Effective collection techniques: collect money while maintaining goodwill with the client
Website design By BotEap.comWhen collecting money from delinquent accounts, it is a key principle to preserve customer goodwill. We want to raise money by practicing the three P’s: being professional, personable and persistent. But, at the same time, we also want to maintain a good relationship with our client. We also want to maintain a good reputation.
Website design By BotEap.comJust because some of your customers (customers, patients, members, etc.) have a problem today, doesn’t necessarily mean they won’t be good customers in the future. And I think most marketers will tell you that it costs a lot more money to find new customers than it does to hold onto existing ones.
Website design By BotEap.comMichael Coleman, the author of “The Collection Management Handbook,” says that statistically:
80% of your customers will pay you on time.
18% intend to pay you, but for some reason don’t feel like they can right now.
The 2% are “credit criminals” who never intend to pay you.
Website design By BotEap.comIf we were all like the 80% who pay on time, we would never have collection problems. All you have to do with those customers is keep them happy.
Website design By BotEap.comAnd don’t worry about the 2% that never plans to pay you. Turn them over for collections. Take them to court. But don’t waste your precious time with them. They are actually trying to scam you.
Website design By BotEap.comWhere we as accounts receivable professionals and people who collect money can really do some good is with the 18% in the middle that intend to pay us but just don’t think they can right now. But they have a problem, and we have to help them solve it.
Website design By BotEap.comSo if you want to collect a lot more money faster while maintaining goodwill with your customers, you need to stop thinking of yourself as a collector and start thinking of yourself as a problem solver.
Website design By BotEap.comAlways use language with your client similar to this: “I know that together we can solve this problem.” With those simple words the debtor stops thinking of you as a collector. In the eyes of the debtor, you are now a problem solver. And you are working with your debtor on the same side of the table to try to resolve the problem.
Website design By BotEap.comThat’s what successful accounts receivable professionals do. They work to get their debtors on their side in an effort to resolve the problem. And an additional benefit may be that, instead of having a delinquent debtor, you have a customer for life.