I've often said that one of the most difficult jobs at CenterOne Financial Services is that of a collector, working with financially challenged customers all day, every day. And although the job is difficult, it doesn't have to be complex.

We've achieved great success in our collection activities by keeping our focus on three main points:

—Understanding the customer.

—Teaching our collectors what to say in response to common objections.

—Monitoring performance.

Understanding the Customer

It's been my experience that understanding the customer and maintaining the proper perspective are critical elements for collection success. Some collectors may view the customer as elusive, but our collectors believe the overwhelming majority of customers want to pay, and want to pay on time. They just need our help to figure out how to do it. 

Having this perspective enables our professional collectors to be part of the solution instead of being part of the problem. When customers receive calls from collectors, their first reaction is normally one of defense. When we approach the situation in a positive manner, wanting both sides to emerge victoriously, steps are made in the right direction toward a solution.

The key to understanding customers is to understand what emotions they may be experiencing when they receive collection calls, three of which can be anger, anxiety and embarrassment.

I was recently discussing the perspective that we bring to our collection calls with a manager of a subprime portfolio. Intellectually he understood and even agreed with our perspective, but emotionally I could tell he was struggling with it. 

"That approach may work for most collectors," he said, "but our customers are different. Our customers are nasty!" 

I was intrigued and offered to spend two hours listening to his collectors as they spoke to his customers. He had his management team join us and we listened to dozens of calls. After listening to the calls he was quick to proclaim "See? I was right. Our customers are nasty … and we create 80 percent of the problem because of the way we treat them!"

Teach Collectors What to Say

In collections there is a difference between aggression and professional tenacity, and remember that aggression is usually met with aggression. However, even when a customer may be 46 days overdue and owe us $600, I'm confident we'll get paid when our collector conducts herself in a way that makes her part of the solution rather than part of the problem. Keep the focus at all times on finding a solution to bring the account up to date.

The Fair Debt Collection Practices Act governs collection activities and is intended to protect customers from abusive collection practices. For years collectors have received training on FDCPA. As a result, they know what not to say. Unfortunately, many organizations stop there and fail to teach their collectors what to say.

The second key to our collections success is the ongoing training that our collectors receive. We've taken time to identify and understand the most common objections we hear from customers (thus far we have identified 28) and we've trained our collectors on what to say to overcome these objections. The proper response to an objection should be respectful, articulate and focused on working together to find a resolution to the deficiency balance.

A proper response to an objection follows a three step process. First, the collector offers empathy and lets the customer know that he or she understands their situation. Secondly, the account status is reviewed and the amount and number of days past due is divulged. Then, a list of solutions is offered for consideration.

It's been my experience that a professional collector's job is part collector, part salesperson and part customer service. As a salesperson, they need to motivate a customer to pay us before the customer pays someone else. And just like a sales professional, they understand how to present solutions to customers and avoid asking a "yes" or "no" question (because "no" is not the desired answer). Our collectors succeed because they have the proper perspective and have successfully conveyed to the customer that our goal is to work with them to find a solution and bring their account up to date.

A professional collector must also act as a customer service representative. Think about a time that you called a customer service department. It is likely that you placed the call because you had a problem and were looking for a solution. And that is normally the case with our collection customers — they have a problem and they need a solution.

Monitor Performance

The third key to collection success is to monitor performance. Monitor both what your collectors are saying to your customers as well as their results. We have achieved great results because we train collectors to maintain the proper perspective, we teach them what they are to say and we monitor their performance. By listening to their recorded calls, using our quality assurance scorecard to reinforce their positive performance and providing coaching on opportunities for improvement, we've taken our collection strategy and turned it into results.

David Walsh is director of training for CenterOne Financial Services, an industry leader in third-party servicing. CenterOne is a subsidiary of World Omni Financial Corp., a diversified financial services company, with headquarters in Deerfield Beach, Fla. World Omni is a subsidiary of JM Family Enterprise Inc., an $11.1 billion diversified automotive company ranked on the FORTUNE 100 Best Companies to Work For list for nine consecutive years, and in the top 10 of InformationWeek 500's list of leading technology innovators, having made the list for five years running. David Walsh can be reached at dwalsh@ctrone.com or (952) 736-8811.