Brian, CMCT
influencepeople
influencepeople
Helping You Learn to Hear “Yes”.
Secrets of an Aussie Debt Collector
A Cialdini Method Certified Trainer® - Helping You Learn to Hear "Yes".
Monday, October 3, 2011
Influencers from Around the World: Secrets of an Aussie Debt Collector
Secrets of an Aussie Debt Collector
This comment resonated with me because I immediately thought of the complex influence problems we encounter. I thought the most difficult situations often involve a target of influence who believes they can't say YES or simply won't say YES.
I probed further into the world of our debt collector and found that he not only ran a very successful business but the more he spoke, the more it became obvious he was intuitively employing all of Dr. Robert Cialdini's principles of influence in some way.
Of note: Dr. Cialdini originally discovered these principles by watching those masters of influence in a covert manner and then reverse engineered their strategies and validated them through research. Just as Cialdini had done, I quickly realized I was in the presence of an artisan; someone who was effectively employing Abraham Maslow's fourth stage of learning, unconscious competence. Influence was a part of this guy; he just did it and was successful because of it. We arranged to meet to discuss this further and below are the secrets of a very successful debt collector.
Those who can't pay
We started off agreeing that those who were happy to pay never made it onto his books so we would commence with those who believe they can't pay.
Our debt collector (DC) started by saying the introduction to the phone call is critical. He had to be “firm but fair.” DC commences by introducing himself by title and appropriately demonstrating his knowledge in the field. He knows that if he is to influence those who believe they can't pay he has to get their side of the story in order to understand what happened and, if possible, why. Going too hard will shut them down and that's not to anyone's advantage. With the introduction over he commences by getting their side of the debt story and uses this context to start to work through strategies to see how they can start to pay. DC highlights to the debtor that even small amounts are okay and reassures them that others don't have to know about this situation. This second element is critical because for many “saving face” is integral to the process.
DC says that truthfully telling the debtor that “others have told him that they begin to feel better once they start” often opens the door to further discussions. He stated he highlights that this simple step will also stave off any legal proceedings and will give the debtor time to work through the problem in many respects under their own terms.
DC said that while working through options he avoids putting debtors in a position in which they feel they have to say "No”. Once a pathway is identified he gets the debtor to voluntarily commit to a repayment start date and to outline how they will go about making that first payment and the subsequent payments after that.
What DC has found is those who can't pay are far more receptive after providing their side of the story. This also allows a time and space for him to outline the various consequences and to highlight the options they have open to them. Of course DC said he always finishes by commenting on what the debtor honestly stands to lose by not going down this path, including the widespread attention that is often drawn to public hearings like this. He’d added his approach is unlike many in his industry and his staff is recruited because of their ability to engage with and talk to people, not just make demands and threats upfront.
During our conversation I was able to quickly note where DC was intuitively using the principles. They were:
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Introduce himself with the title of debt collector.
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Engage in a very different way to what people expect thus allowing for the contrast to be drawn to other debt collectors and even the debt recovery efforts of the initial service provider.
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Providing debtors the opportunity to tell their side of the story and allowing them to do so.
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Allowing debtors to make their own choices with one alternatively ensuring confidentiality.
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Providing flexibility in repayment options and terms.
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Cooperating with the debtor to find solutions allowing for payment rather than making demands.
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Genuinely looking at the situation from the debtor's perspective and letting them know that it was not DC's job to make this any harder but to in fact help them resolve it without causing further hardship.
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By highlighting that others like them have felt better once they commence the payment plan.
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Introducing himself by title and organization and quickly explaining the role.
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Demonstrating knowledge of options and legislation in the introduction
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Carefully ensuring the debtor doesn't commit to “No” in the early stages thereby taking a stand not to pay.
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Getting the debtor to voluntarily commit to a payment plan with a start date and method of payment of their choosing.
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Highlight what they stand to lose by this becoming public or by going to court.
Those who won't pay
DC informed me that as far as those who won't pay, it’s more a situation in which they often have the capacity to pay, but felt wronged in some way. This could mean they didn't receive the service or goods they initially paid for or they weren't told the whole truth about the product and/or service initially. With this history of the service provider under-delivering or failing to deliver, often the debtor has not and will not take proactive steps to repay the debt. In many instances the debtor is happy for the matter to come to a head, such as to go to court, so they have a viable platform to vent their disapproval and highlight the injustice they feel has been perpetrated against them.
At the other end of
this continuum however are those that have learned that if they don't pay the debt there is a strong chance in the settlement phase the service provider or debt collector will discount the debt in some way to get the debt cleared. Alternatively, if they go to court there is a chance they will have the debt admonished. Either way, by holding out, they “win.”
DC told me that once he identifies someone in the “won't pay” group he doesn't waste any further effort and simply serves a summons on them and commences legal action. DC said he does this because history tells him that if they won't pay they either want their day in court, in which case he gives it to them, or they want to stall on the smallest detail and/or amount to ensure they “win.” Neither of these is worth DC's time to engage in this lengthy and often non-productive interaction.
DC then stated that in his business only 3-5% of his cases progress by way of summons to court proceedings and almost 100% of this group were from the “won't pay” sector. Knowing this allows DC to recognize that for 95-97% of his cases, if he or his staff invest time in the debtor and create an environment in which they can work together they will usually get a positive result. The contrast here to others in the industry is evident in that the stereotype suggests that the debt collector will stand-over, threaten or coerce the debtor, making them feel they “have to” repay the debt today and building resentment or resistance.
DC further backed this up with some more statistics saying that when he expanded his business from Australia to New Zealand, by using this approach he was able to immediately achieve a 50% payment of debt level whereas the previous provider could only achieve a 22% repayment rate.
Implications
In any influence situation we deal with three types of people:
1. Those who are willing to entertain our messages/requests/proposals, or at least willing to engage with us and provide an opportunity to influence them.
2. Those who reject our messages/requests/proposals because while they may be able to be influenced, they feel they are not in a position to be influenced, i.e., because of organizational structure, financial constraints, perceived conflict of interest and so on.
3. Those who reject our messages/requests/proposals because they choose not be influenced. Whether it is because the outcome may challenge their status or expertise, they may feel wronged in some way and are reacting against us, or they have surrounded themselves with barriers or obstacles so you can't actually get to them to influence them.
It is important in any influence situation to do your homework and know as much as you can about the target of influence. In DC's case this is done partly before picking up the phone and partly while on the phone. What DC shows us though is even for those who think they can't do something, by working with them, doing the small things well, you allow the opportunity for things to at least be considered and influence to come to play. Occasionally the person we are influencing may ultimately not be able to say YES but they will know the person who can.
For those who won't be influenced because of choice, culture or organization design, you as the agent of influence need to reflect on the time and effort that will be required to break through the barriers and to ask yourself can you spend your influence efforts better elsewhere. If you engage with someone else, whether it is a competitor, a colleague of theirs or even one of their own influencers and they don't have a seat at the table, scarcity is a great motivator.
Anthony McLean, CMCT
newintelligence
Changing the way people think
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