Follow These Tips to Decrease Missed Payments
Updated: Jan 6
As collectors, promises to pay can be overwhelming. We sometimes worry that consumers will forget to pay or they’ll try to extend the payment past the date they promised to pay on. If you feel this way, you’re not alone.
You’ll be happy to know that you can decrease your ratio of missed payments on promises to pay using a few simple tips.
Stick with me, and you’ll be a pro at decreasing the amount of missed payments at your agency in no time.
Avoid Round Numbers
Something I noticed at my agency is that when monthly amounts on payment arrangements were round numbers, missed payments were more frequent. For example, if the monthly payment was $200, the likelihood that the consumer would miss a payment was higher.
When I realized this, I began to offer payments that were a similar amount with one key difference: They weren’t round numbers. Instead of $200, I would offer $202.56, for example. As you can see, the number itself is only $2.56 cents more. Yet, consumers are more likely to pay a non-rounded amount.
Think about it: $202.56 mimics a “real” bill, such as a car payment or a utility bill. So, a consumer feels better about paying it because it doesn’t feel like an arbitrary payment; it feels like just another monthly expense.
Non-round numbers also feel like they’re more intentional than round ones. While the calculations for the payment arrangement are similar, the consumer may have a psychological shift when they see a non-round number versus a round one. In other words, they may feel like the calculation to get that number is more legitimate than a round number.
If your agency is prone to offering round payment arrangement amounts, try this method! I wholeheartedly believe it will positively impact your missed payments ratio.
Note: It’s helpful to have a payment guidelines grid set up for these situations. That way, the collector doesn’t have to make a payment arrangement decision on a whim. Instead, they’ll have a set of guidelines to help them negotiate, such as if the balance is around $2,500, a payment arrangement lasting 9 months or fewer is offered. Ask your collection manager if your agency has a grid created.
Try to Get Some No’s
This is one of my most valuable tips, yet so many people are hesitant to use it.
On a collection call, consumers’ “no’s” are currency.
You read that right: The word “no” gets you one step closer to an agreement that suits both you and the consumer.
Here’s how it works: When a consumer says, “no,” you’re giving him the power to make a decision that will work for him. Consumers thrive when they know they have a stake in the negotiation process, and they’re more likely to come to an agreement with you.
The key here is that the agreement will be something that works for the consumer and your agency. That way, any eventual “yeses” you get will be commitment yeses instead of counterfeit yeses. Read more about the different types of yeses here.
I like for my collectors to try to get 99 no’s a day. Often, collectors struggle to get that many no’s because with each “no” they get, the closer they are to a “yes.”
Now it’s your turn. Challenge yourself to get 99 no’s today. You’ll want to make sure you’re being empathetic on each call to make sure the consumer feels heard and understood. You’ll also want to make sure to negotiate from the top down, meaning you start out asking the consumer to pay higher amounts each month so the debt is paid off quicker.
Note: To get more “no’s,” you have to be comfortable hearing that word. Try to put your own feelings attached to the word aside and focus instead on finding an agreement that will work for your agency and the consumer.
Face Your Fears
I truly believe collectors are leaving a lot of money on the table because of their fears.
Did you know that when you feel negatively on a collection call, the consumer can typically sense those negative emotions?
Imagine this: You’re offering a high payment arrangement to a consumer because you’re following my signature top-down negotiation strategy. You feel uncomfortable asking for this much money, and the consumer senses that feeling.
Because the consumer can sense your own hesitations, he ends up giving you a counterfeit yes to end the uncomfortable phone call. The next thing you know, the next payment is missed.
How can we avoid this scenario and put the consumer on a payment arrangement that works for him? The truth is, we need to face our own fears. You can read more about the top collector fears here.
When you feel more confident in your offers to the consumer and you continue to remain empathetic during the entire call, the consumer is more likely to agree to a payment arrangement and follow through on it.
Note: When you trust the process and remain consistent on every call, you’ll avoid the uneasy feelings attached to negotiation that you may have.
Educate on Credit Reporting
Disclaimer: Make sure this aligns with your agency’s and the client’s specific policies. Only educate on credit reporting if you’re absolutely sure how to remain compliant while doing so.
During my years as a debt collector, I’ve learned that mentioning the credit report at least four times during a call will increase the chances that the consumer will pay.
Make sure not to promise to remove the account from the credit report; only use this as an education opportunity if the account has not been placed on the credit report yet.
A great way to mention the credit report is to ask the following question:
“Would you like to pay this account before the credit reporting date?”
A question like this is great because it doesn’t give the consumer a false impression, like you'll remove the account from their credit report, which can later be used against your agency.
Note: Make sure you practice this tip using roleplays or scripting cards.
Watch Your Ratios Improve
Missed payments aren’t uncommon, so utilizing tips like these will be essential as you build your collection skills and improve your emotional intelligence, communication, negotiation, and critical thinking. All of these skills are necessary to be a Level 10 Collector.
These tips typically work together in unison. You’ll likely have to use more than one on a collection call to make sure the consumer follows through on his promises to pay.
Want to learn more about increasing revenue and decreasing complaints through The Collection Advantage online training program? Book a free strategy call with me today.