If you want to raise more money, shut up and listen. Many accounts receivable professionals and people who collect money from delinquent accounts talk too much.
In training people to improve their collection techniques, I have noticed that collectors, while on the phone or meeting face-to-face with debtors, typically do most of the talking while the debtor is not listening. The result is that the collector does not charge.
One of the key principles of collection management is getting debtors to discuss their accounts. Once debtors are talking about their debts, you’re well on your way to collecting the money.
So how do we get our debtors talking? The main thing we have to do is stop making statements and start asking questions. And, in the broadest sense, there are two types of questions that we can ask: closed questions and open questions.
Of course, a closed question is one that the debtor can answer with “yes” or “no.” For example, if you ask, “Will you send me a check today?”, the debtor can answer, “Yes. “Nope.” “Not in your life.” No talking required.
On the other hand, an open question is one formulated in such a way that the debtor is almost forced to speak. For example, “Can you tell me what’s going on with this account?” Or, if it’s a small business account, “How’s your business?”
Or, if you know something about the customer, which I hope you do, “How’s that machine that broke down last month and caused you some production problems? Is it up and running now?” Or, “How is your daughter who was in the hospital last month?”
Here’s one I learned from Stephen Covey, the author of The 7 Habits of Highly Effective People. When he shows some frustration, which he usually does, ask, “You seem a little frustrated with this, don’t you?”
Those kinds of open-ended questions will get your debtor to dispute the account. And once you do, you’ll be on your way to collecting the money. It’s like a tennis match. As he speaks, the advantage is on the debtor’s end. But while his debtor speaks, the advantage is on his side.
So this 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 tailored open-ended questions ahead of time that you think will get them talking about their debt.
The best I’ve seen collecting money speak very little. All they do is ask open-ended questions designed to get the debtor to discuss the account. And because of the type of questions they ask, they have a way of taking their debtors where they want them to go.
And if I could pick one skill that I think is more important than all the other skills to do well in the business of collecting money, I would pick listening skills. The best I’ve seen never talk much, but listen a lot.
So remember that if you want to get paid, you will have to get the debtors to discuss their debts. And the best way to do that is to ask open-ended questions tailored to that particular debtor. By doing so, you are talking as little as possible and the debtor is talking as much as possible. And the result is that you get paid.