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The Steps of a Good Collection Negotiation
You're monitoring one of your collectors and what you're hearing turns your stomach. There may have been some money here at the start of the call, but not now. Now your employee's approaching outright hostility and you're only seconds away from a violation that could cost you thousands.
There's no two ways about it. It's the individual collector's ability to handle a collection call-to negotiate-that will make or break you. Negotiation is where the money comes from. Negotiation is what your reputation is based on. Negotiation is where the rubber meets the road for a collection organization.
But can good negotiation be taught?
Fortunately, there are steps and principles for conducting debt negotiations. This article covers outbound and inbound negotiations, presenting techniques to keep your collection floor humming and your organization rolling safely down the highway to high profitability.
Set the Tone
How do your collectors sound when they ask for the debtor? Businesslike? Intelligent? Confident? Or do they sound like $8.00 per hour call center employees? Listen in and find out. Having positively identified the debtor, the greeting might sound something like this:
"Good morning, John. My name's Ms. Dunn, and I'm m with ABC Systems. I've been trying to reach you about your outstanding obligation to Lendalot Payday Express."
The delivery of that initial greeting determines whether or not the debtor takes your collector seriously. It's got to count.
Make a Firm Demand
Your collector should simply and professionally demand the balance. This should natural, as if she has every reason to expect full repayment immediately. A typical firm demand might sound like this:
"John, the balance owed is one thousand seven hundred ninety-eight dollars and fifty-four cents. I'll need a cashier's check in that amount from you today."
This firm-but-professional approach can have a profound psychological impact on the debtor. But it can't happen if your collector lacks confidence or interest.
Overcome Objections
The debtor will be defensive. It doesn't matter that your collector didn't say "or else." The debtor heard it anyway. He'll immediately start offering excuses. Your collector must remain calm. After listening carefully, she must quickly and emotionlessly dispense with each objection. She should have already analyzed any documents and...