Collectors "Super Sell"

I have written before that good collectors use similar tools and behaviors as sales reps and in fact, collectors must be better than sales reps in the art of “selling.” This is based on the fact that sales reps as a rule abhor the collection function. They don’t like collecting and they’re not going to do a good job doing something they do not like doing. It is also widely believed that the collection function will impair their relationship with the customer and thus interfere with their ability to sell.

It as occurred to me that there is another reason collectors must be better sales reps than sales reps. When you come right down to it, sales people are merely fulfilling a need. Customers want to buy. The role of the sales rep is to persuade the customer to buy what they want, what the need, from them. Collectors on the other hand must persuade customers to do something they do not want to do, pay. The level of difficulty is greater.

When the need is satisfied and the endorphin level has returned to normal, the customer is often left with the realization that the purchase was beyond their ability to pay. In fact if there is a “need” that must be satisfied it is the need to not pay. I have heard from customers who are upside down complain that it is not their fault; rather the blame should be on those who let them buy more than they could afford.

It now becomes the role of the collector to artfully persuade the customer, (now known as the debtor) to do something they do not want to do. They must be persuaded to give something up, crimp their life style, be uncomfortable, delay buying something else or put off paying another vendor. Rather than satisfying a need, the collector must instill a harsh sense of guilt and create an overwhelming sense of obligation. The “need” that must be satisfied now is the removal of guilt and obligation. Not as easy a task as going up to a good buddy and telling them what a great deal they have that will make them feel ecstatic. A collector must create a burden and then show the customer how to unload that burden.

This is why, so often, collectors become counselors for the debtor. The collector advises and guides the customer towards the correct path to monetary salvation. This is no role for a sales rep who more often plays the role of a seducer.

So, why is it companies have entry level personal, ill equipped for such delicate duties, do their collecting and why is it companies are so unwilling to pay for good collectors? The trick to increasing revenue in these hard times is to elevate the collection task and bring in more money. Strategic Credit Management Solutions can help you do that. We’ve been collecting for over thirty years and we are dedicated to making your collection staff super collectors. See our website at http://powerscredit.com/. Please email your comments to patrickpowers@sbcglobal.net.

Guerrilla Collections

I was trying to find out why a local developer had not paid for a special lumber order. I had left a number of messages without a call back. One day I decided to dedicate my life to getting a call back. I started calling about every hour. He was “in a meeting”. Later he was “out to lunch.” By early afternoon he was back in the meeting. I started calling every thirty minutes. By late in the day, I was calling every fifteen minutes. At about four, he called me back, finally. He was exasperated. He told me he had not paid because he discovered he could have bought the product more cheaply elsewhere. Now I had something to work with, a price dispute.

Another time, I was trying to reach the owner of a general contracting firm. Again, I had left a whole lot of messages with the receptionist without the courtesy of a reply. I thought it was very rude of him. So, the next time I called and the receptionist, who sounded sweet polite and had the demeanor of a restaurant hostess, I informed her that since she was the only employee answering the telephone, she alone represented the company and she therefore was solely responsible for getting me paid. She protested, but I was relentless. I told her I wanted an answer and since her boss was not talking to me, she would find out for me, or she could write me out a check. When she tried to remind me she was merely a receptionist, I reminded her that as far as I was concerned she was the only employee and that made her not only the receptionist, but the accounts payable clerk and the Chief Financial Officer as well. I made it clear that I was not expecting anyone else to call me back. The next time I called her, she was to tell me when I could pick up a check. By the end of the call, I think she was whimpering. Not a half hour went by before the owner was calling me. He wanted to complain about my intimidating manner and I wanted him to tell me about payment. He complained for awhile and then he gave me a payment commitment.

I was getting no where with a lumber company until I rang late one afternoon and a warehouse manager picked up the phone. I asked him straight out if his payroll checks were clearing. Then I told him how an involuntary bankruptcy worked and he’d be out of a job. Less than a hour later the owner of the company, calling from his mother’s house in Lake Arrowhead, was screaming at me. The nerve of me telling a low level clerk the things I’d said. And to prove me wrong, he was sending over a personal guarantee. When the corporation filed bankruptcy, I was the only creditor with a personal guarantee.

A friend of mine worked for a hospital in charge of medical supplies. He had failed to pay a supplier because he did not recognize the vendor. After an exchange of calls and letters, he finally received a notice that the vendor was sending over a representative to discuss the bill. Enclosed was a picture of the representative, so that he would be cleared at the front desk. The man in the picture looked so intimidating that my friend fired off a check.

Whenever Verizon wants money from me, I get a text message. Perhaps on all credit applications there should be a space for the guarantor’s cell phone number. That way they can be reached twenty four seven.

The point of all this is, as collectors, sometimes you have to go beyond the normal collection routine. Sometimes you have to take extraordinary means. Strategic Credit Management Solutions can help train your collectors to be more creative and more productive. See our website http://powerscredit.com/. You can e-mail us at patrickpowers@sbcglobal.net. Your comments are welcome.

Go to the Top

A sales rep told me that as a rule, collectors call the wrong people when asking for money. A routine collection call is usually made to the accounts payable clerk employed by the debtor company. This is okay, as far as it goes. An accounts payable clerk processes the billing. Therefore, if you want to know if your invoices are being processed, the payable clerk should be able to tell you. Much of the time learning that your invoices are in process is a good indication that they will be paid sometime in the future. If the company has a regular payment schedule for payment, a processed invoice will be paid according to the debtor’s processing schedule. So much collection activity is spent verifying a known and familiar process. This is not collections. It is only information gathering and unless the collectors are doing some major revenue forecasting, it is useless information except collectors are often asked by someone, when payment is expected from the customer.

A typical collection call is triggered when invoices are past due. Then the collector confirms that payment is in process and is told when the invoices will be paid. Or the collector is told that some or all of the invoices are not in process, for whatever reason, they are lost in the mail, sent to the wrong address, sent without postage or simply on the wrong payable desk. Upon learning of this dilemma, the collector dutifully resends the invoices and waits a sufficient time for them to get into the payable process.

Of course, there is also the possibility that the accounts payable clerk waits for the collector to call before finalizing the payment process.

In all of these situations, the collector is at the mercy of the accounts payable clerk. That is a lot of power given to a clerk; particularly when the clerk has no other authority but to process the invoices. All a payable clerk is supposed to do is receive the invoices, ascertain there is the required back up; signed delivery receipts, purchase orders and whatever additional documentation the debtor company requires from its vendors as a condition of payment.

Arguably, contacting the payables clerk as the first step in the collection process allows the debtor to delay payment. The debtor is always in control of the process and is setting the payment terms. At some point in time, when payment is not received, the collector calls the same clerk repeatedly, only to be told it is out of the payables hands and in the hands of someone authorized to issue payment. That’s when the collector moves up the next level.

So why not just start with that level?

Perhaps, every collection call should be directed to that person who signed the credit application and the corresponding personal guarantee. That person is on the hook. That is the person who agreed to the terms and conditions, promising to pay on time and make collection calls unnecessary. Call that person directly, he or she had the authority to sign the application and has the authority to sign checks. Everyone else is a gatekeeper, preventing you from getting a commitment. Let this person find out for you how the process is going and when payment will be made. It’ll save you a lot of steps, put you in control and since this person does not want to be put on the spot, may even begin to make payments on time.

Next time, I’ll discuss how to get the person on top to take your calls.

This is where Strategic Credit Management Solutions can help. We know the process and we can train your collectors to bring in the cash. See our website http://powerscredit.com/. Your comments are welcome. Send us an e-mail at patrickpowers@sbcglobal.net.