Maximizing the Productivity and Effectiveness of Collectors

Collections is a key area of any credit granting organisation, and it is common for organizations to invest in processes, technology and strategy in an attempt to increase the efficiency and effectiveness of this area. Unfortunately, it is also common for organizations to overlook the most important factor in collections – the collectors who make contact with customers every day.

This month’s tip continues our discussion on negotiation and the different ways of improving a collector’s negotiation techniques.

Negotiation Tip 4 – Build Trust

An interesting fact about collections is that customers who develop a feeling of trust towards the organisation and the collector, who has dealt with them, have a higher propensity to honour promises to pay and to pay their instalments in future.

In a collections call, trust must be one of the objectives, without it; there won’t be an honest and open communication but just a feeling of manipulation, suspicion and potentially intimidation.

If trust is not built up, it can result in the following:

Broken promises – if the customer feels they cannot trust you, then they are somehow relieved of their side of the bargain.
Poor collections results – this can be due to the promises not being kept rate as well as customers not communicating honestly with collectors, thereby making it more difficult to set promises up.
Customer attrition – banks particularly have to maintain a strong image of trust in the minds of their customers. If this is broken, customers have a high likelihood of moving to another bank that they perceive as more trustworthy.
Damage to the company image – untrustworthy behaviour by collectors can cause severe damage to the brand and image of the company, not only in the mind of the customer, but also to their circle of friends and relatives, and in extreme situations, to the newspapers.

Trust is built in a number of ways:

Collectors showing an expected picture of the organisation (polite, professional)
Collectors keeping promises made to a customer such as faxing them a statement or calling them back at an agreed time
Collectors honestly and openly expressing their need to help the customer regularise their accounts
Collectors respecting confidences

The importance of building trust in negotiation is something that should be part of every collector’s development and is one of those key aspects that differentiate a good collector from a bad collector.

Paul Shortridge is a Senior Consultant at PIC Solutions, the largest customer management solutions company based in the Southern Hemisphere. He has over 5 years experience in the financial services industry. Previously with Nedcor as manager – innovation in retail credit, he headed up a team that successfully rolled out projects to reduce risk, increase revenue and reduce costs across all credit and transactional products. In this role, he implemented initiatives that increased revenue by R100 million and introduced their 8-second home loan pre-approval process. As lead consultant at London Bridge Group, Paul was responsible for the business lead in large scale project implementations as well as assisting the sales team with expanding their market in South Africa. He holds a BSc and MSc in Chemical Engineering from the University of Cape Town.