Effective Collection Techniques – Getting the Debtor to Discuss the Debt

If you want to collect more money just shut up and listen. Many accounts receivable professionals and people who collect money from delinquent accounts talk way too much.

In training people to improve their collection techniques, I have noticed that collectors, while on the phone or meeting with debtors face-to-face, typically do most of the talking while the debtor is not listening. The result is the collector does not get paid.

One of the key principles of collection management is to get debtors to discuss their accounts. Once debtors are talking about their debts you are well on the way to collecting the money.

So how do we get our debtors to talk? The main thing we have to do is to stop making statements and start asking questions. And, in the broadest sense, there are two kinds of questions we can ask: closed-ended questions and open-ended questions.

Of course, a closed-ended question is one the debtor can answer with a “yes or a “no.” For example, if you ask, “Will you send me a check today?”, the debtor can say, “Yep.” “Nope.” “Not in your life.” There is no talking required.

On the other hand, an open-ended question is one phrased so the debtor is almost forced to talk. For example, “Can you tell me what’s going on with this account?” Or, if it’s a small commercial account, “How’s your business doing?”

Or, if you know something about the customer, which I hope you do, “How’s that machine doing that broke down last month and caused you some production problems, is it up and running yet?” Or, “How’s your daughter doing that was in the hospital last month?”

Here’s one that I learned from Stephen Covey, the author of The 7 Habits of Highly Effective People. When they show some frustration, which they usually do, ask “You seem a little frustrated with this, are you?”

Those kind of open-ended questions will get your debtor to discuss the account. And once you having them doing it you’re on the way to collecting the money. It’s like a tennis match. While you’re talking the advantage is on the debtor’s end. But while your debtor is talking, the advantage is on your end.

So here is what I recommend. During your preparation phase, before you pick up the phone to call your debtors or meet with them face-to-face, write down some open-ended questions, in advance, tailored for them that you think will get them to discuss their debt.

The best I have ever seen at collecting money talk very little. All they do is ask open-ended questions designed to get the debtor to discuss the account. And by the kind of questions they ask they have a way to gently take their debtors where they want them to go.

And if I could choose one skill that I think is more important than all the other skills to do the business of collecting money well, I would choose listening skills. The best I’ve ever seen do not do much talking, but they do a lot of listening.

So remember if you want to get paid you’re going to have to get debtors to discuss their debts. And the best way to do that is to ask open-ended questions tailored for that particular debtor. By doing so, you’re talking as little as possible and the debtor is talking as much as possible. And the result is that you get paid.