Effective debt collection techniques – Have the debtor discuss the debt

If you want to raise more money, just shut up and listen. Many professional accounts receivable professionals and people who collect money from criminal accounts talk too much.

As I educate people to improve their collection techniques, I have noticed that collectors, while on the phone or face-to-face with debtors, typically hold most of it while the debtor does not listen. The result is that the collector does not get paid.

One of the most important principles of collection management is to get debtors to discuss their accounts. When debtors talk about their debt, you’re well on your way to raising money.

So how do we get our debtors talking? The most important thing we need to do is stop making statements and start asking questions. And in the broadest sense, there are two kinds of questions we can ask: closed questions and open questions.

Of course, a closed question is what the debtor can answer with a “yes or a” no. For example, if you Asking, “Would you like to send me a check today?”, The debtor can say, “Yep.” “No.” “Not in your life.” No speech is required.

On the other hand, an open question is a worded one, so the debtor is almost forced to speak. For example, “Can you tell me what’s going on with this account?” Or, if it’s a small commercial account, “How’s your business?”

Or, if you know something about the customer that I hope you do, “How about the machine that broke down last month and caused some production problems, is it up and running yet?” Or, “How’s your daughter doing what was in the hospital last month?”

Here is one I learned from Stephen Covey, the author of The 7 Habits of Highly Effective People. When they show some frustration that they usually do, ask “You seem a little frustrated with this, are you?”

These kinds of open questions get your debtor to discuss the account. Once you get them to do it, you’re on your way to raising money. It’s like a tennis match. As you speak, the benefit is at the debtor’s end. But while your debtor is talking, the benefit is your end.

So here is what I recommend. During your preparation phase, before picking up the phone to call your debtors or meet them face-to-face, write some open-ended questions in advance, tailored to those you think will make them discuss their debts.

The best I’ve ever seen in raising money speaks very little. All they do is ask open-ended questions designed to get the debtor to discuss the account. And with the kind of questions they ask, they have a way of gently taking their debtors where they want them to go.

And if I could choose a skill that I think is more important than all the other skills to do the business of raising money well, I would choose listening skills. The best I’ve ever seen doesn’t do much talking, but they listen a lot.

So keep in mind that if you want to get paid, you will have to get debtors to discuss their debt. And the best way to do that is to ask open-ended questions tailored to the particular debtor. This way you talk as little as possible and the debtor speaks as much as possible. And the result is that you get paid.