The Art of Quality Debt Collections: Exploring the Human Side of Collection

By Darryl D'Souza

In many respects, collecting debt is a negative job—a fact that all credit risk professionals must be sensitive to. The typical collector may attempt 120 calls a day and speak to 36 customers, and then gain a kept promise from just half of those 36 customers he speaks to. This means the collector has just 18 kept promises and 102 negative results. An 85 per cent negative response rate translates to seven hours of negative feedback in an eight-hour day.
This book offers the epiphany that great customer service in debt collections yields far greater kept promises than the above number. Consistent reiteration and coaching of the collections team about the importance of quality has always delivered a 25 to 35 per cent higher performance than the average. There are tips in this book that help you improve collection performance by embracing quality service. This is tried and tested in my career, and this is what this book reiterates.

• Language: English
• Publisher: AuthorHouse
• Release date: Aug 20, 2019
• ISBN: 9781728323916

Book preview

CHAPTER 1

Ten Attributes of Great Customer Service

The term customer service only rings a bell for people when it’s referring to the retail industry. Everyone understands that for store or shop owners to keep people coming to their businesses, they must demonstrate a great deal of genuine and practical customer service. This may range from smiling when offering to help shoppers pack their things to showing deep and heartfelt respect whenever customers are around. Can you imagine entering a restaurant or bar where the attendants are rude and unsympathetic? Would you ever go there again? Would you recommend that restaurant to your friends and colleagues?

Today, banks are losing customers in droves, in thousands, every year. According to a report in Forbes, a Bain & Company-supported survey of 137,034 customers in twenty-one countries revealed a gloomy picture for financial institutions: about 29 per cent of customers globally said they would switch banks the following year if they could easily do so. That is nearly a third of banks’ current customers. This is not a healthy trend for financial institutions. One of the ways for a bank to maintain the same number of customers, according to the report, is to improve its salesmanship.

Salesmanship could mean selling a bank’s best products and solutions to current and prospective customers. But how can a bank’s collections officers approach existing customers who have defaulted on loan repayments without offending them? How can collections officers broach this delicate subject without driving customers to defect or approach another bank for services? This question is the inspiration for my concept of introducing practical customer service techniques into collections procedures.

Both financial institutions and their clients stand to gain a lot when the collections process leaves neither party bitter, angry, or vengeful. This kind of great salesmanship—or dedicated customer service, as we will describe it—won’t happen overnight. Financial institutions need to consistently train collections officers in this new and practical approach to recovering debts. Below are ten attributes of effective and great customer service.

1. Having the Patience to Listen and Think

Great customer-service professionals are patient, listen to clients or customers, and spend an appreciable amount of time thinking and reflecting on what they have heard. Most of the time, collections officers think they are entitled to a superior position in a discussion with a client who has defaulted on repayment. Collections officers with unimpressive track records do not see their clients as a people like them, worthy of respect, consideration, and kindness. The main issue here is that no one communicates when everyone is talking at the same time. Not only do good listeners grasp the issue on the ground from an omnipresent angle; they also have the unique opportunity to contribute meaningfully to the matter, having fully understood the conditions that led their clients to act the way they did.

Unfortunately, we live in a loud and misguided society that rewards bullies and considers a quiet and reserved personality a sign of weakness. Yet the type of collections officer who brays at top of his lungs or bangs on tables to express anger and frustration with a slow-paying client will achieve nothing significant. This is the wrong way to do customer service. Behaving in such a deplorable way is comparable to an impetuous teacher who tries to instill knowledge into erring students by shouting hoarsely at them. Instead of communicating anything, that teacher is instead instilling fear into the students’ minds and making them uncomfortable with learning both inside and outside the classroom.

2. Inspiring Courage

When clients who have defaulted on a repayment approach you, you can be sure that they are ashamed and scared. These clients may find it very difficult to communicate in a meaningful way. As a collections officer who fully understands the power of great customer service, you have a duty to cheer these people up and make them speak up. You will never achieve any tangible outcome meeting with a client who is not in good mood because of a failure to settle financial obligations as promised. And if you come to the meeting breathing fire and brimstone, you will surely end up pushing such clients back into their inactive shells.

When nothing reasonable and coherent is discussed during a meeting, the possibility of getting a client to provide a workable repayment plan is remote. Have you ever seen how salesclerks at shopping malls help very old and young shoppers accomplish their purpose? That is exactly the way we should approach talking with or holding a meeting with clients whose self-confidence has already been damaged by their failure to fulfil the promise of a timely debt repayment or settlement. The next time you are standing or sitting in front of such a discouraged person, try to stay calm, collected, and welcoming. To make a success of your collections efforts, create an atmosphere of true friendship and not one accusing or bullying.

3. Knowing the Customer Is King

Is the customer always king? The answer to that question is very simple: yes, the customer is always king. It doesn’t matter how long your client has fallen behind in repayment or how much an individual currently owes your institution. You should accord each client the respect due to a customer you and your bank are not interested in

Reviews for The Art of Quality Debt Collections

[Geber Gomez · Rating: 3 out of 5 stars]

Very useful when u don't know where to start, but I needed a procedures focused book. So that is the reason I dont rate it higher