How proper customer service helped me increase my efficiency at collecting debt

Today I was back at the office after working from home most of the past 6 months. In the middle of the afternoon, I was surprised by one of my teammates with a bag of cookies that one of our customers sent to me. ME! It’s definitely not every day that I receive gifts from our customers, but this one is special. This particular customer is one that I am dealing more closely with these days as their business is struggling during this pandemic and some of his invoices are past due. And while I enjoy my cookies, I remember the steps that got me here.

The first thought I would have when it comes to collecting money was the memories of the phone calls from a collections agency. While being extremely annoying and causing incredible discomfort, the caller would act like a machine, didn’t know a thing about me, or the product/service I have purchased, and literally it was just interested in getting paid. Maybe the person behind that call worked under commission, or it was under such pressure that immediately passed through the burden to me. It was always awkward and never really motivated me to pay my own debt.

When I was given the task to help the Accounts Receivable department to collect money, I didn’t know exactly where to start, but I had 2 things in my head: the memories from the calls that I received in my past and the idea that if I had to do the same thing, I would be miserable.

See, I came from the service industry. We value customer service more than anything. And I truly believe that proper customer service can solve most of the problems, if not all. And it was with that thought in my head that I decided to create the structure for my collections work.

Getting to know my customer

When I first ran the batch of statements I had a list of 100 accounts. My first step was to put a name on it (and sometimes a voice), instead of the customer number. It had to be personal, Sometimes I was also able to research more in-depth. I would ask around the office if someone knew the person and if so, any tips on how the person was and how easy it was in the past to talk with them. The more you know about them, the easier would be to approach them.

I always started with friendly reminders and a copy of the statement while introducing myself. The customer needs to know that from now on you will be in contact on a frequent basis. I always had in mind that I was applying to become best friends (or close to it), so I was really nice.

Getting to know my customer was a crucial part because I needed to recognize that not all customers are the same. Some long-time customers that have never missed a payment and now are struggling would never be treated the same as a new customer who has never paid for the services. In order for me to negotiate any deals and properly direct my approach, I needed to know them.

Consistency

It probably took me around 1 ½ month of weekly communicating with the customer and trying to get to know them as much as possible, until I decided to go to a more straight forward approach such as holding their account and stopping any service and sales until we got paid.

A lot of times, the consistency itself would prevent the interrupting of service because I would be able to identify the issue. Sometimes the customer was just really disorganized, other times they just needed a reminder, and in very few times the customer would be struggling and would request a special payment plan.

It’s a teamwork

A lot of people ignore that part, but if you are truly doing your customer service work, you cannot forget. You will easily be paid if all teams come together. If the sales process was smooth and clear, if the installing/delivering team was successful; if the customer is happy with the final product, getting paid won’t be as hard as we think. One bad experience in the middle of the circle will cause an overall dissatisfaction and the customer to delay payments.

While approaching the customer, I needed to be aware of this. I would review the project and sales notes. I would talk with my team members and understand what happened. Why is the customer complaining? How can we do better?

Part of the teamwork was also getting along with my own accounting team. Understanding how long it takes for a payment to post in the customer account, reviewing their payment terms, credit limits, and running new credit applications, was some of the work done in order to better protect us and deliver clear communication and expectation to the customer.

Full circle

Do it, and repeat! I would get to know my customer, keep consistency in our communication, make sure our whole company was doing the best and delivering our part, and repeat. And as simple as it was, we started getting paid and money was flowing again.

The customer service I was providing, would also mean an overall good image for the company and future sales. Customers were so happy to communicate with me that they would contact me asking for quotes. I was finally becoming a good image for the company.

It is true that every company will eventually face a situation where a client does not pay on time, or cannot pay for the full amount for the services and products that were previously delivered. While we cannot prevent these situations, we can definitely increase our customer service in order to reduce the chances of being impacted by the customer’s debt.

While it is easier to blame the customer when you are not being paid on time, take a moment to answer this question: how good is your customer service? I can guarantee that after getting your internal processes organized, your customer will more easily walk holding hands with you. And sending you payments along with cookies.