Covering Business Credit Logo Home   About Us   Services   Credit Articles   Q&A   Contact  

  Business Communication  

Negotiating Technique
By Michael C. Dennis, MBA, CBF

Communication Articles
All Articles •  Home

Common mistakes

One way to improve your effectiveness in the field of credit and collection is to become a better negotiator. Successful negotiators not only know what they want and need to accomplish before beginning a negotiation, they are comfortable with the negotiation process. They are confident that they have accurate information about the status of the account, and that they understand their employer's expectations and requirements, and they are certain they know the limits of their authority to negotiate with the debtor. Becoming a better negotiator involves the skill and patience required to understand your customer's needs, and to look for solutions that are mutually beneficial.

One of the most common problems for collectors involves negotiating with someone who does not have the authority to make commitments on behalf of the debtor company. Not surprisingly, many debtors deliberately place collectors in contact with employees that have only limited authority and cannot make binding commitments. One important step is to understand your contact's authority to make payment commitments before beginning the negotiation process.

One of the most common mistakes - and one of the easiest to correct - involves making concessions too soon. Many collectors make one specific, very significant concession even before the discussion has begun. They make the mistake of not asking for payment in full of the entire past due balance. Many collectors establish artificial cut-offs on past due balances. Many collectors only ask about the status of invoices over fifteen days past due, or about the status of invoices even further past due in some cases. A related mistake in debt collection involves giving your past due customers the unsolicited concession of a grace period before contacting them. For example, many collectors routinely wait fifteen or longer before contacting a customer to request payment status on a past due balance. This concession benefits only the customer. The simple solution is to contact customers as soon as possible once invoices become delinquent.

Excerpted from the White Paper: "Fifty Ways to Become a More Effective Debt Collection Negotiator Starting Tomorrow."

Share |

Business Credit Articles
Send to a Friend
Ask A Credit Question
Questions & Answers
Business Credit News
Your Privacy
Site Map