I’ve been having a problem at my company over the past couple of years trying to keep our collection people from getting bored and burned out in their jobs.
Our company sells a magazine on credit and most customers who fill out the order form from the magazine owe less than $100.00 for a one year subscription. Now, your first impulse might be to suggest that we should require all of these customers to pay by credit card in advance. However, through our bad debt and write-off analysis, we have found that we are able to expand sales to our paying customer base at a significant level to greatly offset the delinquent accounts.
That said, at any given time, we probably have over 3,000 past due customers that need a friendly reminder and another 400-500 that need considerable follow-up. Our problem is that the collection process we have now doesn’t seem to be working as our team of three collectors tells us that the one pattern job becomes very boring after a while. If we’re lucky, we’re able to keep a collector for about two years before they leave us. Any thoughts on how we can improve this situation?
Signed: Trying to light a fire under a burned out collector!
Dear Light a fire,
I’m assuming you’re selling to tens of thousands of consumers and that the 3,000 or so past due customers are all being handled by your three person collection team. From the get go, it sounds like each collector is handling about 1,000 cases per month, which is about 50 collection calls per day. Depending upon your collection system, to me that sounds manageable, but after a while doing anything over and over can become a drag. Although I would need to know more details about your collection system, here’s the short list on how you might be able to keep things fresh with your collectors:
1. When your collector connects to a customer answering machine, have an option in place where the collector can leave an automated message detailing the past due item. This will save them from expending a great deal of time and energy by not having to physically leave a message.
2. I’m assuming that email statements are sent out to your past due customers as well but in case these are being sent out manually, this should be an automated process.
3. For the 400-500 that need considerable follow-up, you may want to try rotating the accounts among the collectors, especially if you’re able to speak with the customer. Sometimes a new voice will do the trick in getting the account collected.
4. If you have not established collection goals that integrate financial incentives, both on an individual and group level, for collecting at or beyond those goals, this can definitely perk up any collector’s disposition. Consider having goals for different time periods, such as daily, weekly and monthly to motivate for the short and long term.
5. Make sure that your collectors are given sufficient breaks to stay mentally focused. Since collection work can be stressful, particularly if you’re moving on from one difficult phone call to another, everyone needs time to get rebalanced.
Of course this list is not all inclusive. What I would suggest is that you and your team sit down together and create the collection environment, standards, procedures, and goals that are going to continue to keep them engaged.
Dear Crabby is a credit and collection advice column by Nancy Seiverd, President, CMI Credit Mediators Inc. Your thoughts (email@example.com) on what to advise are most welcome, and with your permission, we’ll reprint your comments in the next issue of our newsletter.