Empathising with your debtors
Have you ever been in casual conversation with someone and suddenly they pour their heart out to you. "How's your week been?" I asked recently of someone I'd just met. I got a blow-by-blow reconstruction of a major life crisis that had commenced on Monday.
So what do you say to such an outpouring?
"My God, you've had an awful week!" I said. When someone is telling you about their life falling apart, you don't just say, "I'm sorry to hear that." You need to show them that you understand. "Empathy" is the fancy term for it. That can be done by simply paraphrasing or summarising what you've been told, or by summarising the emotion they are feeling. In this case, of course, it didn't require great insight to understand how he felt about the events of the week.
Everyone wants to be understood. When someone starts telling their tale of woe to a stranger, clearly he has things he needs to say. He needs to "get it off his chest." That in itself can be a great relief. But more than that, he wants to be understood. (In fact, everyone wants to be understood.) When he saw that I understood that he was gutted by the events of the week, we established some rapport.
The definitions of rapport generally talk about understanding and trust. With understanding and trust you have the potential to have a meaningful conversation from which positive results can flow.
Malcolm Gladwell, in his book, Blink1 , tells a story of Bob Golcomb, a very, very successful car salesman, who showed him a binder of letters from satisfied customers.
As he flipped through the book he pointed randomly at a short typewritten letter. "Saturday afternoon, late November 1992. A couple. They came in with this glazed look on their faces. I said, 'folks, have you been shopping for cars all day?' They said yes. No one had taken them seriously. I ended up selling them a car ..."
No doubt there were many factors to the successful sale, but I'm certain that one them was the fact that this salesman appeared, instantly, to understand them. Primal empathy, is one phrase that is used to describe the ability to be able to instantly judge people's emotions. In the amygdala - the part of your brain that triggers the fight or flight response - we instantly feel what's going on, from the look on someone's face or the tone of their voice, rather than thinking about it and working it out. Although it's not a mindful process, this is something that those who study people find improves with practice. This is what allowed Bob Golcomb to identify the "glazed look" of weariness and disappointment on the face of the would-be car buyers.
A related skill is empathic accuracy - a conscious understanding of another person's feelings. So Golcomb had recognised a glazed look, but what had caused it? He guessed (rightly) that they'd spent the day talking to car salesmen. They established rapport, he identified their quite specific need and shipped in a car which met that need.
How does this apply to collecting money? Well, when you call an overdue customer, their tone of voice and the things they say will tell you things about the person you are talking to. You have to assess their mood and attitude - defensive, blasé, insincere, stressed, etc, etc - and adjust your approach to deal with that.
You also have to try to form an opinion about reasons. If they are stressed, is it because they are frantically busy, because their business is failing, because the traffic on the way to work was terrible, or some other reason?
You build a theory about what's going on, then you test it. "Are you having a busy day?" If you can show you understand, you build rapport.
One construction company owner who we interviewed about his creditors gave this example of a collector who was particularly effective. The company ultimately failed.
"There was one gentleman who was very effective with his job and basically said, I know what's happening, I've had a few friends in the building trade that have gone down this path as well but we need to get this arrangement in place and basically I can't leave the conversation with no arrangement in place ... I can't remember how much we arranged to pay but we arranged to pay something and he was quite good. He kept ringing us every 3 or 4 weeks just to check up that we were paying and whether we could afford to pay a little bit more." (Emphasis added.)
Unlike many other businesses which deal with many customers, and therefore spread their risk, a construction business will often be working on a relatively small number of building projects. One or two customers who for some other reason fail to pay may spell disaster. The company runs out of cash and faces lots of irate phone calls from creditors such as subcontractors who are also facing disaster if they're not paid.
However, the key was perhaps not so much the fact that the effective collector understood this process as the fact that he said he had friends who had had the same sort of problems. We know from our interview that some creditors were very abusive and bitter. In some cases he dug his toes in and made a point of not paying them. The effective collector, however, "had a few friends in the building trade that have gone down this path." His words implied that he understood that this wasn't what the owner had intended; a failing business didn't make him a bad person. Many other creditors assumed the opposite.
The French have a saying, tout comprendre c'est tout pardoner; to understand all is to forgive all. We're not talking about forgiving people's debts, but rather understanding their position. If you can understand why they still feel they're a good person, you may well end up getting paid where others miss out.
It's easy for creditors to assume that many of their problem debtors are ratbags who don't want to pay. Remember that almost everyone thinks they are basically a good person. If you can understand them and build some rapport, you may be able to find a solution. If you assume someone is a ratbag, they will tend to act like one.
Peter Hattaway - www.hattaways.com - is a director of Hattaways, specialists in credit management training and consulting.
1Penguin Books, London, 2006