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Whenever you’ve discovered a customer hasn’t paid you on time, you absolutely must get on the phone and give them a call about this payment. It’s never easy, it’s never fun, but it has to be done. Collection calls will increase your recovery rates and help ensure you get that payment as quickly as possibly. The best way to approach these calls is to make sure you’re prepared. The more prepared you are, the more you can guarantee these calls will be constructive and not destructive. Here are 3 ways to guarantee a favorable collection call:
1. Practice in Advance – When you are first getting acquainted with collection calls, it’s worth it to practice a time or two before giving a customer a call. This will help you feel confident and ensure you don’t forget anything. It’s hard to prepare entirely, as you never know how a customer will react, but it is helpful to consider what their possible reactions will be and how you would then handle that particular situation.
2. Remain Calm Under the Pressure – The whole point of practicing in advance is to ensure one thing: that you remain calm. Although it can be very frustrating when a customer doesn’t have the consideration to pay you on time, you can’t let the emotions show through. If you get angry, it will distract you from accomplishing the goals of the conversation. If you turn to anger, it will make the person on the other end of the line become defensive and make the call unproductive. You should also approach the initial call as if you are “inquiring” and not “demanding”. This will help you get a more accurate assessment of the customer’s payment situation and decide whether you think they will send that check in the mail or if you should consider taking further action, such as filing a lien.
3. Set Goals – As you’re preparing for your call with your customer, be sure to set goals for what you what to accomplish during the conversation. This will help keep you on track if nerves get the best of you. As an example, here a few goals you could set for the collection call:
a. Connect with the customer – Before you get down to business, be sure to take a moment to catch up with your customer. Ask them how they’ve been doing, how business has been, etc. This helps the both of you remember the relationship and put the conversation on friendly footing.
b. Find out why the payment is late – After settling in with the customer, before talking about any other business, let them know you are solely calling to remind them their payment date has passed. Ask them about the payment and find out why that payment was late. This will help you with your next goal. As well, take the time to remind them of your credit policy and what happens when a payment is late.
c. Get your customer to make a payment promise – Before hanging up, get your customer to promise payment. Have them put the check in the mail, take their credit card information over the phone or work out a payment plan. The goal is to know when you will see your money before you say good bye. Be persistent in getting this answer from them.
Collections always is and always will be a sensitive subject. However, the more you prepare yourself to tackle this obstacle, the better you will become at collections and increasing your recovery rates.