Effective collection techniques – Collecting money while maintaining goodwill with the customer

When collecting money from criminal accounts, maintaining goodwill with the customer is a key principle. We want to raise money by practicing the three P’s – by being professional, comfortable and persistent. But at the same time, we also want to maintain a good relationship with our customer. We also want to maintain a good reputation.

Just because some of your customers (clients, patients, members, etc.) have a problem today does not necessarily mean that they will not be good customers in the future. And I think most marketers will tell you that finding new customers costs a lot more money than it does to hang on to the ones we already have.

Michael Coleman, author of “The Collection Management Handbook,” states it statistically:

  • 80% of your customers pay you on time.
  • 18% intend to pay you, but for whatever reason they don’t feel like it right now.
  • 2% are “credit criminals” who never intend to pay you.
  • If everyone was like the 80% paying on time, we would never have any collection issues. All you have to do with these customers is keep them happy.

    And don’t worry about the 2% who never intend to pay you. Turn them into collections. Take them to court. But don’t waste your precious time on them. They are actually trying to deceive you.

    Where we as professional debtors and people who raise money can really do any good is with the 18% in the middle who 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.

    So if you want to collect much 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.

    Always use language with your customer who looks like this, “I know together we can get this problem resolved.” With these simple words, the debtor no longer thinks of you as a collector. In the eyes of the debtor you are now a problem solver. And you work with your debtor on the same side of the table to try to get the problem resolved.

    That’s what successful professional accounts receivable do. They are working to get their debtors to their side in an effort to get the issue resolved. And an added benefit may be that instead of having a deadbeat debtor, you have a customer for life.