By: Shawn Sparks (bio)
Gen-X of RTO

Somewhere in your store, there should be a banner that reads "It's the relationship stupid!"

Never tolerate the judging of a customer based solely on the past due list in which they reside. To make judgments without regard for history is foolhardy. All too many associates take the easy way out and assume that since Mr. Smith is 30 days non-renewed he must be a bad customer. 

The attitude that a past-due-list, which is at best a snapshot, is a reliable indicator of an individuals overall value as a customer is RTO version of intellectual laziness.

Every Relationship is Unique
Each customer has a different set of issues and a unique history with your company. It is our job as "consultants" not collectors to find out why they're not renewing in a timely manner, not just react when they don't. The traditional view is that this customer has entered the 'forbidden land of delinquency' and can never be washed of their sins, right...Wrong!

I believe that fewer than 1% of customers enter into a rental agreement with the intention of not renewing. If a customer does not renew, there is a reason. It is our job to find out why.

So, the next time you review your lists with fresh-from-training RTO warriors convinced that 7 days past due is 7 days past due regardless of the circumstances...here are a few things to consider.

1. Have they made the last 6 payments on time and now they're late? A quick glance at the merchandise may be the answer. If its an electronic device or an appliance, perhaps they are unhappy with the performance, or they have a service problem and, based on an experience with another RTO company, assume you won't take care of the problem. You'll never know unless you ask.

2. Are they having temporary financial difficulty? Are they too proud to ask for an extension even though they may be entitled to one according to the agreement? Understanding their problem can make a customer for life.
 

3. How long have they been a customer? Have the failed to renew before? Will pick-up, if it comes to that, be a problem?

Your greatest ally in collections is not the persistent calls, the myriad of letters that in our paper arsenal, or even a super hard knock at the door. It's the "relationship". Without it, your customers really do become numbers, and I promise you, they will not be the numbers you want.