What’s so negative about debt collections?
Categorised in: Our Blog
“Collections…” Why does that word evoke such negative emotions? Let’s look at it from a fresh perspective! No one likes to be late with their payments. No one wants to feel like a “default” customer. “Default”, “late”, “past-due” and “delinquent” are all words used to describe a customer or client who has not paid their bill in the terms of their agreement. If you look up the word “delinquent” in the thesaurus one of the synonyms is “criminal”! The end result is “Collections”. No wonder we don’t like that word! What if the word “Collections” was associated with words like: “Solution”, “Settle”, “Solve” or “Anew”? Look those words up in the thesaurus! We might then associate “Collections” with getting (or giving someone) a fresh start. It was a tough year for many people. Job loss, foreclosures, the ongoing wars in the world and of course our 401k turning into a 201k have made for depressing news stories.
Let’s get a new perspective on things! This can be a year of “fresh starts”. That might mean changing the way we do things in order to get a different result. When I was a Collections Director I always trained my collectors to do just that. We tried to give the customer or client the feeling that they are getting a fresh start, a new beginning. I believe that this perspective and approach works wonders with people! There IS a specific methodology to it and at least 8 steps the collector can take to do this. I would be happy to provide that information free of charge. It is important to mention that there is a very real and tangible benefit to ALL customers first. Around $40 billion dollars is returned to creditors every year due to the efforts of ethical and legitimate collection services. What does this mean to a customer? Well, it’s like writing them a check for $350.00 annually. You see, if the money was never collected, the customers would have to pay the equivalent of that amount each year in higher prices to make up for those losses! How about the creditor? How do those losses affect the overall health of a company? You begin to lose money whenever payment is not received within the net terms. As the account gets older, the likelihood of collection decreases and your losses from an inability to use the money substantially increase. For example: If you operate at a 4% profit margin, $1000.00 that cannot be collected requires $25000.00 in new sales just to break even from that $1000.00 loss! What if your company operates at a higher profit margin? You can do the math… Whether you are a creditor or a customer, I hope this year brings you peace, health and prosperity.
Best Wishes, Brent
Brent Anderson, Director of Business Development – P.C.S. Brent is a Professional Debt Collection Consultant and Speaker with 20 years of experience in all aspects of the business of debt collection.