I am excited to share that I was interviewed by CNN Money this week and they have written a story on their website called “Confessions of former debt collectors -These people share their experiences in the collections industry — and why they left.”
They have profiled 10 former bill collectors – check it out and let me know your thoughts!
Collection agencies assist businesses and sometimes consumers in collecting money owed to them by their customers, tenants, or clients. All while encouraging a continuing relationship, though this does not happen often.
This usually entails mail and telephone correspondence as the primary tools for reaching delinquent customers. Home based collection services have a distinct advantage in serving small businesses, particularly healthcare providers. Many large firms simply do not try to collect on smaller debts because it means less commission for the work and more time spent to make a small amount of money. However, home based collection agencies that specialize in small debts or do collections for small businesses are often successful.
Michelle,
What would you say are the biggest downfalls for small collection agencies? What do most agencies lack for them to prosper? – Thank you, Teresa
Teresa,
I would say the biggest downfall for any collection agency is not being educated or trained or the collectors not being educated or trained in the art of debt collection, mediation, negotiation and debt collection laws. Another big downfall is collectors or agency owners who don’t have experience or not being prepared to deal with everything a bill collector has to deal with. Preparation, training, education and follow up are key.
A big downfall for agency owners is not having a business or marketing plan. Once an agency is up and running you need some direction to stay on track along with everything else that is required of you. You need to follow your marketing plan in order to get and keep clients and to grow your agency.
Many collection agencies flounder because of a lack of organizational skills, communication skills, and collection skills. It can also be due to a lack of marketing skills or customer service to keep and get new clients.
Michelle Dunn, author of Starting a Collection Agency, how to make money collecting money, available at http://www.michelledunn.com/shop/catalog.php
http://www.Credit-and-Collections.com
I recently did an experiment with some agency owners and collectors called “A Day in the Life of a Bill Collector” and this is just a taste of what some bill collectors may do in a typical day:
a. Review their “tickler file” or listing of accounts that need to be followed up with or contacted on that particular day.
b. Return all calls left on answering service by debtors & clients.
c. Go through postal mail for payments, post them to accounts, send out thank you for your payment letters and deposit checks.
d. Start making collection calls.
e. Process any dunning (collection) letters that need to be sent out that day.
f. Deal with answering the phone and questions from clients and debtors.
Michelle, We are getting ready to roll out a B2B Collection agency and have some questions:
Do we need any licensing if no consumer collections?
Yes, if the state you are in or the states you are collecting in require it.
Do we need to be bonded if doing B2B collections or only if a client wants it?
You will need to be bonded if the state requires it.
Do you have an example agency agreement we could use?
I have some in my book, The First book of Effective Collection Agency Letters & Forms, there may also be some available online but make sure to have it looked at by an attorney.
The most effective way to get paid on late accounts is to personally visit the consumer, at work, the coffee shop, anywhere you know they will be.
The next most effective way to get paid is with phone calls and the least (but still effective!) way to get paid is with letters.
Let your clients know how much you appreciate them using your agency for their collection work. During these rough times, clients are having a hard time staying in business, as well as agencies, but you need to let your clients know you appreciate them sticking with you.
Send them a letter of thanks, and it will be MUCH appreciated. An example:
(On your letterhead)
It gives us great pleasure to send you this letter of thanks in recognition of your patronage. We feel fortunate to have loyal customers like you.
Business relationships are built on mutual benefit and satisfaction. We sincerely hope your dealings with us have been satisfactory and beneficial in every way. We hope we can continue to merit your confidence, and will earnestly strive to do so.
Permit us to wish you and your company continues success and progress in the years to come.
People ask me every day, “How many accounts can one collector work in a day?”
Well, this depends on many things, such as the experience the collector has had, the training they have had (if any!), how well they do their job, what kind of debt collection software is being used, and what kind of a phone system you have.
Start with a lower amount of accounts and see how a collector does, if they can collect 50 accounts easily and have time to goof off, add 10 more or 5 more, and go from there. Add more as they do well. If your request is unrealistic or unreasonable, obviously the collector will not do as well, will become frustrated and stressed and productivity will suffer.
More and more of us are losing our jobs every day, what can you do to ensure you are not on the list to be let go?
How can you keep good collectors motivated and happy doing a job that is not always a happy, stressfree job?
Some tips to keep your collectors enthused and motivated about their jobs:
How do you keep employees happy?