To improve the technique of your collections department, you must first understand what needs to be changed.
There are different factors you must take into account to identify the processes where a strategy is required to achieve higher recovery rates.
Some of these factors are:
- Key performance indicators
- Customer management
- Dedicated teams
- In-house methodologies
- Existing infrastructure
Based on such analysis, you’ll be able to pinpoint areas for improvement. It’s important that each strategy is implemented along with tools that allow monitoring results constantly.
The following are some recommendations for following good debt collection practices.
Indicators and Objectives
Establishing objectives, though simple as it seems, is crucial to collections. The main target, of course, is collecting overdue payments.
However, goals can vary according to the delinquency timeline; for instance: sending reminders of billing dates, delivering notices of late payments, getting paid in the short run, restructuring debts, working towards payment agreements, securing promises to pay (PTP), and so forth.
Classifying collection campaigns by the age of receivables, type of debtor, or outstanding amount comes in handy to define your set of targets.
Providing agents with appropriate training courses increases recovery percentages significantly. The range of skills that collections professionals must develop are not only technical but also interpersonal.
Intimidation tactics are not an option when collecting payments. Agents need to find positive ways to empathize with customers and end calls with a promise to pay more quickly.
To that end, learning to listen is one of the best courses of action. Agents must be trained to do more than just stick to a call script or memorize a speech.
They have to understand that each customer is unique and tailor communication to their characteristics.
As mentioned before, being able to differentiate customers and their behavior based on the risk of default and their debt record is a key factor in successful collections.
Debt classification can also be subject to the cost of accounts management and the degree of collectability.
When maintaining well-structured databases, regardless of the segmentation criteria, you can map out strategies by type of debt or customer with greater ease. You can even set a dedicated collections team by group or category.
Multiple Communication Channels
Debt collection activities can be carried out over different channels. By offering multiple contact options, in addition to calls, you can improve customer interactions and take advantage of the immediacy offered by other means like social networks or SMS messages.
In preemptive collections, for example, customers can be reminded of billing dates with platforms that deliver notifications automatically via SMS or email.
Managing accounts 90 days or less past due to bring them current is a central task that can be streamlined with automated communication tools.
Implementing new technology in your collections strategy allows you to achieve better results while keeping customers informed of due dates, balances, and payment statuses quickly and effortlessly.
Download this article and find more tips for improving your debt collection process.