Telephone Collections

The Telephone Collection The Telephone Collection WorkshopWorkshop

Top Performance Inc./Credit In Canada

October 2005

The Changing Face of CreditThe Changing Face of Credit

The Changing Face of CreditThe Changing Face of Credit

Scarcity of solid credit information

The Changing Face of CreditThe Changing Face of Credit

Scarcity of ongoing credit informationMore sophisticated customers

The Changing Face of CreditThe Changing Face of Credit

Scarcity of credit informationMore sophisticated customers Better educated

The Changing Face of CreditThe Changing Face of Credit

Scarcity of solid credit informationMore sophisticated customers Better educated“Customer-power”

The Changing Face of CreditThe Changing Face of Credit

Scarcity of credit informationMore sophisticated customers Better educated“Customer-power”Legal system and costs tend to favour

debtorOther creditors taking precedence

It’s Safe To Say That It’s Safe To Say That Delinquency Isn’t Going AwayDelinquency Isn’t Going Away

Wishing and Hoping Won’t Cut It Wishing and Hoping Won’t Cut It

It’s going to happen – one customer at a time

What Hasn’t Changed?What Hasn’t Changed?

Time – the day is exactly the same number of hours

Not much automation in billing/collectionsMistakes in billing are compounded by

automation (computers are stupid!)

Question?Question?

Has it simply become good business for some customers to pay on their own terms or wait until suppliers call?

Question?Question?

Has it become good business to for customers to pay on their own terms or wait until suppliers call?

In other words, terms of sale move from contractual terms to tolerated terms

“My job is to manage my payables – not manage your receivables”

“I decide – should I pay late? If so – how late?”

- A Controller in Kingston

Problem AreasProblem Areas

No real agreement – more implied or by conduct

The creditor doesn’t know why – the blurring of “willing and ability”

The fear, real or perceived, that if pushed, customer will go to competitor

What We Need To DoWhat We Need To Do

Become better communicators Target solutions rather than take a shotgun

approach – “willing it” won’t make it happen Work on recurring problems Reduce risk by becoming more credit-conscious –

work on financial info Reduce risk – at least in time

Wouldn’t It Be Nice To Know?Wouldn’t It Be Nice To Know?Did the customer receive our invoice?Did the invoice match their purchase?Was it approved by their buyer?Have they scheduled invoice for payment?What is the payment schedule date?Are they going to deduct a portion – why?Do they have enough money to pay?Have they paid? When?

The best collection techniques are the preventative ones

When Does Collections Start?When Does Collections Start?

When Does Collections Start?When Does Collections Start?

When account goes overdue?

When Does Collections Start?When Does Collections Start?

When account goes overdue?When account is opened or sale is made?

Collection of Accounts StartsCollection of Accounts Starts

When they go overdue When you get around to it When the bill is sent When the account is opened

Positioning Starts When Positioning Starts When Account Is OpenedAccount Is Opened

An account properly opened is half-collected

Positioning Starts When Positioning Starts When Account Is OpenedAccount Is Opened

An account properly opened is half-collected The establishment of the rules, the needs of the

parties and agreement as to how exceptions will be handled

Positioning Starts When Positioning Starts When Account Is OpenedAccount Is Opened

An account properly opened is half-collected The establishment of the rules, the needs of the

parties and agreement as to how exceptions will be handled

It is not unlike trying to train a 10 year old dog – very difficult – better when the animal was a puppy

A Breakdown of ProcessA Breakdown of Process

1. Opening accounts

A Breakdown of ProcessA Breakdown of Process

1. Opening accounts1.1 Informative stage

A Breakdown of ProcessA Breakdown of Process

1. Opening accounts1.1. Informative stage2. Reminder stage

A Breakdown of ProcessA Breakdown of Process

1. Opening accounts1.1. Informative stage2. Reminder stage3. Discussion stage

A Breakdown of ProcessA Breakdown of Process

1. Opening accounts1.1. Informative stage2. Reminder stage3. Discussion stage4. Recovery stage

Reminder StageReminder Stage

Invoice confirmationsPre-remindersDo early??

Discussion StageDiscussion Stage

Moves from 1 way to 2 way communication

Discussion StageDiscussion Stage

Moves from 1 way to 2 way communication Very different skillsets - assertiveness- integrity- credibility- problem-solving abilities

Number 1 Reason For Lack of Number 1 Reason For Lack of SuccessSuccess

No Plan

Instead What Customers Instead What Customers Often GetOften Get

Apologetic/timidityTraining that it’s OK to wait until you call –

the telephone call is just an invoice noticeSometimes different stories Occasionally confrontation/aggressiveness Being placed on hold without notice to

buyer

Some Other ObservationsSome Other Observations

No one aspires to do collection work. Backgrounds/experience and education rarely apply

Very few of us had any training other than “battleground experience” or through peer training

And… that is not an issue when the collections are routine.

Most people have good motivation and desire to other areas

Observations 2Observations 2

Desire and motivation are not skillsSome people bring some natural ability in

more than others but…Natural abilities will only take a person so

far When we add an increase to workload and

new tasks, it becomes obvious that training will help you when your charisma runs out.

Evidence of AverageEvidence of Average

Calling same people over and over each month

When there are more than 3-4 staff, why are some better than others?

Lots of “coasting is evident”10 years experience is usually more like 2

years of experience multiplied by 5 years of time

Building A CallBuilding A Call

PreparationAnticipation Practice

Having Reasons WhyHaving Reasons Why

Why should I pay?

Three ApproachesThree Approaches

DirectAssumptiveIndirect (with border)

Dealing With Dealing With Concerns/Objections/StallsConcerns/Objections/Stalls

Use tie-downProbe to clarifyGo to alternative plan

Payment PlansPayment Plans

Get in writingKeep them short Remember there are other creditorsPerhaps think settlement – talk over with

boss

‘‘The secret of success is to do The secret of success is to do common things uncommonly common things uncommonly

well.’ well.’ – John D Rockefeller– John D Rockefeller

Be The Best!Be The Best!

: :

Needs AnalysisNeeds Analysis

Results should be a game plan to be the bestBeing Five Star is not an accidentEvery customer contact point has been

analyzed, time managed and recurring issues dealt with.

Instructional Method: Instructional Method: Case Study Case Study

What Do They Want?What Do They Want?

Options such as easy ways to payHelp if they need it Going the extra mileSingle-source for information (or at least

the same story)

Building a relationship is based on respect and mutual effort – it takes time and effort

Key Skills Checklist Key Skills Checklist

1. How well do you communicate with customers?2. Does someone “talk money” with new

customers?3. Do you attempt to train customers or are they

training you?4. Do you have a plan to decrease delinquency one

account at a time?5. Do you consider yourself pro-active or re-

active?