Factoids

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We are in the "Rental" business, not the "Repossession" business.

Anyone can pick up merchandise, but it takes a true professional to develop a relationship

Treat all customers as individuals

Verify customers pay cycles

The telephone is the single most powerful tool you have

The Pop allows the customer make a commitment

Customers know they are late and want to pay on time even if they can't

Many a good customer has been lost by what is viewed by them as harassment, but is actually bad record keeping

Never forget that the first objective is to gain commitments or collect rent

When speaking to the customer, remember, you are in their home

Notes should be professional and to the point

Safeguard your valued customers privacy

Don't make speeches

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Collection procedures in the RTO industry vary from one extreme to the other. On one end of the spectrum is the "sit and hope they pay" approach, on the other is the "after hours stakeout". The "sit and hope" approach won’t work, and the "stakeout" may get you fired, sued, and possibly prosecuted. Luckily there is middle ground that can be both effective and ethical.

Objective
As in all things, it is important to remember your objective.....the reason you exist....to COLLECT RENT! We are in the "Rental" business, not the "Repossession" business. Nobody ever made money picking up agreements. A pick-up may eventually be necessary, but your objective MUST be to collect rent. If you doubt this, ask yourself, "When is the last time I won an award for total number of agreements picked up in a single month"?

Anyone can pick up merchandise, but it takes a true professional to develop a relationship with a customer that puts you first, on what is a very long list of bills to pay.

Know Your Customer
All RTO's have policies and procedures regarding late accounts. But you as the Store/Account Manager must not fall into what I call the "Math Trap". It's Friday noon, my boss wants me to close at 95% collected...so I'll pick up just enough customers to make goal. If this is your current practice, you are violating the golden  rule in building relationships with customers

"Treat all customers as individuals"

Goals are necessary and procedures should be followed, but not at the expense of knowing each and every customers payment history, habits, and hang-ups. Before you make any attempt to contact a customer regarding payment...

• Take the time to look up payment histories. Has this customer ever been this late before? If so, did they pay?
• Look up this customers old accounts. How long did the agreement last? Why were they picked up? How late was the account when it was terminated? 
• Ask other employees about the customer. Do they tend to honor their commitments? What type of contact is most effective (phone ,postcard, door hanger etc)?
• Have they responded positively to contact in the past?

Once you know the customer, then and only then, should you make contact.

Contact
There are four methods of contact for gaining commitments to pay. 

1. In store
2. Phone
3. Mail
4. House call

In Store contact
This is the most effective, least confrontational, and least expensive way to get commitments. A person taking a late payment in the store should perform the following. (With a big smile:))

• Circle the "Next Due" date on the receipt.
• Remind customer of next due.
• Ask "Will you be in on Friday"?
• Ask if there is another due day/date more convenient.
• Ask if they are still paid weekly/biweekly/semimonthly/monthly.

Customers may change jobs and pay cycles. They may be late because their due date no longer matches their pay cycle. NOTE: Many customers confuse bi-weekly and semi-monthly. If a customer tells you they get paid every other week, don't assume that means every other Friday. I have seen double digit increases in percent collected by simply verifying customers pay cycles.

Phone Contact
We in the RTO industry should all light a candle for Mr. Bell. The telephone is the single most powerful tool you have. It's effective, inexpensive, and relatively non-confrontational.

Steps to an effective collection call

Greeting: "Mr. Smith, this is Gary from Rental Land, how are you doing today"? Pause for response.

"I'm calling to discuss your account that was due on the 15th". Pause...

This pause is what we call the "Pop". I'm not sure of the origin of the word, but it means making a statement ie: "....calling about your account", then waiting for the customer to make the next move. There is something about dead air on a phone that forces people to speak. In most cases, the customer will respond with a commitment to pay on a certain date...and if you noticed, the words "Late" and "Payment" never crossed your lips. The Pop allows the customer make a commitment rather than prying one from them. Customers know they are late and want to pay on time even if they can't.

If the customer doesn't respond with a commitment, Pop them again "I wanted to make sure we have the right due dates" Pause....At this point in the call most customers will have committed. Keep good records and DO NOT contact this customer again unless he/she breaks the commitment. Many a good customer has been lost by what is viewed by them as harassment, but is actually bad record keeping.

Mail contact
Post cards are the most common form of "reminder mail". However...some states strictly regulate written correspondence regarding payments. Never send mail until you review your states regulations. While mail may work well for some customers, it is a poor way to gain a commitment. It is slow, time consuming, relatively expensive, and typically arrives with a stack of other bills. It does nothing to "set you apart" from all the others looking to get paid. I would recommend mail only for "long distance" monthly customers who don't have a phone, or, are close to payout. This allows you to also send a coupon for Re-Up.

House Call
The dreaded "Run List". It takes a special human to turn a "run" (house call) into a positive experience. The person in your organization that Runs must have the patience of a Saint, the personality of Dale Carnegie, and the constitution of a Missouri Mule. 

He/She must not have an angry bone in their body. They must be able to function calmly and rationally in the most tense situations. They must be persistent and not prone to rash decisions. And most importantly, they must Never, Never forget that the first objective is to gain commitments or collect rent, not re-possess.

Things to remember when Running customers
While different procedures are necessary for customers refusing to respond to any contact, the following steps are both effective and respectful of your customers who don't have phones, or have broken commitments.

• Don't sneak. Park in front and walk calmly to the door.
• Have any notes or door hangers prepared before you arrive at the house. This will decrease your "time over target" and minimize any embarrassment for the customer. Your goal is to collect rent, not embarrass or humiliate.
• If a child answers the door, ask if a parent is home. If no adult is in the house, leave immediately.
• If the customer doesn't answer, leave a note. It should be sealed and in language that does not offend. The note should be professional and to the point. (No scrap paper) It should contain the reason for the visit, the past due amount, and a number to call to make arrangements. 
• If a door hanger is used, it should be turned so that the print is hidden or sealed in some fashion to safeguard your valued customers privacy.
• When speaking to the customer, remember, you are in their home. Be respectful but firm. Maintain eye contact. Use the Pop..."Mr. Jones I'm here to remind you about your account". Pause until the customer makes the next statement. This will, in most cases, be a commitment to pay.
• Once a commitment is gained, smile, thank them for their commitment, and leave immediately.
• Don't make speeches. The customer is already on guard, and the situation will only deteriorate if you extend your stay.

Summary

• Key points in collections
  • We are in the "Rental" business, not the "Repossession" business.
  • Anyone can pick up merchandise, but it takes a true professional to develop a relationship
  • Treat all customers as individuals
  • Verify customers pay cycles
  • The telephone is the single most powerful tool you have
  • The Pop allows the customer make a commitment
  • Customers know they are late and want to pay on time even if they can't
  • Many a good customer has been lost by what is viewed by them as harassment, but is actually bad record keeping
  • Never forget that the first objective is to gain commitments or collect rent
  • When speaking to the customer, remember, you are in their home
  • Notes should be professional and to the point
  • Safeguard your valued customers privacy
  • Don't make speeches