This document provides guidance on effective telephone collection techniques. It discusses understanding company culture and customers, communicating professionally, gathering information from debtors, negotiating payment plans, and following up to ensure agreements are kept. The goal is to resolve issues respectfully while representing the company's interests.

1. Telephone Collection Techniques

2. Time Is Money

3. Considerations
Company
Industry
Customers

4. Your Company and Industry Culture?
0Sales Driven vs. Accounting
Driven
0How competitive is the
industry you are in?

5. Know Your Customers
0 When do they pay?
0 What are their requirements?
0 Who to contact
0 How to contact

6. The Customer
0 Conform your approach to the customer type:
0 Small high risk
0 Startups
0 Bureaucracies - Large company, government
0 Privately held vs. Publicly owned
0 Contractual partners

7. The Customer
0 What do you need to know to facilitate payment:
0 Does customer provide notice of payment?
0 Should you call to check on status before due?
0 If an invoice is missed for payment, how do you best
address?
0 What do they need from you to facilitate payment
more quickly?

8. Debtor Types
0 Able to pay
0 Honestly overlooked
0 Procrastinator
0 Grievance or dispute
0 Actively-avoiding payment
0 Poor budgeter
0 Staller
0 Temporary problem
0 High-risk
0 Eventual insolvent
0 Hardship case
0 Credit criminal

9. Your Communication Style
0 When you are collecting from a customer, you
represent your company so don’t . . .
0 Use slang or swear
0 Lose your cool
0 Be less then professional
0 Misrepresent your intentions

10. Your Collection Style
0 Reflects your company’s culture
0 Be pleasant yet firm.
0 Use the nonverbal part of your voice
0 Be persistent.
0 Be helpful.
0 Do what you say you’re going to do.
0 Try to resolve the issue with the first contact.

11. The Good, the Bad
and the Ugly

12. Telephone Collections
0 Why?
0 When?
0 Five phases of a collection call.
0 Making the call.
0 Handling objections.
0 Why can’t they pay?
0 When will they be able to pay?

13. Why telephone contact?
0 Cost-effective
0 Provides you with immediate feedback.
0 Letters are being ignored.
0 When the customer’s sincerity is in doubt.

14. When?
0 Factors to consider
0 Best time to reach
0 Best place to reach
0 When did you call last

15. Five Phases of a Collection Call
0 Preparation
0 Identification
0 Fact finding
0 Agreement
0 Follow-up

16. Precall Preparation
0 Validate the amount.
0 Evaluate the customer’s payment record.
0 Analyze the customer’s collection file.
0 Map out a plan of action.

17. Who to ask for?
0 The party who signed the agreement
0 The person who pays the bills
0 The person who can force payment

18. Identification of the Parties
0 Do you have the right
person on the phone?
0 Consumer vs. Commercial

19. Identify Yourself
0 Be clear about who you are and who you represent.

20. Identify the Personality Type – Why?
0 A good collector sells everyday.
0 You need to build relationships.
0 You are the “solution.”

21. Four Basic Personality Types
0 Steady Relater – open/indirect
0 Usually cordial, willing to talk, noncommittal
0 Interactive Socializer – open/direct
0 Cordial, willing, but can he get it done?
0 Cautious Thinker – self-contained/indirect
0 Quiet and reserved, noncommittal
0 Dominant Director – self-contained/direct
0 “Here’s what I’m gonna do for you.”

22. Fact Finding
0 The tactical pause –
What do you hope to gain?

23. Use of Fact-Finding Questions
0 Requires the customer to supply specific reasons
for late payment.
0 Provides collector with clues to potential solutions.
0 Ask questions but don’t interrogate.
0 No loaded questions.

24. Examples
0 How did this happen?
0 What caused you to fall behind?
0 What is the specific reason for your payment
problems?
0 What can we do to help you get back on track?

25. Listening
 Let the customer talk.
 Identify the central
problem.
 Search out solutions.
 Tune in to the customer.
 Earn the customer’s
respect.
 Narrow the scope of the
problem.

26. Reacting (cont.)
0 Complaints about goods and services
0 Must be taken seriously.
0 Don’t lose control by passing the buck.
0 Investigate, promptly take the necessary action, and
report back to the customer.

27. Reacting (cont.)
0 Denials of responsibility
0 Must be treated with same courtesy as customers
who complain.
0 Explanation of late payment or “the dog ate my
homework.”

28. Challenges to Creditor’s Authority
0 They admit they owe, but challenge you to collect it.
0 They will attempt to distract or upset you.

29. What If They Don’t Want
to Pay?
0 “Our policy is to put past-due accounts on credit
hold [and . . .].”
0 “This may impact your future shipment schedule.”
0 “Customer delinquency is reported to the major
credit bureaus.”
0 “Unless we can resolve this, we may have to use
other collection methods.”
0 Contact your sales rep.
0 Escalate the claim as necessary.

30. Asking for Payment in Full
0 Present with confidence.
0 Presume an affirmative response.
0 Must be specific as to when.
0 Should identify the desired form of payment.

31. Reaching an Agreement
0 Negotiating a payment plan.
0 Take control - ask for as much as you can as quickly
as you can get it.
0 Sell the benefits of the plan.
0 Compromise when necessary.
0 Obtain specific commitments.
0 Always require a promissory note.
0 Payment plan and continuing shipments

32. Reaching an Agreement (cont.)
0 Overcoming objections.
0 Separate the sincere from the insincere.
0 What is the customer objecting to?
0 Listen to what the customer is telling you.
0 Break the proposal into smaller, more manageable
pieces.
0 Obtain agreement on undisputed points.
0 Return to disputed points and negotiate solutions.

33. Reaching an Agreement (cont.)
0 Overcoming Objections
0 Look for answers – Double-check your records and
make sure you know/have the facts.
0 Get to the problem as quickly as possible.
0 Take appropriate action.

34. Reaching an Agreement
0 Payment promises:
0 Be specific.
0 Repeat back the arrangement.
0 Ask for an immediate good faith payment.

35. Finalizing the Agreement
0 Summarize the terms of the agreement.
0 Confirm in writing.
0 If appropriate, get a promissory note.
0 Mark your file for follow-up.
0 Update your records.
0 Keep Sales Department informed.

36. Following Up
0 Training the customer to keep the agreement.
0 Follow-up progressively.

37. Tips
0 Be willing to say no to any unacceptable
arrangement.
0 Always throw the burden back on the debtor.
0 Never lose your cool.
0 If the debtor is cooperative and makes reasonable
offers, you also need to cooperate.

38. Tips (cont.)
0 If the debtor is not reasonable, say what you’ll do
and do it.
0 Your job is to have a policy and a point of view, not
a snappy comeback.
0 Essentially your point of view is,
0 “You received the good or service, and you haven’t paid
for it.”
0 “Let’s figure out how to get over this hurdle and move
forward in our relationship.”

39. Summary
0 Company Culture Must Be Considered.
0 Resources
0 Flexibility
0 Effectiveness
0 Know Your Customers
0 Listen, Listen, Listen!
0 Never lose your temper.
0 Maintain control of the conversation.
0 Always keep your word.