Debt collection is a crucial function for any institution, including SMEs, microfinance institutions, Saccos, and banking institutions. Negotiation skills are essential for debt collectors to recover outstanding debts, maintain good relationships with clients, and protect the institution’s financial stability.
Here are five key negotiation techniques that can help new staff recruits collect more in debt collection:
Active listening – Paying close attention to what the debtor is saying and seeking to understand their perspective. Use open-ended questions to encourage the debtor to share their circumstances and difficulties.
Empathy – Putting oneself in the debtor’s shoes and trying to understand their emotions, thoughts, and feelings. Show empathy, acknowledge the debtor’s situation, and offer support.
Clarity – Being clear and specific about the terms of repayment, consequences of non-payment, and available options. Use simple and understandable language that does not confuse or intimidate the debtor.
Flexibility – Being open to alternative solutions that meet the debtor’s needs and the institution’s objectives. Explore different options and find a win-win situation that benefits both parties.
Persistence – Maintaining contact with the debtor, following up on promises and commitments, and being persistent in finding a solution. Maintain a positive and professional attitude, even in the face of resistance or obstacles.
By using these negotiation techniques, debt collectors can recover more outstanding debts, maintain good relationships with clients, and protect the institution’s financial stability. Effective negotiation skills are essential for the success of any financial institution’s debt collection efforts.