|PLACING AN ACCOUNT FOR COLLECTIONS WITH A COLLECTION AGENCY.||
Collections: 1st part Vs. III part
Most have placed at least one of our customers in 3rd party collections some time or the other. It should be written into our Credit Policy when we should take such an action. It is sometimes very necessary in order to send a message to delinquent customers. However, many of us use this action as a first resort rather than a last resort. I have heard many inexperience collectors say that they tell a delinquent customer who has frustrated them I will put you into collections or I will sue you. From experience, few will respond with a payment, many will probably say Go ahead. We should remember that we are still dealing with a human being and our approach on the phone could be taken as a threat. Its not what we say but how we say it.
Most companies who have placed a customer for 3rd party collections also stop dealing with that company as well. Something to ponder; do these clients go under without your product or service? The answer is no. It is very likely that they start purchasing from your competition and with their bad payment record is possibly they are paying on time because they may be on C.O.D. Many times the account was placed for collections because communications came to a deadlock. Many 3rd party collectors have had an account make payment on the first call even though the client was having a major difficulty with their customer. Your customer may also take it personally and never give you any business again. I know many of us will say thats fine ..Let them become someone elses headache. How happy would your sales people be with you if we use this approach?
1st Party Collecting is a balancing act that our collectors who are our front line must learn. Many in-house collectors have never been formally trained, when they start the training they receive may be very basic and they generally have to learn on the job. We are risking relationships with our customers that in some cases have taken years to develop. Our in-house collectors may be too aggressive or too passive, in both cases they should be trained to be more assertive. Our customers must realize that there are consequences for delinquency, but the messengers should be taught how to communicate this without damaging long established relationships. When we place a customer for 3rd Party collections, the collection agency is not sensitive to your customer or the relationship that you had established over the years. Their main concern is to collect the outstanding bill so that they can make their commissions. We must ensure that our in-house collectors not use some of the techniques that a 3rd Party collections agency use and be diplomatic enough to make our customers feel that we are providing customer service while still be focused on collecting the debt.
In concluding, 3rd. Party collections can be a drain on our resources,
paying commissions is an expense, and the customers placed for collects
may result in lost revenue. Our 1st party collector must be taught the
use of words and phrases to motivate our customers to pay. In order to
achieve this they must first realize that they are very different from
3rd party collections and develop a positive mental attitude to the job.
Attitude more than Aptitude leads to success.
[ Return to Top ]
Copyright © 1999-2013 CreditGuru.com a Div. of Credit Guru Inc. | All rights Reserved