The Seven Secrets of Top Producing Collectors

The Seven Secrets of Top Producing Collectors

While the “gift of gab” can help, the best collectors get to the top of their profession because they work on developing a set of skills that assures their success. None of us are born with a full set of “collection” skills, or any other specialty for that matter. Rather, we pick up different abilities on and off the job that we then employ when we need to bleed water from a stone–or just get a slow paying customer to ante up.

Since we develop collection skills through learning, it makes good sense to emulate the habits and practices of top-notch collectors. Consequently, we have identified seven secrets that define a successful collector.

The first four traits involve mastery over the situation at hand. Collectors that adopt these traits as their own can expect to achieve a modicum of success by being efficient. The final three traits involve mastery over oneself–attitude, outlook and relationships, as opposed to technical mastery.

Mastery of Your Domain
The trade collection environment is complex because of the multiple touch-points between the creditor/vendor and the debtor/buyer. As a result, collection issues can involve a lot of relevant details derived from the order-to-cash process. As a collector, you’ll need to learn how to navigate through all this without taking your eyes off the primary task: collecting as much money as possible. Top-notch collectors are masters of their domain because they are committed to the following four strategies.

1. Divide and Conquer
There is not enough time in the month to sequentially work your way through your receivables portfolio–analyzing, calling, and following-up with every customer. To effectively work a receivables portfolio, you need to break it down into groups of accounts requiring similar treatment. You then need to develop collection strategies appropriate to the dollars involved, risk characteristics, and general nature of each portfolio segment.

A collection strategy is nothing more than a sequence of collection activities designed to be effective in eliciting payment from past-due customers. Typically, larger accounts get more calls than faxes, particularly the top 20 percent or so of accounts that are responsible for 80 percent of your firm’s revenue. Sub-critical accounts can then be handled with mostly emails and faxes, followed-up up by a call if you can’t get a response otherwise.

Grouping your work by the type of collection activity also helps. You will make more calls if similar types of calls are made one right after another. Likewise, faxes and emails can be very often done en mass. By applying appropriate collection strategies to different portfolio segments in your A/R, you can optimize your collection coverage.

2. Win the Numbers Game
Collecting trade receivables is all about making as many effective customer contacts as possible. The best collectors are known for calling early and calling often. However, selecting the accounts they contact is not a random process. You should call your broken promises first, other customers requiring follow-up next, and then work through your remaining past-due accounts by dollars past due in descending order.

Following up on broken promises and other issues are critical, because if you don’t, you have wasted the time put into your previous efforts and will be forced to retrace your hard work. Working accounts by largest amount owed ensures that you collect as much as time permits.

Moreover, top collectors do not let themselves get diverted from achieving their collection goals. They do not give in to the tyranny of the urgent: unimportant issues that seemingly demand an urgent response. Many interruptions are unimportant despite their demand for the collector’s attention, and can be ignored, put off, or handled very quickly so as not to affect productivity.

3. Anticipate Success
In every interaction with past-due accounts, you need to anticipate success. Too many collectors shortchange themselves by not asking customers for everything. Rather than anticipating success, they do not pressure their customers as much as they can for fear the customer will resist. Many will resist, but the whole idea of collections is to overcome customer resistance to paying on time.

If you are calling an account that is more than 45 days past due, don’t just ask for the past-due balances in the 30 plus past-due bucket; ask for every past-due invoice, including the one that was just due yesterday. It may only be one day past due, but it is still past due. If there is a large invoice that is coming due in the next week, ask about that one too.

Successful collectors ask for it all because they understand the value of having the customer on the phone as opposed to having to try to get a hold of the customer again in another week or so. They also understand the value of the message it sends the customer when you persistently convey the impression that you expect to be paid everything on time.

Don’t just ask if the payment can be made, but when the payment will be made. Ask the customer to send the check today. Even troubled companies have some cash flow, and by being persistent, you will put yourself at the top of their payable list.

4. Never Surrender
Good collectors are effective counter punchers. When a customer hits them with a payment excuse, they are ready to come back with a response that moves the customer towards making a payment. Good collectors never surrender while the debtor is still standing. An excuse is any reason, valid or not, for delayed payment.

You have heard them all in one form or another, so have an answer ready for every objection. Put together a list of excuses and answers that are effective. Share them with other collectors and swap good responses.

You can then turn to this crib sheet when you need a comeback to a customer’s payment excuse. In time, you will learn to parry on your own without the written list. Meanwhile, your customers will learn that you are no pushover.

It is worth noting that collection software can greatly assist in each of these areas. The portfolio analysis tools,embedded collection strategies, prioritized work queues, consolidated customer information and account details, automated communication tools (fax, email, auto-dialers), and scripted collection dialogues contained in collection software all help collectors master their domains.

Self-Mastery
Self-mastery is much less influenced by technology. This involves the so-called soft skills, or people skills, that make up the other side of the collection equation. Assuming a pro-active approach to your collection portfolio will only get you so far. To become the best you can be, you must also address how you come across to your customers.

5. Exude Authority
Like a carnivore in the wild, debtors seem to be able to smell any sign of weakness. Once a customer senses you are weak, they will try the same tactic to put you off again and again.

As much as anything else, collectors need to be sure of themselves. An authoritative tone of voice (don’t be nasal, high pitched, or speak in a monotone; a deeper tone is what you want) is important, but here knowledge is key. The more you know about your customer the better.

Likewise, you need to know how your company works, especially anything related to the order fulfillment and billing processes. The customer needs to see that you know what you are about.

If you are fumbling, you will give the customer the upper hand. If you know the drill, you should be able to present yourself as both confident and competent, because you are in fact the authority on their account. You will then be able to be personable, without becoming a pushover.

6. Build Bridges
The better you are at building relationships with your customers, the better you will do as a collector. There are several factors at play here. The better you know somebody, the easier it is to elicit his or her cooperation. Friends help friends.

Also, as you build relationship with your customer contacts, you not only get to know them better, but you will learn more about their company and how it works. This information will allow you to forge solutions that otherwise might not have been apparent. And don’t just get to know the A/P clerk that handles your firm: get to know the accounting and purchasing individuals you also periodically contact.

A good way to start a relationship is to ask your contacts how their day is going. It probably won’t be hard to commiserate. Be ready to show genuine concern if they share a tough life situation that they are going through or heartfelt congratulations when they are experiencing good times. Also, send a thank-you note when they go the extra mile to resolve situations.

Like sales staff, send stuff with your company logo on it to show your appreciation. And always remember, your customers’ payable staffs are the key to your job performance. If they don’t pay, you don’t look good.

7. Always Be On
Successful collectors always bring their ‘A’ game to the table. Collectors cannot afford to have an off day. If you can’t be energized and upbeat, rather than making collection calls, work on correspondence or account reconciliations. When you are calling an account, you need to be in collection mode at all times. You need to stay energized in order to deter excuses.

Being upbeat will also encourage your customers to work with you. Most people do not anticipate a good experience when the bill collector calls, making it all the more important that you present a positive attitude to overcome their negativity.

Final Thoughts
You can be a good collector and not master both sides of the collection equations. A collector that is efficient, but not a particularly strong people person can do a good job. Conversely, somebody who is very persuasive, but not the best time manager, can still realize a modicum of success as a collector. To stand out as an exceptional collector, however, you need to be both efficient and persuasive.

Most of us are stronger in one area than the other. Hopefully, by understanding the seven secrets of top producing collectors and after a little self-evaluation, you will be able to effectively address those areas that need improvement. As you become a more rounded collector, balancing mastery of your domain with self-mastery, you will see your productivity increase.