How to make debtors feel guilty (and how it can backfire)
Why do most of us pay our bills? Because we know it’s the right thing to do. If we didn’t do it we’d feel guilty. What about those who don’t pay their bills? Don’t they know this?
The chances are that they do know. What may surprise you though, is that many of your worst debtors probably consider themselves honest and honourable people. We’ve listened to debtors list their debts, talk about the fact that they’re not paying any of them, then maintain that they hate being in debt and they’re "not that sort of person." If you believe you’re the sort of person who pays their bills, but you know that you haven’t paid your bills (or some of them) you probably feel what psychologists call "dissonance".
Dissonance is the uncomfortable feeling we get when our actions do not match our beliefs. For our purposes, you can think of it as guilt. When someone feels this, they have two choices. They can change their actions. In the case of someone who is not paying their bills, this means paying. Or they can use one of the many mental techniques available to stop themselves feeling guilt.
- Avoidance. Often people are able to avoid the information that may create the feeling of guilt. Thus, smokers do not typically read anti-smoking literature, and debtors often do not read reminder notices because information that is discrepant with their actions is likely to create dissonance (which then leads to some mental work. Remember the path of least resistance? We do what is easiest for us, and reconciling cognitive dissonance is not always that easy!). This is called "selective exposure". Generally speaking, we look for information that confirms our views, but do not seek out information that might be contrary to our existing views.
- Denial. Many debtors will not only deny it to you, but also to themselves. They ignore it and sometimes it seems to go away (depending on how good they are at denial, and how poor the creditor is at collection).
- Think of enough good things to drown out the bad thing. "Ok, so I didn't pay this one on time, but look how many years I've been dealing with that company and this is the first time [ok, maybe a bit of denial of the other times going on here] that this has happened. Look how many other bills got paid. This is just one that I didn't manage to get to."
- Change the view. Some people call this "rationalising". "Well, its not like it’s a lot of money that I owe them, and anyway, I don’t like that creditor, and the person I spoke to was so rude, and the bill was wrong..." In other words, it’s not their fault and the creditor doesn’t deserve to be paid.
We do this mental work to reconcile their feeling that "I am a good person" (almost everyone thinks of himself or herself as a good person ) with the fact that "I didn't pay when I said I would". Often this is resolved by the logic "I am a good person. I had a good reason/excuse for not paying, therefore I am still a good person."
Guilt is a powerful weapon. In some cases you can use this weapon on your debtors. For example, most people will feel some guilt about breaking a promise. In some circumstances you will do better to let them off the hook, but in others you should make the debtor explain, so that he/she thinks twice before letting you down again.
- According to a note in the memo screen, you promised to pay this last week. [Pause.]
Often a debtor is genuinely caught between a rock and a hard place. He has creditors coming at him from all directions and the reason he couldn't pay you was that someone else was suddenly more pressing. But you want him to know, for future reference, that not paying you is the wrong option to choose because that lets him in for an awkward discussion if not something worse. If you want to turn the screws more viciously, a powerful sentence is:
- You said you would ... but you didn't.
Unfortunately, this can backfire on you. As we’ve said, if you make a person feel guilty about not paying, there are two obvious things he can do. One is to pay, and the other is to convince himself that he was actually right not to pay. This is a crucial point. You need to avoid going too far in making the customer feel guilty and you must give the debtor a way out.
We call this saving face and the most obvious examples are seen when dealing with Asian customers, but it applies to everyone.
Let’s have a look at an example. Michael says he will pay. You speak to him seven days later and see that he hasn't paid. You can:
| Action | Effect | Most likely outcome |
|---|---|---|
| Not mention the fact that he promised to pay | No guilt | Allows and probably encourages his behaviour |
| Say "I can see in the system that you were going to pay on the 22nd, but you haven't" | Creates guilt | Encourages him to "rationalise" not paying to reduce the guit |
| Say "when you rang on the 22nd you made an arrangement to pay the next day, but you haven't.. I know we all get busy sometimes and forget things. You really need to get this paid today. Do you have a credit card?" | Creates guilt and offers a way to reduce it | Encourages him to pay to reduce the guilt. (He forgot but everyone forgets sometimes and it’s not a problem as long as he pays today.) |
So in summary, we’re saying that guilt is often a good tool to use. Most people consider themselves "good people" and feel guilt when forced to face up to the fact that they haven’t done the right thing. However, there are lots of mental tricks we use to get over this guilt, and sometimes when someone makes us feel guilty, we convince ourselves that we were right not to pay. In the case of a debtor this can actually strengthen their decision not to pay.
The solution is to offer them a way out - save their face. Create the guilt but then immediately offer a way to reduce it, as in our example. This is a powerful practical credit management skill that all creditors - in fact everyone trying to persuade anyone to do anything - needs to understand.
This article first appeared in MG Business in September 2002.
About the author
Peter Hattaway of Hattaway & Associates (www.hattaways.com) is the guru of credit management in Australasia. He can be contacted at peter@hattaways.com