Maximizing the Productivity and Effectiveness of Collectors

Collections is a key area of any credit granting organization, 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 6 – Develop External Listening

It’s been said that listening is the least expensive concession you can make. Don’t interrupt. Concentrate. Empathize.

"Seek first to understand, then to be understood."

Ask questions that begin with "Why?" You will be amazed at how easy it can be to make a deal once you find out what the other side wants. The reverse also holds. Your opponents are more likely to work with you if the reasons for your demands are clearly articulated.

Stay focused. Chit chat is the last thing you need. Remain on your primary goals you have set and do not let the conversation go beyond that. Don’t be the one who talks more. The more you talk the more your opponent will know.

"The human body has two ears and one mouth. Use these tools in natural proportion."

This same rule applies when listening to our customers. Our brains think much faster than we can talk and while listening to other people talk, we get carried away with our own separate thoughts. This impacts what we hear from the customer, since all we’re doing is picking up bits and pieces of the conversation and interpreting it in the incorrect way. This inner dialogue allows us to lose control of the conversation, and because of that, lose the customer, which is a problem.

In order to give the customer your full attention and be able to assist the customer to the best of your ability, you have to “turn off” your inner voice when negotiating, and only listen externally. You cannot listen internally and externally at the same time, as this will scramble your thoughts and you lose focus on what your customer is saying.

Do not think about what you want to say while the customer is talking. Once he completes what he’s saying; you can then organize your own thoughts, structure them and then articulate them. In this way, you have more control of the conversation since you have listened to what the customer said, his tone of voice, his “body language” and any hidden nuances. This allows you to make the correct decision on the approach you need to take with this customer; must you be harsh, empathetic, firm, etc.?

External listening will also give you clues and information on the customer’s ability to keep the PTP. From this, you can gauge whether the client is just telling you what you want to hear or is he genuine in his desire to repay the debt.

If you have listened externally only, you will have all the information you need to make the right decision in providing the customer with a solution that benefits both you and the customer.

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.