No Letters Please

Happy New Year! It was a fun holiday season, but it's time to take down the decorations and get back to work now. There's something about getting back to our routines that just feels right. I'm the type of person who needs that "fresh start" so I feel ready to take on new challenges. Maybe it's from living in Minnesota where we have 4 distinct seasons and fresh starts every 3-4 months.

As I look through all the letters and cards I received from friends far away during this season, I think about how nice it is to keep in touch with people--to say "hello", to let everyone know how you're doing, and to read about all the fabulous accomplishments of your friends' perfect children. So, what about beyond the holiday season? While most of us look forward to getting our mail during the holidays, we're not so eager to run to the mailbox in February or July. We've come to expect bills and junk mail the rest of the year. So, we become very blase' about written communications when we can't get excited about what's inside.

When people ask me about collection strategies, they're always so excited to show me their collection letters. Now, granted, most of these letters are bloated with too many pointless phrases like "thank you for your attention to this matter" and "you've been a valuable customer to us". Mostly, however, creditors are missing the point: letters aren't NEARLY as effective as telephone calls in getting companies to pay you; they should be used on an extremely limited basis.

People expect letters as part of their junk mail at work. If they're like me, they go through their inbox every few months to make sure there isn't something important they're missing. For most people, they tend to ignore letters--especially the collection kind. This is especially true if they have cash flow challenges. No one will necessarily see them tossing your letter into the garbage, but it's incredibly difficult to keep dodging those pesky collection calls.

So why don't creditors just make the calls? Many claim not to have the time (translation: deficient process, terrible technology or both). In reality, though, most just don't want to call. It's much easier to tell your boss that "the account has been worked" with a letter/email/fax than to pick up the phone and make the call. This is especially true if the collector doesn't deal well with rejection ("Now what? They don't want to pay!"). The letter strategy works much better for the customer not paying the bill than for the creditor trying to collect.

It's weird to walk through a credit department and not hear anyone making collection calls, but it's strangely common. Why are they there? What are they doing? Weren't they hired because the receivables are past due?

Whether your customers are small businesses, government, or larger companies, they'll respond much better to a live person on the phone asking for money than to some notice they can delete or toss. They've already mastered the "dump the junk mail into the recycle bin" at home in February and July--but they'll still hit the button to listen to those voicemails!