Applying a customer service approach to your collection efforts.
A positive attitude is the first weapon you pull out of your arsenal to collect your past due accounts. The second weapon is a customer service approach. By working with your customers in a positive way you will achieve higher recovery results and most importantly, customer retention.
We have trained our staff extensively on Transactional Analysis. This is the premise that everyone has three ego states. The Parent, Child and Adult ego states make up our beliefs, ideas and communication actions. When you can understand what ego state a person is in, you can work towards achieving your objective with your adult ego state. All three-ego states make up who we are. The Parent Ego State comes out early. We hear children take control and go into their parental ego state early in life. We also can see when children are reasoning and objective and in their adult ego state. This ego state usually takes a little while to develop. If a child has reasoning and objective thinking, they are usually deemed mature. That’s because all three-ego states have developed, and they are aware of making logical decisions. Collections can be easy once you understand the psychology behind it. When someone is in the Parent ego state, it will generally trigger the other person to act from their Child ego state, or their own Parent ego state. This generally ends up with both parties butting heads. We recommend working with your customers in the Adult ego state. This is the objective, professional problem solving state. It involves simple questions that will get your customer on the right track to solve the issue at hand.
The Parent Ego State is where I see most collection calls fail. The collector tries to be judgmental and controlling. They usually get the customer into the Child Ego State. The customer then lies and is generally on the defense. You get a lot of broken payment arrangements because the customer said whatever he had to, to get the collector off of the telephone. These are areas where a conversation could begin to slip and the customer could become defensive. By being aware of the customers Ego State you can get the conversation back on track and deal with resolving the account.
It is easy to slip into the Parent Ego State during collection calls. You must teach yourself to ask information gathering questions, who, what, how, etc., and not be judgmental. By using information gathering questions, you can get more than a yes or no from your customers, and you will get the information you need to solve any problems. Objective and logical thinking keep people calm and open to further discussion. Once things have opened up, you can then verify information that you have on file and update all contact information as to not lose communication with the customer. Let the customer speak their peace. Collections are 80% listening and 20% talking. By learning the reason behind your customer’s problem or concern, you can address it logically and come to a reasonable resolution that satisfies both parties. Sometimes it really helps to understand the situation your customer is in and give them an opportunity to suggest a solution that fits their means.
Can you reason with a child while their having a tantrum? Rarely.
When a customer becomes irrate, you need to discontinue the conversation, and have somebody else deal with the customer. There is no way to reason with somebody once they have lost control. These are extreme cases and require you to take close note to where the problem arose. Sometimes there are just personality conflicts where you are unable to deal with a particular customer. The secret to resolving these situations is immediate response by another one of your staff that has the authority to resolve the issue at hand. Once a customer is passed on to another employee, the customer will be primed to go into the Adult Ego State. The customer will have cooled him or her self down and will be looking for someone to reason with. If you use this theory, you will resolve a lot of these situations before any problems arise.
By using the Adult Ego state during collection calls, the collector can refer back to the signed credit and financial agreements and reason with the customer with what was set up and the importance of following through on their obligations. They can use negotiation and mediation techniques that will allow them to work out some sort of arrangement with the customer. Being professional and objective in a collection call will leave your staff feeling comfortable with the intimidating task of calling people for money. The collections will no longer go on the back burner, they will become a daily priority. This is necessary for the success of any business.
By using Transactional Analysis you will be more professional and fully trained to handle problems and issues before they get out of hand. Collections is a sensitive business, and I have found by using these techniques you will collect more accounts and have less problems.
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