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Managing a Massive Collections Effort
Collection Manager's Letter - January 2003 |
You’re managing 85 professional collectors and overseeing the annual collection of $20 billion for 2,000 client companies. Each of those clients expects your collectors to make customer relations a priority. How do you handle this challenge?
We talked with a man who confronts challenges such as these every day.
Robert Weiss, Vice President and Collection Manager for CIT Commercial Services, has over 20 years of collection management experience. As a result, Weiss has experienced every aspect of the collections process , from hiring and training collectors, to uncovering terms discrepancies and evaluating late payment justifications.
“In the collections profession, I’ve had the opportunity to hear a wide range of innovative excuses and reasons for overdue payments, and sometimes, they aren’t much better than, ‘the dog ate the invoice,’” said Weiss. “However, other times, the reason for delayed payments is the result of term discrepancies, which is when the collector thinks the payment terms are net 30 days and the customer thinks they are net 60 days.”
“When a sales person offers a potential customer an extra 30 days to pay, these extended terms can be the key to sealing a deal. Unfortunately, this special accommodation can also lead to unforeseen collection troubles down the road. In any case, once our collectors discover that this is the reason why a customer is paying ‘late,’ we notify the client to resolve the issue professionally and quickly.”
Selection and Training
Every day collectors are faced with new challenges. Weiss says the key to managing these challenges is training, training, and training.
“The selection process to be a CIT Commercial Services collector is tough. In addition to the customary background checks and interviews, we like to get a sense of how each candidate handles challenging collection situations, such as how they react if a customer yells at them. They need to keep calm.”
Weiss feels that the best candidates for a career in collections tend to have customer-service backgrounds, particularly in banking and insurance.
“It is my experience that customer service skills, or people skills, can take a long time for people to master, but collection skills can be taught. Therefore, we generally like to hire people that have experience in customer relations.”
Selected candidates then undergo a two-week training program that includes learning how to use CIT’s computer program and CIT’s collections procedures, enhancing one’s listening skills, developing collection skills and of course, role-playing. Once the candidates are comfortable with the systems, skills and techniques, they progress to (monitored) small-debt collections.
“Small-debt collections are a good starting point for collectors new to the business. Sometimes, making that first call is the toughest step, and the experience can serve as a confidence boost when faced with tougher calls down the road. The emphasis throughout our training process and afterward is on being insistent but not confrontational, and on documenting everything that is said for future reference.”
Words of Wisdom
Weiss has compiled a five-point list of the basics of superior collector performance. Here is his advice for collectors:
1. Don’t accept a response that says, “I’ll pay as soon as I can." It’s imperative to define a reasonable timeframe for either partial payment or payment in full; and the customer must understand they have to adhere to their commitment.
2. Ask why the customer is paying late when obtaining commitments for payment. Perhaps it is a terms issue that occurs consistently, perhaps due to unauthorized extensions given by salespeople. On the other hand, it could possibly be a serious cash flow issue, which should be communicated to the credit department immediately.
3. Be aware that leaving too many messages or allowing broken commitments to continue is a sure sign that the collector's activities are not being taken seriously. After one or two messages, the collector should actively seek out someone with more authority at the customer level. “If you are working with the owner,” advises Weiss, “alert the credit officer so that merchandise leverage could possibly be used to extract payment.”
4. Be more than a collection agent; be a professional customer service representative as well. Often there are issues that create slow payments or the withholding of payments. The collector needs to listen to all the issues in order to be effective and to resolve the situation. Problem resolution supports good client service levels and should keep the credit lines from being negatively impacted.
5. Maintain a professional attitude and control your emotions. “Once you lose your control, you have fallen into the debtor's trap,” Weiss says. “Stick to the business at hand, which is to collect the money.”
“Every day companies with financial troubles are in the headlines. This means our collectors are operating in one of the toughest environments in years. It is a testimonial to their training and a variety of resources like Excel, Email and telephone technology that has enabled our collectors to garner the highest ratings ever by our clients. “
When it comes to collections, Weiss’ staff has proven they can show us the money.
