Telephoning Your Debtors - Controlling A Discussion
The ability to 'control' (and drive) a conversation when phoning a customer requesting payment of an overdue account is crucial to obtaining a successful outcome for your business.
For many self-employed and small business owners who either have to make the calls themselves, or for other staff who are untrained in this area (or it represents a very small proportion of their weekly tasks), this can be an extremely daunting task. Here are our Top 10 tips on how you and/or your staff can maximise the effectiveness of collecting overdue accounts by telephone.
1. Have a clear plan - what do you want to achieve from the call? Remember that the main purpose of your call is to obtain payment or a commitment to pay, and, collect information to enable you to make an informed decision;
2. Arm yourself with information - know who you need to speak to, what amount is outstanding and how overdue the debt is. Have a look at their credit record with you prior to calling. Ensure that you have access to invoices and know what was sold or provided to your customer when calling. Have a look on system to see if their are any known or outstanding issues that your customer may have. Not having this information in front of you can cause hesitation and uncertainty and result in further unnecessary delays in obtaining payment;
3. Identify who you are, where you are from and clearly establish the reason why you are calling and what you are seeking from them - (i.e. to follow-up an overdue account and ask them if they can immediately pay in full);
4. Maintain good control - whilst it is naturally easy to get emotional about money you or your business are owed, it is important to maintain focus and control the tone of your voice and the language that you use. Some debtors will deliberately raise their voice or talk right over the top of you as a means of trying to establish and/or gain control of a conversation. By not raising your voice and buying into irrelevant issues, you will continue to 'control' the discussion. You will be amazed at the amount of times debtors will either immediately pay up. Good control is also about continually referring to the person you are speaking to by name, and speaking clearly at a pace that is easy for the listener to follow;
5. Ask 'open-ended' questions - generally avoid questions that prompt a simple "Yes" or "No" response. Remember that your questioning should be an information gathering exercise and reflect the reason for your call - to obtain payment or a commitment to pay;
6. Empathise, but don't sympathise - sympathy is effectively 'buying into' a persons emotional state, and is exactly what a lot of customers/debtors aim to seek from you as a divergence tactic to delay or avoid payment. By using empathy (as opposed to sympathy), what you do is 'acknowledge' the customers/debtors circumstance by stating that you can "understand" their situation, but then stay focused on what the original intention of your phone call was and offer a solution that creates a win/win situation for both parties. For example, you respond to someone advising you that their 86 year old parent died by acknowledging to them that it must be a "very difficult time for them", and then offering to give them time to deal with their grief by asking if there is someone else in the business that you could talk to and have them process the payment of your account (or alternatively, you could offer to provide them with a further fortnight to pay their account in full);
7. Listen and take notes - there is little to be gained by trying to dominate a conversation and talking over the top of your customer/debtor. Listening and taking notes will assist you to determine your customers true intentions, and to negotiate a successful outcome. It can also assist you to bring a discussion back on track;
8. Quickly isolate disputes - quickly identifying and acknowledging an issue or a dispute will assist you in maintaining control of the conversation before it spirals out of control. It does not necessarily prevent you from continuing to ask your customer for a commitment to pay their account. Whilst you should ask your customer to note the issue/dispute in writing within a specified timeframe (to enable you to properly investigate), you also need to provide them with your commitment to respond to their dispute within a certain (realistic) timeframe (i.e. do not over promise and then under deliver);
9. Confirm, confirm, confirm - never end a call without gaining and confirming a commitment from your customer, whether it be to an actual promise to pay or their promise to call you back. Always establish a timeframe and never leave a timeframe open to interpretation (eg. avoid using terms such as "If you can get back to me when you're ready"). Prior to closing the call, ensure that you 'reiterate' with your customer/debtor what the agreement is and ask them to acknowledge it. If they make no commitment, then still confirm with them what further action you will be taking (and when) if they do not pay in full. Make notes of the outcome of your discussion in a file or on your computer, and where practical, document any agreed payment arrangements in writing to your customer; and
10. How to handle verbal abuse and 'can't talk now' situations - it is vitally important that you do not respond to verbal abuse with abuse of your own, or even a raised voice, as that will signal to your customer that they have won the battle and the call will end either without you obtaining a commitment to pay, or, confirming with them what further action you will be taking (and when) if they do not pay. A '3 strikes and your out' policy nearly always works. Upon initial verbal abuse, calmly inform your customer that all you are wanting to do is discuss the matter professionally and then warn them that any further abuse may result in you terminating the call. If they abuse you a second time, reiterate your warning to them and advise them that any further abuse WILL result in you immediately terminating their call and escalating the matter further. On the third instance of abuse, simply terminate the call without speaking - you will be amazed at how this tactic can take the wind out of their sails, and how many customers will later call you back and apologise for their behaviour. People who immediately inform you (after you have identified yourself) that they are unable to talk to you, and ask you to call back later or that they will call you, are simply trying to brush you off and avoid payment. If this occurs try quickly saying "I will only take a minute of your time" or something like "Well, why did you answer your phone then?" or "Would you have been happy to talk to me if it was a friend or a family member who was calling?" This can sometimes shock them into entering into discussion. Never agree to call them back if they ask you to. Request that they call you back when it is convenient for them, but also ensure that you stipulate to them a timeframe for doing so (eg. by the end of this week).