Be prepared; speak with confidence and authority; and be an expert negotiator. By Brad Young Sponsored by SWBC 
Those of us that have been in the collections business for some time understand that calling and collecting past-due payments is not always a perfect science; sometimes, it’s more of an art. Not everyone has the confidence and tenacity to be a successful collection agent, so hiring the right people is critical to the overall success of any collection operation. However, even the most qualified, highly trained collectors should have a strategy and process in place to achieve optimal success every time they make contact with a delinquent borrower.
- Be prepared. Before beginning a call, the agent should be armed with all necessary details of the debt—the amount owed, the type of loan, the due date, the number of days the loan is past due, and basic information about any other existing accounts within the institution. Essentially, the agent should be armed with a complete picture of the debtor’s situation so the agent can’t be derailed by questions requiring research. It’s also a good idea for the agent to have an idea about the debtor’s payment history. Is the borrower typically late on payments? A better understanding of the member’s situation may give the agent just the information needed to help resolve the situation. If automated dialer technology is being used, obviously the collector won’t be able to prepare in advance of the call. Consequently, your collection software platform should be intuitive and clear so that information about the delinquent debt can be quickly accessed to ensure the collector is not fumbling around multiple screens in order to facilitate the conversation. Preferably, your dialer technology would “pop” the specific borrower record so time is not wasted attempting to locate the loan in your systems.
- Speak with confidence and authority. Collecting debt can be a stressful job. Collectors often spend their time talking to borrowers who can get frustrated or emotional at any given time. Yet even in heated situations, collectors must remain calm and respectful, but firm. Collectors should speak slowly, clearly, and with a calm tone. Being properly prepared with the borrower’s information can help increase confidence, because the collector will be able to definitively answer questions and overcome objections. The collector should strive to remain in control of the situation, no matter how emotional the borrower may become. This helps to demonstrate that, while the agent is willing to work with the borrower, the ultimate goal of the conversation is to bring the loan out of delinquency. Set up specific guidelines for your collectors so that they know when and when not to escalate to a supervisor. Likewise, there should be guidelines around when to terminate a call should the conversation involve inappropriate language or threats.
- Be an expert negotiator. The best collection agents have a true knack for negotiation. They understand that they must listen to the borrower, and be respectful and empathetic of his or her situation. At the same time, the collector needs to keep the borrower focused on the goal of making a payment. This also requires the agent to be flexible. While a full payment would be ideal, the agent also understands that some form of payment—even just a partial—is better than no payment at all.
As the old saying goes, it’s a tough job, but someone has to do it. Collection organizations can achieve great results with the right staff that is well-trained, with a solid plan of action for tackling each collection call. Brad Young is chief operating officer of the Financial Institution Group of CUES Supplier member SWBC, San Antonio. Check out SWBC’s free ebook, Collections: To Outsource, or Not to Outsource, That is the Question, to learn about industry trends and actionable ways to improve the collections process. If you found this post interesting, you may wish to attend CUES School of Consumer Lending, July 18-19 and CUES Advanced School of Consumer Lending, July 20-21, both in Seattle.
