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Art, Science and Debt Collection Best Practices

May 20, 2020
ai in contact centers

Blog

Art, Science and Debt Collection Best Practices

by | May 20, 2020 | Accounts Receivable Management

Debt collection best practices are essential for consumers all over the world as we are experiencing massive changes in their lives, everything from enduring self isolation to loss of income to illness concerns. Approximately 28% of Americans have at least one debt in collections. Proceeding with the business of debt collections will undoubtedly be one of the most uncomfortable tasks businesses will undertake, and worse, if it’s done without credit and collections best practices as it may also result in irreparable damage.

So how does a business go about addressing this touchy subject in a world forever changed by COVID-19? At ContactPoint360, we have a couple of thoughts on that.

What was true before is true now

Debt collections is a triage business. There is no one-size-fits-all or quick fix solution. As before Covid-19, it’s going to take a very measured and human approach. Putting your outstanding debt into the hands of a highly trained, emotionally mature professional can achieve optimal results – without doing damage to a company’s reputation.

Credit Collections is both art and science

Collections calls are a sensitive exchange for both the representative and the customer. Although more complex than other types of calls, the right tools can facilitate more comfortable interactions.

Before undertaking the sensitive challenge of collections, both during and after Covid-19, ask yourself if your business is adequately equipped to handle it or if hiring an experienced BPO is a smarter choice.

With a professional approach, your team can tackle collections with care in a compliant and effective manner using the debt collection tips. Top-notch software and training boosts your team’s collections strategy and doesn’t impact your customers adversely.

Compliance and the Human Element

Collections require a sensitive team that complies with the law. It is illegal to harass customers with calls, and it is not in your best benefit. Customers have families and may have few financial resources.

Successfully helping a customer pay off their debt through a plan and strategy is more effective than harassment and fear.

Debt Collection Tips for Successful Collection

Meeting your collections target requires a team with professional training and the right software to assist and enhance their strategy—strategies employed to prevent people from becoming defensive or avoidant increase the likelihood of success along with certain credit collection tips. Credit and collections can be a delicate dance. On one side, you need to recover outstanding debts. On the other, you must treat debtors with respect and adhere to ethical and legal guidelines. Here are some key best practices in credit and collections to find a fine balance in the art and science of collections:

Empathy and Collaboration

  • Understand the debtor’s situation: Listen actively and show genuine concern.
  • Seek solutions, not just payments: Work together to create a manageable repayment plan.
  • Respect and professionalism: Always treat debtors with courtesy and avoid aggressive tactics.

Compliance and Ethics

  • Know the rules: Stay updated on relevant laws and regulations in your region.
  • Transparency is key: Clearly communicate terms, fees, and debt collection processes.
  • Fairness in every step: Avoid harassment, threats, or misleading information.

Technology and Automation

  • Streamline communication: Utilize automated messages, emails, and online portals.
  • Data-driven insights: Analyze trends to predict and prevent potential delinquencies.
  • Self-service options: Empower debtors to manage their accounts and make payments easily.

Resources & Guidance

  • Share financial literacy tips: Offer budgeting and debt management resources.
  • Partner with support organizations: Connect debtors with counseling and assistance programs.
  • Success stories: Showcase examples of positive resolution and financial recovery.

Art of Training

Nobody looks forward to a collections call, and not all employees have the right training to handle them. Intimidation and illegal tactics result in hefty fines and penalties, so sensitivity is essential. Proper training helps staff efficiently manage:

  • Avoidance
  • Derailment
  • Manipulative tactics
  • Verbal abuse

Teams with intense and relevant instructions are more likely to get customers to commit to a payment plan. Since customers react by deflecting or making excuses, training your representatives lets them counter any scenario they encounter.

The Science of Software

The right software increases the efficiency of your collections process. Ample software exists to boost your team’s performance by centralizing data about a client.

Some offer automatic dialing services to save time instead of manual calling. Others offer auto-recording with each call, which is necessary for defense in case of a lawsuit. Applying the collection tips for debt collectors acts as the edifice of the science of collection.  

How Collection Analytics Drive Improved Call Center Performance

Collection analytics measure your team’s activity and performance. Based on your targets and goals, you can make adjustments based on the data you receive. Collection analytics also reduce risk by monitoring how your team is delivering their communication.

Speech Analytics

Speech analytics software monitors how your staff speaks to customers and identifies problematic behavior. By highlighting potential risky behavior, the organization can re-train the employee.

Over time, this causes a noticeable increase in the quality of your staff. Team members who consistently perform well also receive recognition for their services through speech analytics.

By giving incentives on call quality and rewarding targets met, collection analytics lets your team perform collections with care.

Collections calls don’t have to be a low-performing segment in your company. With the right software tools and thorough training, your team is more likely to meet its target. By applying a professional approach and using technology to gather data, your representative’s task becomes more manageable.

Applying ethical and efficient collections standards for your company pays off in the long run. Proper software and training decrease a company’s legal liability and enhances its reputation over time. A “collections with care” approach is the best way to guarantee a smooth and efficient process for all stakeholders.

Conclusion

We at ContactPoint360 apply successful debt collection techniques to elevate your debt collection process to open the stream of unpaid debts back to make your business cash flow rich in 2024. Our debt collection services have a history of consistently utilizing soft skills to establish better connections with customers and technology to streamline the process, making us more cost-effective, efficient, and, successful in the field of debt collection. 

Want to learn more? Talk to our CX Expert today!

Wendy Hanlan

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