Tim Paulsen is an international specialist training credit and collection professionals. Drawing on his experience as a collector, fraud investigator, skip-trace manager, and consultant, he is the author of Paid in Full, a popular book on collections, now in its second edition.
When Tim trains collection departments, either as a consultant or during one of his famed presentations, one of the things he stresses is that the words you choose can have an impact on your success in collecting an outstanding payment. This is true in part because these words reflect the mood you are in, and that may not be optimal for your success.
One of the problems a collector may face is using acronyms or phrases that the debtor simply doesn’t understand. To make a bigger impact, tell the debtor what this means to them — that it will hurt their credit, for example — something of interest to them.
Quoting Fran Tarkenton, Tim drives home the point that “People don’t change their behaviour unless it makes a difference for them to do so.” It’s important to “keep it simple,” he says.
Here is an example of what you might say:
“Will you please mail me a cheque today for $XX?”
Only ten words – but powerful:
‘Will’ rather than can. “I want them thinking about a solid commitment,” he explains.
‘Please’. “There is nothing wrong with please and thank you, no reason to not be polite, but we don’t beg for the money.”
‘Mail’ is specific. People think in pictures and this puts one in the debtor’s mind. If you don’t want it in the mail, ask for delivery, pick up, etc.
‘Cheque’. Once again, specific. You may choose options of credit card payments for consumer and some commercial accounts.
‘Today’ creates a sense of urgency.
‘$XX’. Demand the full amount due. “I’m not looking for just a payment,” Tim explains. “If we negotiate, we will do so based on the full amount, not a partial payment.”
One of Tim’s special talents is excuse-busting. If fact, he’s made a science of it by creating a software product that automatically leads collectors to counter-statements which instantly dissolve a litany of common excuses. Anticipating these roadblocks can prevent the debtor from delaying the inevitable collection, force them to face up to the problem and focus on how to resolve it.
Another important facet of effective debt collecting is understanding that carrots weigh more than sticks. This is particularly important if the collector is trying to salvage the relationship with the debtor.
When motivating in-house collectors, an area of expertise for Tim, he counsels collectors to keep in mind the purpose of the business they represent. Applying his rationale, consider your objective as a landlord to provide rental housing. Keep that front and center in your mind as you sort through excuses and problems tenants may be facing. Help when you can, and when you can’t, you must end the relationship in order to continue to provide housing for others.
Don’t underestimate the benefits of preparation. “We know the value of stretching and warming up before any exercise or sporting event, getting our body ready for what it’s going to be asked to do,” he explains. “What about your work? Too many of us pick up a telephone or walk into a meeting and haven’t taken the time to get our ‘head’ around the upcoming task or assignment.”
It is also important to keep up with accounts that show signs of delinquency — late payments. Staying on top of it is easier than getting behind it. “We all know from our high school physics classes that it takes a lot of effort to get an object in motion. Once it gets going…not so much,” Tim explains. “It doesn’t matter much whether we are riding a bicycle, driving a car, or trying to get a debtor out of the habit of paying several days past the due date.”
“If your ‘customer’ does not know your policy or you do not enforce it reasonably, then you don’t have one,” Tim warns. “It’s not entirely their fault if you have been shy.” Call or send a letter: “We realize that perhaps we were not clear in the past about the terms you agreed to so we thought it best to…”, and then your policy will be enforced.
Referring to the classic movie Jaws, Tim recounts a dramatic scene where the town’s sheriff first gets a glimpse at the infamous Great White and exclaims, “We need a bigger boat!” Recognize when you are in over your head collecting a debt, and bring in the specialists. Sometimes, you will need a bigger boat.
Collection expert, consultant and author Tim Paulsen with T.R Paulsen and Associates has delivered his highly rated training seminars on “Effective Collection Techniques” to clients all across Canada and the United States as well as in Bahamas, Bermuda, China, India, Indonesia, Jamaica, Malaysia, Philippines, and Singapore and the U.A.E. For more information, visit
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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.