Commercial Debt Collection The Goldilocks Way

7 Aug

This is too cold … that is too hot … but THIS is JUST RIGHT

Goldilocks, C2C ResourcesAh, Goldilocks … that shameless little trespasser that ate the meals of others, broke their chairs and hunkered in their cozy beds.

In spite of the story’s unexciting ending and lack of resolution to the trespassing crime, there is a tidy lesson in there that even Debt Collectors can appreciate.

Goldilocks was able to find a sweet spot where things were just right.

When it comes to debt collection, the collector must do the same!

Too Cold VS Too Hot

Collection calls must cut to the chase. There’s a specific amount owed, there is a due date missed. Those are the facts of the case.

However, your tone and demeanor during a call can profoundly drive the outcome. Too cold, and there’s likely to be a cold response from your customer that may result in little or no cooperation. Too hot, and you’re going to end up in an argument. Most customers don’t feel motivated to pay if they feel you just picked a fight.

Too Big VS Too Small

Inflating the consequences of non-payment can really come back to bite you. If you have no intention of filing a suit, then don’t make that threat. It only takes one big empty threat for your customer to learn that you don’t mean what you say. In the end, you’ll just come off as an exaggerating bully.

Conversely, having too small a consequence (or no consequence at all) can be motivation to put your payment on the back burner. Your customer owes a lot of other people, and most of them attach a consequence to paying late. So, if he’s floating some bills and your invoice is cheaper to ignore, he’s going to pick YOU.

Too Hard VS Too Soft

An approach that is too hard and inflexible will cause a shut down faster than Goldilocks can run. If YOUR method of payment is the ONLY one you’ll consider, you may leave a good customer feeling cornered and frustrated.

But you can’t go too soft, either. If you willingly accept a list of lame excuses and broken promises, you also won’t see a check in the mail. Not tomorrow. Not next week.

Finding the Just Right Place

Somewhere in the middle is that sweet spot that Goldilocks found. You have to find it, too. And you can! The next time you prepare for a collection call, take these steps to make the conditions just right:

1. Stick with the facts. Have them neatly organized and in front of you.

2. Listen to your customer’s story. There may be a resolution in the details.

4. Be open to payment ideas. Maybe he truly cannot pay in full today. But he may have a great idea that’s the next best thing.

5. Be a problem solver. Before you call, make a list of acceptable outcomes and payment options to offer your customer if needed.

6. Match your customer’s actions. Know what’s behind your customer actions so your approach will be spot-on.

7. Never exaggerate consequences. Say what you mean and follow through if necessary. If you intend a lawsuit, then you can say that. But if you don’t, don’t say it.

There is a Goldilocks zone that’s just right for debt collectors. It’ll vary from customer to customer, but with thought and preparation, you can operate in the just-right zone for the best possible outcome!


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