Telephone Collections

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Telpehone collection workshop for collectors

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Telephone Collections

  1. 1. The Telephone Collection Workshop Top Performance Inc./Credit In Canada October 2005
  2. 2. The Changing Face of Credit
  3. 3. The Changing Face of Credit <ul><li>Scarcity of solid credit information </li></ul>
  4. 4. The Changing Face of Credit <ul><li>Scarcity of ongoing credit information </li></ul><ul><li>More sophisticated customers </li></ul>
  5. 5. The Changing Face of Credit <ul><li>Scarcity of credit information </li></ul><ul><li>More sophisticated customers </li></ul><ul><li>Better educated </li></ul>
  6. 6. The Changing Face of Credit <ul><li>Scarcity of solid credit information </li></ul><ul><li>More sophisticated customers </li></ul><ul><li>Better educated </li></ul><ul><li>“Customer-power” </li></ul>
  7. 7. The Changing Face of Credit <ul><li>Scarcity of credit information </li></ul><ul><li>More sophisticated customers </li></ul><ul><li>Better educated </li></ul><ul><li>“Customer-power” </li></ul><ul><li>Legal system and costs tend to favour debtor </li></ul><ul><li>Other creditors taking precedence </li></ul>
  8. 8. It’s Safe To Say That Delinquency Isn’t Going Away
  9. 9. Wishing and Hoping Won’t Cut It <ul><li>It’s going to happen – one customer at a time </li></ul>
  10. 10. What Hasn’t Changed? <ul><li>Time – the day is exactly the same number of hours </li></ul><ul><li>Not much automation in billing/collections </li></ul><ul><li>Mistakes in billing are compounded by automation (computers are stupid!) </li></ul>
  11. 11. Question? <ul><li>Has it simply become good business for some customers to pay on their own terms or wait until suppliers call? </li></ul>
  12. 12. Question? <ul><li>Has it become good business to for customers to pay on their own terms or wait until suppliers call? </li></ul><ul><li>In other words, terms of sale move from contractual terms to tolerated terms </li></ul>
  13. 13. “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
  14. 14. Problem Areas <ul><li>No real agreement – more implied or by conduct </li></ul><ul><li>The creditor doesn’t know why – the blurring of “willing and ability” </li></ul><ul><li>The fear, real or perceived, that if pushed, customer will go to competitor </li></ul>
  15. 15. What We Need To Do <ul><li>Become better communicators </li></ul><ul><li>Target solutions rather than take a shotgun approach – “willing it” won’t make it happen </li></ul><ul><li>Work on recurring problems </li></ul><ul><li>Reduce risk by becoming more credit-conscious – work on financial info </li></ul><ul><li>Reduce risk – at least in time </li></ul>
  16. 16. Wouldn’t It Be Nice To Know? <ul><li>Did the customer receive our invoice? </li></ul><ul><li>Did the invoice match their purchase? </li></ul><ul><li>Was it approved by their buyer? </li></ul><ul><li>Have they scheduled invoice for payment? </li></ul><ul><li>What is the payment schedule date? </li></ul><ul><li>Are they going to deduct a portion – why? </li></ul><ul><li>Do they have enough money to pay? </li></ul><ul><li>Have they paid? When? </li></ul>
  17. 17. The best collection techniques are the preventative ones
  18. 18. When Does Collections Start?
  19. 19. When Does Collections Start? <ul><li>When account goes overdue? </li></ul>
  20. 20. When Does Collections Start? <ul><li>When account goes overdue? </li></ul><ul><li>When account is opened or sale is made? </li></ul>
  21. 21. Collection of Accounts Starts <ul><li>When they go overdue </li></ul><ul><li>When you get around to it </li></ul><ul><li>When the bill is sent </li></ul><ul><li>When the account is opened </li></ul>
  22. 22. Positioning Starts When Account Is Opened <ul><li>An account properly opened is half-collected </li></ul>
  23. 23. Positioning Starts When Account Is Opened <ul><li>An account properly opened is half-collected </li></ul><ul><li>The establishment of the rules, the needs of the parties and agreement as to how exceptions will be handled </li></ul>
  24. 24. Positioning Starts When Account Is Opened <ul><li>An account properly opened is half-collected </li></ul><ul><li>The establishment of the rules, the needs of the parties and agreement as to how exceptions will be handled </li></ul><ul><li>It is not unlike trying to train a 10 year old dog – very difficult – better when the animal was a puppy </li></ul>
  25. 25. A Breakdown of Process <ul><li>1. Opening accounts </li></ul>
  26. 26. A Breakdown of Process <ul><li>1. Opening accounts </li></ul><ul><li>1.1 Informative stage </li></ul>
  27. 27. A Breakdown of Process <ul><li>1. Opening accounts </li></ul><ul><li>1.1. Informative stage </li></ul><ul><li>2. Reminder stage </li></ul>
  28. 28. A Breakdown of Process <ul><li>1. Opening accounts </li></ul><ul><li>1.1. Informative stage </li></ul><ul><li>2. Reminder stage </li></ul><ul><li>3. Discussion stage </li></ul>
  29. 29. A Breakdown of Process <ul><li>1. Opening accounts </li></ul><ul><li>1.1. Informative stage </li></ul><ul><li>2. Reminder stage </li></ul><ul><li>3. Discussion stage </li></ul><ul><li>4. Recovery stage </li></ul>
  30. 30. Reminder Stage <ul><li>Invoice confirmations </li></ul><ul><li>Pre-reminders </li></ul><ul><li>Do early </li></ul><ul><li>? </li></ul><ul><li>? </li></ul>
  31. 31. Discussion Stage <ul><li>Moves from 1 way to 2 way communication </li></ul>
  32. 32. Discussion Stage <ul><li>Moves from 1 way to 2 way communication </li></ul><ul><li>Very different skillsets </li></ul><ul><li>- assertiveness </li></ul><ul><li>- integrity </li></ul><ul><li>- credibility </li></ul><ul><li>- problem-solving abilities </li></ul>
  33. 33. Number 1 Reason For Lack of Success <ul><li>No Plan </li></ul>
  34. 34. Instead What Customers Often Get <ul><li>Apologetic/timidity </li></ul><ul><li>Training that it’s OK to wait until you call – the telephone call is just an invoice notice </li></ul><ul><li>Sometimes different stories </li></ul><ul><li>Occasionally confrontation/aggressiveness </li></ul><ul><li>Being placed on hold without notice to buyer </li></ul>
  35. 35. Some Other Observations <ul><li>No one aspires to do collection work. Backgrounds/experience and education rarely apply </li></ul><ul><li>Very few of us had any training other than “battleground experience” or through peer training </li></ul><ul><li>And… that is not an issue when the collections are routine. </li></ul><ul><li>Most people have good motivation and desire to other areas </li></ul>
  36. 36. Observations 2 <ul><li>Desire and motivation are not skills </li></ul><ul><li>Some people bring some natural ability in more than others but… </li></ul><ul><li>Natural abilities will only take a person so far </li></ul><ul><li>When we add an increase to workload and new tasks, it becomes obvious that training will help you when your charisma runs out. </li></ul>
  37. 37. Evidence of Average <ul><li>Calling same people over and over each month </li></ul><ul><li>When there are more than 3-4 staff, why are some better than others? </li></ul><ul><li>Lots of “coasting is evident” </li></ul><ul><li>10 years experience is usually more like 2 years of experience multiplied by 5 years of time </li></ul>
  38. 38. Building A Call <ul><li>Preparation </li></ul><ul><li>Anticipation </li></ul><ul><li>Practice </li></ul>
  39. 39. Having Reasons Why <ul><li>Why should I pay? </li></ul>
  40. 40. Three Approaches <ul><li>Direct </li></ul><ul><li>Assumptive </li></ul><ul><li>Indirect (with border) </li></ul>
  41. 41. Dealing With Concerns/Objections/Stalls <ul><li>Use tie-down </li></ul><ul><li>Probe to clarify </li></ul><ul><li>Go to alternative plan </li></ul>
  42. 42. Payment Plans <ul><li>Get in writing </li></ul><ul><li>Keep them short </li></ul><ul><li>Remember there are other creditors </li></ul><ul><li>Perhaps think settlement – talk over with boss </li></ul>
  43. 43. ‘The secret of success is to do common things uncommonly well.’ – John D Rockefeller
  44. 44. Be The Best! :
  45. 46. Needs Analysis <ul><li>Results should be a game plan to be the best </li></ul><ul><li>Being Five Star is not an accident </li></ul><ul><li>Every customer contact point has been analyzed, time managed and recurring issues dealt with. </li></ul>
  46. 47. Instructional Method: Case Study
  47. 48. What Do They Want? <ul><li>Options such as easy ways to pay </li></ul><ul><li>Help if they need it </li></ul><ul><li>Going the extra mile </li></ul><ul><li>Single-source for information (or at least the same story) </li></ul><ul><li>Building a relationship is based on respect and mutual effort – it takes time and effort </li></ul>
  48. 49. Key Skills Checklist <ul><li>How well do you communicate with customers? </li></ul><ul><li>Does someone “talk money” with new customers ? </li></ul><ul><li>Do you attempt to train customers or are they training you? </li></ul><ul><li>Do you have a plan to decrease delinquency one account at a time? </li></ul><ul><li>5. Do you consider yourself pro-active or re-active? </li></ul>

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