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How to Cultivate Better Relationships with Debtors

Posted by Credit Management Company on Sep 29, 2022

When individuals or businesses fall behind in payments, the situation often results in frustration and a breakdown in communication for both the debtor and the creditor. Falling on hard times or being unable to meet financial obligations is never a smooth process, but there are steps creditors can take to create better relationships with debtors. Building positive relationships, or at least productive ones, goes beyond the baseline step of following the Fair Debt Collection Practices Act (FDCPA).

At CMC, our decades of experience have led us to develop a proven process of building professional relationships with debtors on behalf of our clients. Our team is trained to represent your company with the highest possible customer service while driving collections results. Here are some ways you can build better relations and improve the odds of collection.

Personalize communications

No one likes to receive generic form letters or recorded voicemails with no personalization. These are likely to end up in the trash or ignored, respectively. Each person’s situation will be unique, and people are more likely to respond to collection requests if effort is put into personalizing their communications.

Personalization starts with simple steps like using the individual’s name in letters and during phone calls. When possible, have frontline staff leave personalized voicemail messages rather than reading from a script, and consider having collections personnel call personally rather than using an automated system. We can help with collections staffing and personalizing your communications to help improve results.


Create people-friendly statements

More than half the respondents in a medical billing survey reported they didn’t understand their bill and they weren’t sure if the amounts owed were correct. When there is confusion around invoicing, people are less likely to pay, and they may become adversarial when the account goes into collections. This sets up a lose-lose situation for the debtor and the creditor.

When you create statements that clearly lay out service charges and payment options, people can clearly connect the fees with the services they received. When people understand their account statements, McKinsey research has found more than 53% of people will be willing to work out a payment. Itemized invoicing and clear descriptions of services go a long way toward clarifying charges and improving payments.


Provide flexible payment options

When it comes time to make payments, give debtors enough payment options to make it easy. Overall consumer debt levels have grown more than 5% a year in the United States since 2020, and creditors can help people pay down that debt by providing flexible payment options like online payments and electronic bank transfers. This may require setting up an online payment system or working with a trusted third-party collections provider like CMC.

At CMC, we offer 24-7 online payment processing. This increases the speed of payment to you and makes it convenient for debtors to stay on top of what they owe. We can also help you establish payment plans that will work for both your bottom line and the debtor’s financial circumstances.


Compassionate customer service

At the end of the day, compassionate service is the foundation for improving relationships with debtors. Being behind on payments is frustrating for everyone involved and working together on a solution is the best way to get customers caught up while improving your company’s cash flow. Our team specializes in acknowledging the unique circumstances that cause a debtor to fall behind and working with them to get payment plans established.

In years past, third-party credit collections companies had a bad reputation when it came to customer relations. CMC has been a trusted bad debt collections partner for decades, and our success has been built on customer respect and achieving results. Contact us to find out how our team can help you build relationships that improve your collection rates.

Topics: Bad Debt, Best Practices