Over the last ten years, the number one topic requested at our credit seminars is “how to make an effective collection call.” The best medium for this still remains the telephone; however just picking up the phone is not good enough. If you don’t have a predetermined strategy in place, you’re probably spinning your wheels – being ineffective and costing your company money.
So how do you improve?
Here are the top ten steps you can take right now:
1. Know your customer and their business. Are they impacted by seasonal cash flow etc.?
2. Deciding what strategies you will use to stay on track.
3. Set goals for yourself. For example – reduce DSO by 12% to improve cash flow.
4. Deciding and outlining which strategies you will use to achieve its goals.
5. Create effective call scripts so the conversation flows well and you can effectively manage objections and/or stall tactics.
6. Measure your results to see what works and what does not. Establish key performance indicators (KPI) to help benchmark future results/ activities.
7. Make detailed notes of your conversations with your customers. Before hanging up the phone – provide the customer of a recap of your understanding of the conversation. Better to catch misunderstandings now.
8. Try to establish quickly if the customer is slow paying because of a dispute or cash flow issues. You can increase customer satisfaction by simply listening. If there is a legitimate dispute – deal with it. If it is a cash flow problem – see if you can work with the customer.
9. Be decisive. If you are getting many promises but no meaningful action (money) then consider bringing in a professional collection agency or lawyer. If you don’t follow through – your customer will take advantage of you.
10. Consistency is key. Consistent follow up – consistency doing what you say you’re going to do. Customers (and your bossJ) will soon learn that your invoices get paid before others.