1. Introduction
The five keys to success in effective collection management should be a must-read topic for anyone who wants to effectively improve or guide collection management. The opening of markets, aggressive competition, the Internet and the entire technological boom we are experiencing have led entrepreneurs to live a new business environment based on risk decisions that require a trained collection professional and different from the search engine or traditional check caller.
Although the author does not doubt that many times these simple and monotonous efforts are successful, he makes it clear that the topic that we will deal with in this seminar is not aimed at those types of managers and that I will focus on the conviction that experience has given me and that is the following: collection will always be an activity of communication and persuasion between people and the successes or failures of management, they will only depend on the way in which these classic concepts that we present below, are applied or ignored by professional collectors in a collection management. Hence, the difference between successful managers and managers without results.
Many years of my life have been devoted to the investigation and observation of different methodologies, practices and tactics used by people that I have considered effective in the collection activity; But in this seminar, I have only dared to present those ideas that I have personally been able to put into practice repetitively and effectively in each collection management that I have carried out in my life. So I can assure the reader, the effectiveness of each of these five keys that I put free of charge today. The true value of these secrets is that you are not paying for their knowledge, so for the recipient of these treasures, their value will be in seeing how they work and being able to apply them in their management. I assure you that just by putting one of them to work,You will have already paid for the time you spent reading, analyzing and adapting them to your management.
An old friend told me that in just 20 minutes that it took him to read the content of this seminar, he was able to find lights to resume the collection of various accounts that until just days ago, had no hope of charging. That I really loved to meet you, if you, after reading each of these chapters, can give me your positive or negative experience in a short email, I will be enormously grateful. Really, this is a real offer! If you have found this treasure, share it with other friends or someone who knows that each of these keys can be of use to you and give them the opportunity to collect an account that was not possible to become effective.
Well, the time has come to know the five keys to success for effective collection, I only ask that each chapter, you read it first with the desire to know its content. Please, do not go to the next chapter until you find the way in which what you have learned in the chapter you are working on, you can apply it to a specific management you are doing or that you will soon start. Each chapter is a key and it is explained in a summarized and concrete way to make more efficient the time that you are investing in its reading and knowledge.
- The key Number one: for me one of the most important has been called Attitude towards the Management it performs and the Company it represents. In it you will find why it is important to approach collection management with a positive attitude not only towards work but also towards the organization and / or activity that you represent. Key Number two: This key is titled Internal Organization towards Work and Business Flow of Business in this chapter we will try to explain the importance of preparing for a management, as the knowledge of your company, of the industry in which it is developed and Your ability to work in an organized manner enhances the possibility of making a delinquent account effective. Key number three: The third key has to do with Customer Perception, here I explain how perception is an issue that influences the delinquency of an account and that this tool can not only be used to improve your management, but your customer as well insurance already used it with your organization before deciding to default. Key Number Four: This key opens the doors of Communication and the Channels on which this chapter executes shows the power of communication and how to use it as a persuasion tool in your collection management. Key number five: The monitoring and permanent evaluation of the actions and reactions on the accounts that you manage. With this key you become aware of the importance of measuring yourself and evaluating yourself on each one of the actions that you undertake so as not to forget that the secret of effectiveness lies in the permanent analysis of the actions vs. the reactions that they produce.
It would not be very serious if I assert that with the management of only these points, we will be exempt from not being assertive in a collection management, but if I can tell you, that while they are carefully applied to your management, you will have more than 80% of odds of being effective. The other 20% will be in your creativity and perseverance, both skills that only you can control.
I would not like to end this introduction, without first saying that in collection, there is only one declared enemy and his name is: TIME. He will be accompanying you in every action you take and it will only be your decision if you empower him to make him an ally of his management or let him take advantage of it, finally producing unsuccessful and frustrating results of the management he undertakes. All accounts are collectible, the secret of a good manager, lies in being able to determine how much resources to invest to make an action effective and accept, without passions or regrets, the time to transfer your efforts to other instances to make them more productive, effective and efficient, professional management of your time and the resources used to achieve your goals.
2. The attitude towards the Management it performs and the Company it represents
A few years ago in an open seminar, I commented to the participants that every time I deal with this subject in public, the photograph of a relative comes to my mind, which I love very much but that I cannot stop using as an example when I speak of Attitude. He is that type of person that you call and from the moment he answers you, his tone of voice projects tiredness, boredom, frustration, tragedy, anyway….
Have you had to talk to someone like that?
They are of these people that when it asks to him How it feels? the answers are something like "There so as not to make you feel bad" or simply to talk to them in a "light" way as today's youth prefer, a quick conversation with few words "There then not as well as you".
I confess to you that every time I talk to people like that, they absorb my energy, that internal energy that I need to confront a successful day in my work and in my management.
How many family, friends, friends, bosses, clients, etc., do you treat each day in your environment with a similar behavior or attitude?
Without fear of being wrong, I would tell you that 80% of the situations you handle on a daily basis involve issues of low self-esteem, negative communication and with the famous HUNTING DREAMS that abound everywhere. Look around you and listen carefully and you will find that only 20% of communications in your everyday environment are handled with a high level of self-esteem, attitude and positive language. Pareto told us that the success of a management is to be able to identify that 20% in order to achieve 80% of the results and objectives that I have set myself to achieve.
Let's not go that far. I want to give you the example of a newly married couple, the first days they share a room, everyone dons the best pajamas, they get ready in the most attractive way possible, anyway… if they could be tied up to spend all night with their cute little faces looking at each other they would.
What happens after 15 years of Marriage with that same couple and in that same scenario? I'm almost certain that the woman no longer cares about putting on her mask before bed, about clothed in Egyptian mummy-type pajamas to kill any provocation, planting the scrolls on her head to prepare for any ambush later in the night, If you do not believe me, possibly ask your best acquaintance and he will smile at the certainty of these words, if you do not play them too.
Let's continue with our scenario of attitudes and then return to the husband who, for his part, has found a better ally, control of television, prefers to practice the position of backing, tune in to the best sports or news channel to escape indifferently from the situations that arise with his loving wife. What is the point? it seems that they have forgotten their usual lexicon, the words of affection and sweetness from their time as boyfriends. What made you fall in love? What did you like to do? Etc. Who would say that this negligence is not the product of an attitude in a cadaverous state.
As long as you are not emotionally committed to something you want to achieve, your results will most likely resemble the situation described above. The same happens in the collection, when you decide to assume the collection of an account, you must emotionally commit to it, you must want to visualize the results you will obtain before starting a single action. If you can't do this, you are like the boxer who steps into the ring and you don't feel sure that you will win the fight for which you have prepared with great dedication.
Under these conditions, its results are already determined. You will FAIL as a manager. The reason is very simple, you will project a defeatist position with your attitude before starting the fight. Your verbal and non-verbal communication will transmit to your client or receiver insecurity negative factor to initiate a collection action.
With such an attitude, your client will assume that their behavior is a reflection of the behavior of their organization and / or individual they represent. Therefore, this cadaverous attitude shows that it is not very important to make effective the account that you are managing and that it can wait a little longer to be canceled.
I want to tell you that I have seen cases in which this becomes a strategy against the manager and in favor of the defaulter who expects you to stop being tired and forget to collect the past due account. In short, YOU will not be able to collect if you do not Visualize and maintain a positive attitude towards the results you expect to have. Do not allow DREAM HUNTERS to get you involved in the 80% negative environment described at the beginning of the chapter. You belong to the 20% team and they only speak one language and maintain a single attitude towards their work, THE POSITIVE ATTITUDE.
I have spent more than 15 years training sales and collections personnel in various types of organizations; I also coach many workers at different levels in organizations and as soon as I can connect with them and establish a level of communication that gives us confidence, I am struck by hearing them refer to their work and their companies in a non-positive way. I wonder, do you think that a person who cannot express positive thinking for what he does and for whom he does it, can succeed in what he does? Really no!
The first exercise that we have to do and that I would like to invite you to do is to change your communication habits. Let me even though I have a course entitled The Power of the Word in Collection Management and that I will not go into in depth this time, I just want to extract some of its content which is presented in the book by Robert Dilts «The power of the Word using NLP as a tool »and which I have personally put into practice during my tenure as a consultant and as a collector.
Robert Dilts says that “as humans, we use language in two ways. Firstly, to represent our experience in an activity that we call reasoning, thinking, fantasizing or rehearsing. When we use language as a representation system, we are creating a model of our experiences »If today you are not satisfied with the results you are obtaining in your professional life or in your management as a collector, I would invite you to review the form of representation that you are using in your experience model. If she is producing negative results it is because the model must be corrected and for this the first step is to become aware of it. When you can become aware of it,It will facilitate the process of transforming negative schemes into positive ones and rethinking a new life model according to how you want to live it to the fullest satisfaction.
"Second, we use language to communicate our model or representation of the world to each other. We call this activity consisting of the use of language as a means of communication speaking, arguing, writing, conferring or singing »here once again the importance of your language is evident when you pay. Has your conversation ever been recorded and then discussed at your collection clinics? If you have not, I invite you to do so. I am sure that you will discover in a conscious way what your voice transmits, your communication and your attitude in a natural collection management. You can change each of those behaviors or equivocal models of representation of that world that you do not want, but it is only you who can change,nobody can do it for you and it is here that you find the essence of happiness, when you can calibrate to use the terms of NLP, your life model with the results and with the way you have always wanted to see the world. SUCCESSFULLY!
If you are really interested in changing the results you are having or simply want to improve them, I invite you to try to frame your language for the next 30 days with these suggestions:
Let's pay attention to the connecting words. These are the ones that connect one idea with another in one sentence. For example: "but", "and", "or", "although". very often I hear experienced agents in collections talk to their clients and say: Today, Mr. Rodríguez, you must make the payment to us, but if you don't, tomorrow you will pay interest. The but moves us to focus on the payment of interest and not on the importance of today's payment of the account. If instead of using the but, use the and we could produce the following conversation: Today Mr. Rodríguez must make the payment to us and if he does not, tomorrow he will pay interest. If you pay attention to this phrase,They will realize that we have calibrated the communication and we have put the emphasis on the first part of our demonstration. I leave these suggestions for you to review your written and verbal communication and you will see how productive it is.
To conclude, I just want to tell you that your attitude and your language make the difference between successful people in collection management and those who are not yet, reflect on this and write to tell me about your experience at: [email protected]
3. The Internal Organization towards Work and the Business Flow of Business
I do not know an effective person who has not discovered the power of Order. People who do not have that ability, usually surround themselves with someone who is orderly and methodical. In a collection management, contact, communication and the business environment produce information that must be well managed and quickly channeled to produce effectiveness in each management that is undertaken. Never try to charge if you are not organized to do so first.
Let me be more clear and concrete what it means for my organized. In practical terms of collection: You must know your company, its products, its industry, the operating flow of business and the technology they use to manage the information. I could call each of them as the basic structure to start a management. Once that base of the pyramid is established, then we must move to the second seat, where we prepare ourselves in the technical aspects of management as collectors.
It is here where we inform ourselves about: What produces the blackberry? What documents support it? What actions have been taken? What reactions have occurred? Which departments have intervened or should intervene? (the technique of the 5 What and the 5 why?). It will be after responding to this technique that you can make a real diagnosis of the situation and assess whether the actions taken have been correct and meet the requirements of the case. Many times after applying this technique we realize that the problems have an internal origin that must be solved to subsequently move to the other seat of the pyramid effectively. I recommend that you take note of each of your impressions in each of the steps and questions that are done by applying the technique.
You know that the greatest number of situations that I have encountered when starting a job in an organization, is that nobody has asked what and why things are done the way they are done. It is incredible to see what you discover with this technique, in addition to awakening one's reason for being as a thinking being within the organizational gear. I have generally called this phenomenon the inheritance of inherited negative behaviors. No one knows why, but this has always been the case. Does this happen by chance in your company? I leave it up to here.
Well, once this phase is over, we move on to the final stage of the pyramid and it is the one of contact and management action. You must promise me starting today that you will not take a single action in your collections management, without first reviewing each of the seats described in this chapter. Start only when you have collected, analyzed and understood the entire process that the account has followed.
There are several collection policy manuals in entities that establish the procedure to initiate an action, many of them begin by establishing that a first letter should be sent, after 15 days, a second one in another tone, anyway… I am going to tell you that doesn't work. Remember that in previous chapters we have told you that TIME is your worst enemy, waiting 15 days to evaluate the action between one letter and another, only saves time in favor of your debtor and not yours. Technology allows us to be more dynamic, use e.mail, accustom your client to the fact that you have access to technology and that you can interact with them in that environment in a comfortable way, expand the possibilities of ways and places where you can do the Payments,For example, use the technological tools to pay directly by credit card on your website, by debit to current accounts, in short, update your service schemes to be in line with the times of change we are experiencing.
Take advantage of answering machines for cell phones and residential and commercial telephones, never leave a threatening message, always invite the delinquent account does not produce positive results for anyone, let them know that you can help them and contact you personally. Another secret is that people like to talk to people who can provide solutions, that means that if you have decided to collect that account, you must become an effective mediator between your company and the client, remember the two basic objectives of the collection manager successful.
Please, never forget to visit your client at least once every two months personally, you will be amazed at what you can benefit from a simple visit. You must not forget that each contact opportunity should be for you a source of resources that enrich your Database of knowledge and information of your client. For example, I have been a believer in Proactive Collection, this means permanent monitoring of your portfolio. This monitoring must necessarily produce visits to your customers to see the flow of what is happening in your business operation. When I visit my clients for example, I take advantage to see the movement that takes place in the reception and payment window, with the different providers that gather in search of their check. At that time, the best medicine is to know how to listen,They will tell you how they live their experiences and you will know how to intelligently manage each one of those information that you normally would not have been able to receive by phone.
On several occasions I usually use the results of these visits, to set off alarms and to detect current or future insolvency situations that may complicate my business relationship with my client. I can narrate many cases of clients who handle this information properly and on time and who manage to support their client in a timely manner to avoid the deterioration of a successful business relationship. Once again the importance of being clear about the two primary objectives of management: Maintaining the relationship and collecting the account.
Let's not forget that in the previous chapters we said that collection is an activity BETWEEN PEOPLE you can never lose physical contact with your client, if you want to be effective in its management. I know of cases in which the laziness or the routine of an activity worked without an attitude of positive results, leads to leave that monitoring only at the telephone level and then wait for the great surprises that undoubtedly produce a very deep gap in the finances of any organization.
Just for reflection: Who does a business not to receive their money back and a profit? I have had to see how in prestigious financial and commercial institutions, without any preparation, they sit a person in front of the phone and a computer to collect bills without even knowing the company they work for. That is what I call making the SICARIATO of an account, it is nothing more than shooting in open blast at the commercial relationship of a client that in principle may seem delinquent but the causes are essentially attributable to the internal problems of a disorganized organization and not prepared to compete in a globalized and changing market.
In short, don't improvise. The organization and the knowledge that you have of your company, environment and client will be your best ally to achieve effectiveness in effective collection management.
4. Customer's Perception
The first time I touched on this topic in a seminar, participants did not find the relationship of perception with collection. I can suppose that you are wondering about the same thing. Peter Brachfield said in one of his books that debtors choose their financial victims. The truth is that this is so! the choice is made by perception. If a client can perceive that their organization does not monitor accounts, that their deliveries are possibly not made on time, that there is no defined credit policy respected by their workers and that you are not prepared to respond to their problems due to lack With an appropriate information system, you are close to being the victim of an unscrupulous debtor who wants to end your business. In order to reach these levels of perception,There is no need to violate any internal security system in your organization, you just have to develop your senses and pay attention to the way you do your work. For this reason, it is important that the knowledge that you acquire as you go through each chapter, integrate them in a harmonious way and do not see them as topics of independent interest.
In the previous chapters I commented on the importance of personal contact in effective collection management to feed your information system through perception. Let me tell you that this technique is one of the most commonly used by debtors every time they look for their financial victims. If you want to know how effective this technique is, I invite you to observe the amount of information that you can perceive just by visiting the reception area and the payment windows on the next visit you make to your clients.
One thing that I learned quickly when I started my first collections experiences was to take advantage of the information that a receptionist manages. If you still do not recognize the power of the information they handle, just analyze this situation: Generally, their position as a means of initial contact with the company and with those who work in it allows them to learn about the situation of each of the workers. and the real financial situation the company is going through. If you have any doubts about this statement, just ask your receptionist which of the company's workers who are facing financial problems and you will be surprised by the detail of the information. If you're a savvy collection manager, you'll need to put your customer's receptionist to work for you. Do not forget the details of the chocolate,the rose, in short… The fruits will be tripled when you need to use that information for the development of business with your client.
Today there are statistical models to measure credit risks. One of the best known is scoring, which relates experience with profiles of credit subjects with whom the possibility of success in a commercial credit relationship can be estimated. However my best credit evaluation tool is permanent contact with your credit subject. I can be a credit subject today and qualify within the credit risk model that is being used and in a couple of hours, stop being, for situations not foreseen by any model, a good credit subject. Learn to develop positive perception, this will take you to a type of magical intuition that with a simple investigative methodology will allow you to develop the sense of smell of good subjects and credit operations.We live in a world of perceptions and we must learn to see beyond our model of experience. If you don't believe me, just tell me what is the comment at your house, when your neighbor arrives one day with a late-model BMW car? If you want to be successful collecting your accounts, use perception as a mechanism to alert your investigative skills and validate them with documentation and facts that allow you to guarantee sustained growth for your company and / or organization.use perception as a mechanism to alert your investigative skills and validate them with documentation and facts that allow you to ensure sustained growth for your company and / or organization.use perception as a mechanism to alert your investigative skills and validate them with documentation and facts that allow you to ensure sustained growth for your company and / or organization.
5. The Communication and Channels on Which It Is Executed
In the first chapter we talked about the power of language and the importance of the collection manager's attitude towards the process itself and the company. In this chapter we will focus on communication to your customer and the channels he uses to measure his effectiveness. You would be surprised, if I told you that a large part of the collection efforts that do not produce results, it is because they have not been able to communicate and use an appropriate channel of bonding with the client. There are different ways to collect an account and all of them are associated with a specific communication, my experience is that unless you were wrong from the beginning when analyzing a credit risk, most people do not feel comfortable on the bench of the debtors, the reason why you may be occupying this position,They are so varied and extensive that it would take us a long time to analyze them, but what I have been able to learn in all these years that I have been dedicated to collection is that people know how to thank you when you can get them out and help them overcome difficult situations.
The cash collection manager is not the bravest, is not the most cunning, much less the smartest. It is the one that can become a support for the client with two clear objectives: The first one, to save the commercial relationship without falling to the detriment of the interests of the company. The second of them is to recover all the amounts involved in management. For this it is important to have control of your communication. There are managers who, at their first contact, exhaust the exit routes by the client, until taking it to extreme points where the client only responds: "Do what you want." I am sure that what you do after this, will be much more expensive for all than it could have been, to handle positive communication for the benefit of the two objectives stated above.
Not all channels work the same way for your clients. You must, within your account monitoring, measure the reactions that occur for each action you take. There are clients that the letter may be sufficient, there are others that the letter does not work and if the email, anyway… Once you identify the reaction that a certain action produces regarding the payment and the type of channel used, please document it and use it wisely and wisely. Remember the topic of perception and actions that become customary over time, there comes a time when the client realizes that they are part of a routine and not personalized procedure and at that moment, the action loses all its effectiveness. It is for this reason,that the channel must be varied and must be monitored with great sensitivity to finally achieve our two basic objectives set forth above.
To summarize this chapter, I would like to remind you of the important topics covered in it:
- Do not forget the power of positive communication and the effect that it must produce on our two objectives. Effectiveness is only produced by your professionalism in management, but failure is also achieved by the mistakes that are made in each of your actions. Measure channels and document their effectiveness. Do not get used to the mechanization of a channel, in the end it loses its effectiveness. The secret is the permanent Monitoring of your actions and the analysis of the reactions that they produce.
6. Individualized and group monitoring and evaluation
If you are not able to follow up on each of your actions, the safest thing is that the results of your efforts cannot be classified as effective either. There is no room for improvisation in effective management. Tracking is the key. When you can follow the results of your actions, you can correct the normal deviations that every process in its management phase produces.
We have said in the previous chapter that when a client becomes accustomed to a style of action, over time it may happen that they lose their effectiveness, for this reason it is precisely that today no one can present us with a single model to collect accounts, because if There is something that is true, it is that each management you undertake is different and that the accumulation of all the experiences carried out are the ones that guide you over time to apply different ways of proceeding and act against the account you are trying to collect.
Very few companies have institutionalized an internal measurement system, once I was interested in creating an environment of healthy competition in a collection team that I managed, the idea focused on a table where the name of the manager would be determined, the number of accounts assigned, the total value of said accounts and two more columns that measure the effectiveness in quantity and amount.
The result was incredible. There were interesting results, the first was to realize a balance in the allocation of accounts and not to burden one worker more than another, the second was to generate a spirit of competitiveness among team members that would be rewarded and publicly recognized among the workers of the organization. Third, the prioritization theories (PARETO 80-20) could be put into practice. 20% of your efforts produce 80% of the results and the great challenge was to identify that 20% that together would allow the organization, reduce the portfolio to levels almost below 4% after being almost delinquent above 15 and 16% of credit sales.
The specific recommendation at this point is that we learn to measure our effectiveness, there is no coach in the world who can establish a sound strategy if he does not know what the individual performance of each member of his team is. There are no miraculous formulas to effectively manage accounts receivable, but there is something that cannot be denied and that is that it requires a lot of creativity to collect and a lot of knowledge and sensitivity from your client. We have studied five keys to make a collection management effective, but I forgot to tell you that if they are not taken into action it is as if we have not done anything, now it is your turn to apply them. I have learned that you also enhance your management, when you find a mentor and I offer to do it,If you are interested in sharing with me what are the results that have been generated by applying each of these keys.
My main interest is to foster a community of experts on collection issues, experience is the wise solution to the problems of indifference and arrogance. When you think you know everything, you have died in your own trap, there is always something and someone that surprises you. This model is flexible, practical and simple, now it is only you who produces the magic, the treasures are hidden, but nobody finds them if they do not search for them by yourself. ! Now it is you who makes the difference !.
7. Conclusions
In an effective collection, time is not your best friend, you have to react smart and planned to obtain successful results in it. Nothing can be successful in your life, without before there is no attitude, visualization and an appropriate language to accompany your management. Never start charging an account if you are organized and prepared for it before. The internal knowledge of your company are the first steps where you start a successful management.
Know your internal processes, your policies, the development of the sector in which your business and / or company is developed, your technology in short… Get ready first and then take action: Don't forget «A lot of trouble in the finals brings exhaustion. «. Document the knowledge you learn from each management and the experiences that each one lives. Write them in your client's file or, failing that, type them in your information technology system, you will see how useful this practice is. Get into the habit of research, read and ask your more experienced peers what you can't handle professionally. We have discussed the importance of perception to set alarms, but remember that this is a tool that is at your disposal but that your customers also use it.Don't forget that Clients choose their financial victims.
The language of effective communication moves mountains, remember that you are a recovery advisor and your goal is for two well-defined destinations. The first of them, the maintenance of a long-term and continuous commercial relationship and second, the collection of the amounts in full. Keep in mind that all accounts are collectible but that those results or those failures depend only on you and not on the methodology you use. There are no secrets or unique magic formulas to collect accounts, which if required is a lot of creativity and perseverance for management.
Finally, great athletes can only improve their performance if they know their results first, for this reason, you as a good manager must constantly measure yourself and set goals that make you better every day. I invite you to apply this simple relationship: Effectiveness = Action Vs Reaction, if your actions do not produce reactions that lead to your goals, do not stop trying the same technique, collect an account that is already delinquent. In short, if your first letter does not produce results, do not wait for another fifteen days to have if you send the second. The secret is to ACT. In summary, permanently evaluate the actions, the results and your attitude towards management and you will find that today you are in the most dynamic and interesting profession in the world: COLLECTING ACCOUNTS.
A friend used to tell me that many times free things are not appreciated, so they must have symbolic value. These five keys have a value and the best thing is that it is not symbolic, it is real, as long as you master and apply one of them, it will pay the time invested in reading this course and it will be compensated in money, for you in your collection commissions and in your company in the professional recovery of your money. But keep in mind what we have explained here, the treasure has to be found by you, nobody will search for you.
With these practical tips I say goodbye, thanking you for participating in this seminar, wishing you success in your efforts.
Below is a video-seminar in which Héctor Sbert and Roberto Bosco, experts in recovery of bad debts, expose the most common errors that organizations fall into when it comes to collections, they also present the most effective tools for collection management in the companies.
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