Effective collections is the lifeblood for any dealer engaged in dealer controlled financing. You’ve sold or leased the vehicles but you won’t realize the profits you made or produce the cash necessary to replenish the inventory or pay the bills until you collect on what is owed you.
Your sales people will talk with the customer regularly for a couple of days or maybe even weeks until the sale is made but from that point on the collector becomes the main point of contact with the large majority of these customers. Do you have the right people in that position knowing that how they handle your customers determines not only the success you will have in collecting your receivables but will also have a huge effect, positive or negative, on your ability to obtain repeat and referral business?
Success in collecting is dependent on hiring the right people for that position, providing proper training for legal and successful collections, and continually evaluating performance in order to help them succeed. The first part of this series of articles will look at hiring collectors and then part two will focus on evaluating and training.
How to Hire a Collector
When hiring collectors, use this nine-point check list. If the responses to at least five of the nine are acceptable, consider hiring that person. Later, help the collector develop the areas where they may be lacking. Here are the nine points to use to evaluate potential collectors:
- Hire a college graduate, whenever possible. Their degree should be in a subject requiring ability to handle the language effectively.
- Obtain past examples of resourcefulness. Ask the applicant to relate things he or she did a bit differently from the norm in the past to solve a problem.
- Ask for past examples of where he or she listened well, and then helped somebody.
- Request a few imaginative approaches (not necessarily correct) he or she would use to collect an account if you gave him/her a telephone call to make right now.
- Test his/her knowledge of policies and procedures involved in their previous occupation.
- Observe the enthusiasm and energy as he or she sells his/her talents during the interview.
- Solicit a quality answer to the question: “What would be your ambitions in our company?”
- Look for a bit of cockiness and braggadocio. These are good collector traits.
- Explain that collecting is a pressure job. Judge the quality of his/her answer to: “How well can you handle pressure?” Ask for examples of pressure situations where they think they performed well.
Profile of a Good Collector
As you go through the interview and hiring process, look for these eleven traits in your prospective collectors. Every candidate will not score highly on all eleven, but, if you find six or more, you should feel good about the abilities of that person. You should also use this list to evaluate your existing collectors.
The collector should be:
- EMPATHETIC… Your collectors should understand and be sensitive to the debtor’s position but they should still be able to move for “payment in full today.”
- IMAGINATIVE… The effective collector constantly develops better-than-average collection approaches.
- RESOURCEFUL… A good collector has the ability to review a file quickly, yet completely then locate the meaningful points on which to concentrate to resolve the issues causing the delinquency.
- INTELLIGENT… Collectors must be able to quickly and completely absorbs training in policies and procedures and adhere to those policies continually.
- ELOQUENT… An effective collector commands the language. They must be able to communicate effectively and, when talking, makes very few mistakes in grammar.
- ENERGETIC… A top-notch collector moves quickly and with purpose throughout the day, even in the last hour of the day.
- AMBITIOUS… The successful collector desires and expects promotions, at reasonable intervals, when their performance is above average and they have earned it.
- COCKY…A first-class collector is confident and assertive. They are driven to dominate, but do so without arrogance.
- ENTHUSIASTIC… Superior collectors love to collect, to “get on a telephone roll.” They regularly brag about their ability to collect.
- RESULTS ORIENTED… The skillful collector consistently collects more dollars than the average Collector, consistently makes more than average number of phone calls per day and consistently makes more than the average number of debtor contacts per day.
- CONTROLLED… Effective collectors thrive on pressure, or, at least, are not overly bothered by pressure. They are able to control their emotions and remain focused on the task of collecting.
Again, it is highly unlikely that you will find candidates for your collector positions that score highly in all 9 of the hiring checklist or possess all 11 of the traits of a successful collector. Choose those candidates with the highest number of positive scores on these two lists and you will be well on your way to assembling a strong collections team.
In his article “The Twenty-One Traits of a High Performance Business Culture”, Dave Anderson lists as #1:
“1. High performance business cultures make it extremely difficult to be hired. They consider hiring as an elimination process, not an exercise in inclusivity.”
Don’t settle for average. Collectors speak with your customers every day. Make sure the people you hire are capable of representing your business they way you want it represented, following your collection policies and the law and maintaining high standards of ethics, morality and courtesy while collecting the cash that is the lifeblood of your dealership.
As published in Used Car Dealer magazine.
