How Putting People First can help you achieve better collections success
Many people struggling with debt are afraid to answer the phone because of debt collectors. Stories abound online of aggressive debt collection tactics, deceptive debt collectors and debt collection scams.
Google “debt collector” and you won’t get many listings for debt collection agencies. Instead, you’ll see results like: “Why are they contacting me?” and “Why you should never pay a collection agency” and “How to deal with debt collectors.”
… And yet, most debt collectors aren’t in this business because they enjoy being mean or aggressive. They are just honest people trying to make a living.
In fact, debt collectors play a vital role in helping people reach financial security – especially in times of crisis. It’s our responsibility to reach out to people – often at their lowest point in life – and help get them to a better place.
We do this by:
- Educating people about their debts, rights and options
- Arranging payment plans that fit their unique financial situations
- Guiding them on a path to better financial health.
Debt collectors also help consumers indirectly by recovering outstanding debts that allow businesses to keep costs down. When debt is not recovered, these excess costs are passed on to consumers – especially low-income consumers – via higher prices, increased interest rates and a decreased supply of credit.
In 2018, third-party debt collection agencies returned $90.1 billion to U.S. creditors – an average savings of $706 per household, as businesses were not compelled to compensate for lost capital through increased prices (Source: “2020 State of the Industry Report,” ACA International).
So how can we, as professional debt collectors, help consumers to see us as allies leading them to a better future, instead of bullies attacking vulnerable victims?
“Debt collectors play a vital role in helping people reach financial security – especially in times of crisis.”
Empathy Is Key
The most important quality a successful debt collector has is empathy.
The collector needs to be able to put themselves in the debtor’s shoes and ask, “How would I feel if I was receiving this call?”
As Collection Manager at Cedar Financial, with 10 years of experience training and coaching skilled collectors and 15 years in collections, I know that the better we understand the feelings of consumers, the easier it is to relate and work together to find an amicable solution.
When we validate consumers’ experiences and treat them with the human dignity they deserve, they begin to see us as allies instead of enemies. This means they are much more receptive to taking positive action towards resolving their debt – such as setting up a payment plan or paying the debt in full.
When we do this well, when we treat people with kindness – as people – that’s when we get surprised consumers coming back and saying: “Wow – you guys were not what I was expecting. I can’t thank you enough for all your help. It really made a difference.”
And that is a great feeling. That is what makes my day, both as a debt collector and a manager.
“The most important quality a successful debt collector has is empathy.”
Listen to What Consumers Really Want
So back to our question: How can we maximize empathy to help more people see collectors as the well-meaning financial allies we are?
The answer is to listen – really listen.
In all my years of listening, here are a few things I’ve learned about what consumers really want debt collectors to know:
1. We have fears and frustrations – just like you
If an account has reached collections, it rarely means things are going well. It’s likely that there are other things going on in that person’s life that have caused the debt or made it worse.
For example, someone with a medical bill might be recovering from an injury and unable to work. Or a student might have had to drop out for personal reasons that were out of their control.
When a consumer receives a collection call, it can trigger a lot of stressful emotions – fear of poverty, shame about having a debt or even anger at their plight – which can make them defensive and distrustful. They immediately go into “fight or flight” mode, which makes it nearly impossible to have a productive conversation.
To be effective communicators, collectors need to approach every situation with patience, kindness and understanding. Staying calm goes a long way towards soothing any fears or doubts the consumer may have.
From there, we can start working together towards a solution.
“To be effective communicators, collectors need to approach every situation with patience, kindness and understanding.”
2. We have needs and dreams, too
On top of all those fears and frustrations, consumers might feel like they’ve failed at life. After all, their ideal future probably didn’t include being in debt. They have hopes and dreams and a desire to thrive, just like anybody else.
But for one reason or another, they’ve landed here – talking to a debt collector.
In some cases, they may even have a hard time meeting basic needs. While they want to pay the debt, they need debt collectors to understand that their own needs come first.
As compassionate collectors, we must let people know that we care. That their needs and dreams matter.
Consumers need to know that we can help them meet their needs by providing flexible and affordable payment options that get them one step closer to their dreams.
3. We are doing our best
We are human.
As humans, we are not perfect. We have the right to make mistakes in the never-ending pursuit of happiness.
Consumers are human, too.
Maybe they’ve made a few more mistakes. Or one big mistake that landed them here. Or maybe they were just a victim of circumstance. Either way, they’re trying their best to make it in this world.
Understanding that people are human – and leaving your judgment at the door – is essential for collections work. After all, even with the best intentions, not everything is in your control. One day, you may be there too.
“Understanding that people are human – and leaving your judgment at the door – is essential for collections work.”
Be an Ally – NOT an Enemy
Getting a collections call can be an emotional experience. When people are stressed out, they’re not likely to be very reasonable, which makes working with them very difficult – especially if you try to force the issue.
By using a People-First, Human-Centric Approach, skilled debt collectors can effectively de-escalate emotionally charged situations, build trust and give consumers the resources they need to get their bills paid and their lives back on track.
By being kind in everything we do, we can show them that we are an ally – not an enemy.
About the Author
With over 15 years of professional debt collection experience – seven of them at Cedar Financial – Justin Franklin trains, supervises and coaches team members in top communication, negotiation, and dispute resolution techniques to achieve greater success for our clients. He has developed tailored training programs and scripts that reduce agent ramp time, increase liquidation and ensure compliance, while Putting People First.