You need to send an account to collections. It happens. Even the best customers sometimes run into trouble.
The entire process can be daunting, for both businesses and customers. You may worry you’ll place your relationship with the customer in jeopardy. You don’t have to. You can save your customer relationships by outsourcing collections.
It’s easy to see why customers don’t like collections. Those who have no intention of paying just ignore the debt collectors, often trying to skip town along with the bill. Those who do want to pay may find the entire situation very stressful. They may have already run into a rough patch and being put into collections only makes things worse.
This is especially true if you or the party you engage to handle your collections doesn’t handle the situation properly. Customers may come to resent you for bothering them about the bills. You may even find yourself on the wrong side of the law when it comes to collecting an overdue account, which won’t exactly endear you to a customer.
Why Worry about It?
Some business owners don’t believe they need to save the customer relationship. After all, there’s a reason the account went to collections: The customer wasn’t paying. Do you really want to continue doing business?
For most cases, the answer is yes! As mentioned, some customers have simply fallen on hard times. They have every intention of paying what they owe. They may already be worried about when and how they’ll be able to pay down their accounts. They might be worried about the interest accruing on their accounts or fear you’ll cut off their services. Eventually, they’ll right the situation and be able to pay you.
Some of these customers will only ever have this one infraction on their accounts. Some may go on to become bigger, better accounts for your business! And since it’s easier to retain a customer than it is to gain a new one, you should do all you can to preserve the relationship you’ve already built.
Why Outsourcing Works
Outsourcing collections can be the solution to the issue. One problem many companies bump into is their own limited experience with collections. You may be tempted to write the account off as bad debt rather than try to collect. If you do decide to send the account to collections, you may employ tactics that exacerbate the customer’s stress and fear.
Instead of struggling with the collections process on your own, frustrating both yourself and the customer, you can introduce an intermediary to moderate the situation.
When outsourcing collections, you send accounts to a team of highly trained experts who have experience working in collections. They can help you and your customers reach more positive resolutions about outstanding accounts. Overall, they can maintain the integrity of your brand during every interaction with the customer as you work to get the debt repaid.
Another thing you can access when you’re outsourcing collections is “white-label” or “third-party” collections services. In these scenarios, the outsourcer doesn’t identify they’re working on your behalf when they interact with the customer.
This allows the provider to operate more freely, employing different tactics than if they were working under your name and brand. This is usually reserved for more difficult accounts, including cases where the customer has seemingly skipped town along with the bill.
In this case, customer relations are saved by virtue of the distance between you and the outsourcer. In many ways, outsourcing collections can help save your customer relationships.