calls may increasingly become a necessity. Here are some helpful hints for maximizing the success of your in-house debt collectors.
Use e-mail to reach your customers about payment problems. Technology can be immensely helpful in all aspects of your business. When time and financial resources are limited, communicating via e-mail can be a great time saver.
Call not only your delinquent customers, but also customers whose payments are due within the next 20 days. By calling a customer ahead of payment time just to check in, this can identify an emerging problem before it happens and can give the customer and you a chance to work out a solution. Also, this can show the customer that you care and that they are important to you.
Train your customers right from the start by making sure they fully understand your credit policy and payment terms. Whenever you land a new customer, take the time to call them and ask them if they have any questions about the credit policy. This upfront communication is proactive and is a good way to reach out to a new customer and make them feel valued.
If a customer starts to argue about a late payment, chances are he/she is trying to gain time by creating a conflict. If this happens, stay calm. Do not argue back. Stay professional and try to be a good listener. Calmly respond to the issue, and then move the discussion onto your ultimate goal of at least getting a promise to pay. Following the conversation, summarize the points that were discussed, including payment terms, if applicable and send to the customer in an e-mail or fax. Ask the customer to send a confirming e-mail or fax back to you. A clear paper trail is very helpful in these situations.
Reduce the credit line of customers who consistently make late payments. However, let them know that as their payment history improves, they will be eligible for a credit increase. If possible, try to use this as a motivation rather than having it appear as a punishment.
Give your customers the option of having invoices e-mailed or faxed rather than mailed. Frame this in a way that makes it seem like you are doing them a favor, when in reality, it is easier for you and saves time and money. This is another example of letting technology work for you.
Be fully informed and confident of yourself before you make a collection call to your customer. Do your homework ahead of time. Your confidence will transmit over the phone line and your success rate will be positively impacted.
Try to match your collection objectives with the customer’s needs. If you can do this, your chances of reaching a favorable settlement with your customer will be much greater. The goal is to find a solution that can work for both parties. Create a win-win situation so your customer can save face.
Be enthusiastic and energetic when you are making collection calls. This will help you enjoy your interactions with others and send a clear message to the customer that you are committed to the task at hand of getting paid. If the debt collectors don’t care, then your customers won’t either.
Speak clearly. Use proper grammar, and choose a vocabulary that is understandable. Don’t use words that your customer won’t understand. Be sure you are speaking on the same level as your customer.
All of these tips can help make your in-house debt collectors more successful. The more proactive your company is in its debt collections, the more profitable your company will become.
The Kaplan Group is a boutique collection agency specializing in large (over $10,000) debt collections due from businesses. Founded in 1991, the company has a stellar reputation (A+ rating with the Better Business Bureau) and is recognized as one of the leading collection agencies for results on large and complex matters.
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