Step 1: Planning & Preparation
When preparing to make a collection call there are many things to consider, but none more important than understanding: What is the current status of the account?
Before you pick up the phone, it’s critical that you have all the specifics about the debt you’re attempting to collect. Having the facts in front of you will also help you from getting derailed during the conversation. At a minimum, you should be prepared with the following:
- The exact amount that is due
- What was the original due date?
- Background information about what the debt is for
- The age of the account
- What prior collection efforts have taken place?
- Are there other open invoices (current or past due) on the account?
It’s also important to take a look at the company’s payment history over time. Are they habitually late in paying, have payments slowed over time, or is past-due payment uncharacteristic of this customer?
Have the records you need available via computer and hard-copy file, including supporting documents such as copies of faxes, letters, or notes sent – in addition to a copy of the invoice.
Next, you’ll want to determine if your company plays any role in the delinquent payment, by asking:
Are we at fault?
Before picking up the phone, take some time to check your records for any obvious problem which might be the cause for delayed payment.
- Has payment been received without the information being updated in your system?
- Was the invoice mailed or emailed to the correct address and contact person?
- Did you neglect to apply due credit or is there anything else on the invoice(s) that is inaccurate?
Additionally, collectors should be trained to assess the economic condition of the customer before making the call. Situations occur that require sympathetic consideration, such as a recent change in the industry, including regulations and other external factors. It’s advisable to determine as much of the following as possible:
- Is the company experiencing issues with any of their customers?
- Are these issues beyond their control (be sensitive to issues like natural disasters: floods, fires, hurricane, etc.)?
- What is happening in their industry?
Lastly, collectors must be ready to innovate and create a strategy to effectively receive a payment commitment. This takes advance planning and an understanding of what their company is willing – and not willing – to accept. Advance thought should be given to what kind of payment proposal will be offered, if any, and at what point to escalate to a third-party.
Step 2: Making the Call
Skills of a proficient collector include the ability to analyze what is being said and to maintain control of the conversation. Most importantly, however, is to make sure that you’re speaking with the right person – a decision-maker or someone who has the ability to authorize payment.
Getting through gatekeepers can be difficult, but is extremely important. You may not get through the first time, but take notes and be polite. Ensure you write down the name of the person you spoke with and see if you can determine his or her role in the company.
When you do reach the right person, the first thing you want to do is state the reason for your call and ask for payment in full.
Example: “Mr. Jones, I am calling about your past due account with “X”. You currently owe a total of $XXX. Can I count on your mailing full payment today?
Then you want to stop talking. Also known as taking a “strategic pause”. Wait for the debtor to answer. Oftentimes, the next person who talks loses.
Many things can (and usually will) come up during the account discussion. Be prepared for all possible objections to ensure you can maintain control of the conversation. Some frequent excuses for non-payment include:
- Cash flow issues
- Authorized payer isn’t available
- Computers are down ” or some other â€˜technical’ reason that is beyond their control
- Company has been acquired or is going out of business
- Company has filed for bankruptcy
- They can’t pay the full amount
- They already paid
- The check is in the mail
If your customer says that the account has been paid, or that the check is in the mail, find out when it was paid, including the date the check was mailed, ask for the check number and/or a receipt.
Without a doubt, there will be times when your customer will refuse to pay, or not be able to make payment in full. As a general rule, work to go beyond their initial reason for non-payment by asking as many follow up questions as possible. For example, if they cannot make full payment at the time of your call, ask “By how much are you short?”. This will prompt them to really think about why they can’t make full payment. Another idea is to ask “How much are you willing to pay today?”. Again, this puts the onus on your customer to make the first move, allowing you to control where the conversation goes next.
Above all, do your best to be positive and ensure the customer understands that you would like to continue to do business with their company (assuming you do!). Asking some of the following questions can help get the payment you need, but they can also help maintain customer relations:
- Do you have a copy of the invoice in front of you? If not, please confirm your email address and I’ll send it right now.
- How much are you able to pay today?
- Would it help if I set you up on a payment plan?
- When can we expect to receive payment in full (always get a specific date – do not accept vague responses like ‘next month’)?
- Is there anything else I can help you with?
Be assertive – not aggressive; and avoid arguing at all costs.
The tone, pitch, inflection and speed of your speech all have a powerful influence on telephone communication; and your mental state will certainly have a strong impact – both on how you handle the call and how the customer on the other end responds to you.
Treat each collection call as it were the first call of the day. Put a smile on your face! While the person on the other end of the line won’t be able to see it, they’ll hear it in your tone.
Other helpful telephone communication tips include:
- Don’t chew gum or drink while on the phone
- Speak a bit slower and pause more frequently than usual
- Lower the pitch of your voice slightly
- Enunciate your words, especially when speaking to foreign customers
- Address the customer by name throughout the conversation
- Listen more than you speak and do not talk over your customer
- Repeat back what you agree on
When approaching your calls with a positive attitude, you’re at least starting out on the right foot. However, we know that each call can be as unpredictable as the next; and sometimes customers get upset or even downright irate.
If a customer starts yelling or using abusive or profane language, stay calm. If you’re unable to get a word in, simply stop talking. Eventually, the person on the other end of the line will wind down. Hearing silence on the other end of the line can often help bring the conversation to a more civil level.
While you may not be able to bring in full payment with each and every call, receiving a promise to pay or a partial payment also constitutes success. Offer every option, including post-dated check(s), check by phone, credit card payment, ACH or other form of wire transfer.
When you receive a promise to pay, make sure you get it in writing with a letter of commitment or at least with an acknowledgment of the debt to avoid the problem of a future dispute. When your customer is ready to make a payment, try to obtain either a Promissory Note or post-dated check(s). After all, if the customer makes a promise to pay in the future, your requesting these documents is nothing more than ensuring they make good on that promise.
Step 3: Closing the Call
Regardless of which direction the collection call goes, don’t hang up without summarizing the discussion that took place and outlining the next steps. Reinforce payment arrangements and obtain specifics. For example: your customer is going to make a payment in 1 week (note the exact date) by check (obtain bank/account information) and weekly checks will continue to be sent until paid in full (confirm the subsequent dates they will be mailed on). Express appreciation for the payment plan and make sure customer writes down your address and repeats it back to you.
Verbally review these plans and follow up via email immediately after the call to reinforce importance of keeping the agreement and to reassure the customer that he or she is doing the right thing for their company. After you’ve sent the recap email, ensure you document the conversation in your collection system, as necessary.
Why the telephone collection call still reigns over email, snail mail and SMS:
- It is immediate and can produce a response within moments of the connection being made
- It’s personal and allows for verbal exchange between two people
- It provides the ability to ask questions, obtain information, and then react to new information
- It allows you to be flexible in your approach, changing strategy as the conversation warrants
- It is inexpensive and more immediate than a physically-mailed letter
- It can result in an agreement on the next steps
For tips and information about commercial collections, check out these other articles on our website:
- 13 Strategies to Speed up Collections
- 9 Steps to Help Your OCA Help You
- Collection Litigation: Court Costs and Suit Fees
- Evaluating Your OCA’s Performance
- Nine Collection Tips for Small Business
- Nine Guidelines for Selecting the Right Collection Agency
- Payment Plan Negotiations
- Regulating Commercial Debt Collection
- Six Tips for Making Collection Calls that Get Results
- The ABCs of Telephone Collections
- Top 10 Reasons Customers Delay Payments
- Using an OCA to Execute Debtor Judgments
- Working with an OCA