Practical tips for making dunning calls

Telephone calls, letters, door-to-door visits, litigation and arbitration are the four basic ways to collect overdue loans. Among them, telephone collection is the most commonly used collection method, especially the first collection after a customer is overdue is often over the phone. For collection. The first collection call is crucial, and whether it is effective or not will set the tone for the entire collection. The first collection call is really, very, very important (say important things three times). How should you make the first collection call? What points should you pay attention to? Here are the practical words I have compiled for you on how to make a collection call. Technique, hope it is useful to everyone. 1. Let’s first discuss a few basic issues (1) Repayment willingness and repayment ability

The customer’s normal repayment depends on two factors. The borrower has the repayment willingness and repayment ability, among which repayment Willingness is a subjective factor, while repayment ability is an objective factor. If a borrower fails to repay on time, there is either a problem with his willingness, his ability, or both.

Overdue collection is similar to medical treatment. If the customer fails to repay the loan on time, it means that the customer is sick. There may be a problem with his will or his ability. If you want the customer to repay the loan, you need to clarify the crux of the problem and prescribe the right medicine. If there is a problem with willingness, we will treat the will. If there is a problem with the ability, we will treat the ability. Only by prescribing the right medicine can the disease be cured. From the perspective of disease treatment, in terms of overdue management, credit institutions should focus on prevention. The story of the three Bian Que brothers also illustrates this point. The cost of prevention is the lowest, and the highest state of overdue management is debt-free. Can be discussed. The client is overdue and needs treatment as soon as possible. The earlier the treatment, the better the effect. When the cancer is in the advanced stage, there will be no hope of recovery.

In the article "How Small Loan Companies Evaluate Borrowers' Repayment Ability" (see the second article in this issue for details), the author divides repayment willingness into proactive repayment willingness and passive repayment willingness. There are two types of repayment willingness. Among them, active repayment willingness depends on the borrower's character and morality, and passive repayment willingness depends on the borrower's default cost. Customers who are proactive and willing to repay will generally show the following characteristics: the borrower has a good willingness to repay, and has never thought about defaulting on the debt. Overdue is not a subjective intention, but an objective failure to repay; even if there is a problem with the repayment ability, Borrowers will also actively work hard to find solutions; customers who are proactive and willing to repay will have a higher degree of cooperation, will actively cooperate with investigations and provide information, and will not lie to us or make false statements; customers who are proactive and willing to repay will Strong customers will be brave and willing to make promises, and will actively fulfill their promises. The proactive willingness to repay is mainly determined by the borrower's character and morality. The passive willingness to repay is mainly determined by the default costs faced by the borrower. The author has discussed this in detail in the article "Understanding Default Costs and Default Rates in One Article!" (see the third article in this issue). Default costs are the economic and non-economic losses faced by borrowers due to default. The higher the borrower's default costs, the stronger the borrower's willingness to repay in the future and the lower the default rate. Assessing and improving borrowers' default costs is key to reducing default rates.

When there is a problem with the borrower's willingness to repay, you can only change the borrower's willingness to get the customer to repay proactively. Generally, we focus on negotiation first, with the main purpose being to improve the borrower's proactive repayment attitude. Willingness to repay, that is, the soft ones come first. If the soft ones fail, we have to take measures to make them feel the pressure. Only in this way can we effectively improve the borrower's passive willingness to repay. There is a Chinese idiom called "Apply both soft and hard measures", which is very vivid. Got this.

If you want to change the borrower's willingness to repay, the lender needs to use both hard and soft tactics. If negotiation fails, you must gradually increase the level of pressure. Negotiation will be the main focus in the early stage, and pressure will be the main focus in the later stage (even if the first time Collection is mainly based on negotiation and will also put a certain amount of pressure on customers, but the level of pressure is relatively low). From the perspective of exerting pressure, when the stage of exerting pressure is the main one, there is a basic criterion for judging whether the method you adopt is appropriate, that is, you must gradually increase the level of pressure. If the other party feels greater pressure than the last time, you should not go. This is a failed pursuit. So what we need to think about is what method can be used to make borrowers feel more pressure than last time. If the pressure does not increase, the passive willingness to repay will not increase.

(2) Regarding default costs

The so-called default costs refer to the price that borrowers need to pay for their breach of contract. Traditional credit theory does not pay enough attention to the impact of default costs on repayment willingness. Once a small loan company issues a loan to a borrower, as a "rational person", the borrower will weigh the consequences of repaying or not repaying. If the benefits of default are greater than the benefits of keeping the promise, the borrower will choose to refuse to repay the loan ( strategic default). But if the cost of breach of contract is greater than the benefit of complying with the contract, as a "rational person", the borrower will naturally have enough willingness to repay and will make the choice to repay on schedule. The borrower's default costs are not just monetary losses. Generally speaking, the borrower's default costs include the following aspects:

1. Additional burden

If the borrower To repay the loan on time, you only need to pay the principal and interest normally. Once the borrower defaults, the borrower needs to pay the corresponding liquidated damages or penalty interest according to the contract. If the lender sues, the borrower will also need to bear legal fees and Attorney fees (the burden of attorney fees needs to be stipulated in the contract, and some other conditions need to be met) and other expenses. These additional burdens are the cost of the borrower's default.

2. Operations will be affected

Once a borrower defaults, the lender will often resort to non-litigation or litigation in the process of recovering from the borrower. impact on operations, which is also the cost incurred by a borrower's default.

3. Small loan companies may lower the borrower’s rating or refuse to grant credit

Once a borrower defaults, the small loan company may lower the borrower’s rating or refuse to grant credit, which is very detrimental to the borrower. , the good cooperative relationship accumulated in the early stage is destroyed, which is also the default cost of the borrower.

4. Family life is affected

Once the borrower defaults, the small loan company’s pursuit of debt from the borrower will inevitably affect the borrower’s family life, or even cause the borrower to borrow money. The quality of life of a person is reduced, and in serious cases, the entire family of the borrower can be thrown into chaos.

5. Social reputation and evaluation are significantly affected

A person’s social reputation and evaluation are his important intangible assets. Once the borrower defaults, his failure to repay the money will inevitably It will lead to the reduction of its social reputation and evaluation.

6. Negative credit record

Nowadays, small loan companies in some provinces in China have been connected to the Bank of China credit system. Once the borrower’s default behavior is included in his credit record , with the gradual improvement of our country's credit system, borrowers' bad credit records will have an increasing impact on their lives.

Generally speaking, borrowers’ default costs are mainly concentrated in two aspects: family factors and business factors.

In terms of family factors, generally speaking, the cost of default is higher for those who are married than those who are single or divorced, those who are widowed, those who have children than those without children, and those who have a house and assets than those who do not have a house or assets. The default cost of borrowers is high, the default cost of locals is higher than that of non-locals, the default cost of borrowers with higher social reputation and evaluation is higher, the default cost of spouses and parents with higher social status is higher, etc.

As far as business factors are concerned: the longer the operating period, the higher the default cost, the longer the business location, the higher the default cost, the more important repeat customers are, the higher the default cost, and the more difficult it is to change the business location, the higher the default cost. High. The greater the negative impact of changing the business location on the business, the higher the default cost. The better the profitability, the higher the default cost. (3) Basic principles of overdue collection

In the process of recovery, credit institutions must follow the four basic principles of timeliness, gradualness, classification, and recording.

The so-called promptness means that creditors should take quick action, not wait unprincipled, and must contact the customer within the first 24 hours. The author believes that the most important thing in overdue collection is speed. Credit institutions must act quickly before falling into deep losses!! Remember!! Act quickly!! Your money will be gone if you wait for it"

The so-called gradualism means that the recovery process should be carried out step by step. Under normal circumstances, we should negotiate with the other party first. During the negotiation process, we should first understand the reasons for the other party's overdue payment and investigate and understand their situation. In the early stage, we should understand and correct the customer's situation. Mainly, in the later stage, it is mainly about exerting pressure.

If there are no special circumstances (for example, the borrower has multiple creditors or the borrower's willingness to repay has seriously deteriorated, and assets may be transferred, etc.), negotiate first and then apply pressure. First apply pressure through non-litigation means and then apply pressure through litigation. Follow a gradual principle.

The so-called classification mainly means that the process of recovery should be divided into categories. Do the easy things first. Some businesses should be focused on. The focus of recovery should also be different for different businesses. Prescribe the right medicine.

The so-called records mean that recovery records must be kept, so as to improve efficiency, reflect results and provide legal evidence. (4) Three stages of overdue management:

The first stage: reminder + instruction before overdue

This stage is mainly the pre-loan and post-loan management stage. In this stage On the premise of complying with business procedures, we mainly remind and educate customers to encourage them to repay, effectively reducing overdue payments.

The second stage: Pre-overdue period? Understand + correct

At this stage, the main task of the credit institution is to understand the reasons why the customer is overdue, and it requires pre-loan and post-loan basis Further investigate and understand the customer's information, and analyze and evaluate the customer's willingness and ability to repay after the due date. At this stage, negotiation is the main method and pressure is supplemented. If the customer's repayment willingness and ability can be improved or corrected through negotiation, it is the most ideal and the lowest cost.

The third stage: the strong collection stage? Pressure, pressure, pressure

The second stage above is mainly negotiation, supplemented by pressure. When this stage is reached, It is necessary to change the focus to exerting pressure and supplementing consultation. At this stage, taking certain measures against customers, their business, family, social reputation, etc. can effectively improve their passive willingness to repay, so that borrowers are forced to repay proactively under pressure. Generally, non-litigation methods are used to exert pressure first. If non-litigation is not possible, then litigation is considered. If the situation is urgent, you can also consider filing a lawsuit directly. It is worth noting that even if a lawsuit is filed, non-litigation recovery methods should be used in conjunction with litigation methods, so that the effect will be better. 2. How should you make the first collection call?

This is the highlight of today. Well-regulated credit institutions will have corresponding reminder mechanisms before the loan expires, reminding customers through mobile phones or text messages. Make repayments on time and tell borrowers when and how much to repay. We suggest that "phone call + text message" is better. For some important business, written reminder letters can also be used.

Once a customer fails to repay a loan on time, as a credit institution, it must contact the customer 24 hours before the overdue date, and in most cases this contact is by phone. This first collection call is very critical, as it will set the tone for the entire collection. If used properly, it can prompt the customer to repay the loan quickly. There are several key points to grasp regarding the first collection call. (1) Four core tasks must be completed for telephone collection

Four core tasks must be completed for communicating with customers over the phone.

1. Request the customer to repay immediately today

In the first collection call, never ask the customer when can he repay the money? Must ask the customer to repay the money immediately today. , "Immediately, immediately" is an attitude.

2. Understand the reasons for the overdue payment

If the customer cannot pay back the money, he will naturally tell you the reason for the overdue payment. When understanding the reasons for the overdue payment, pay attention to listening to the customer. Pay attention to note down the key points during the process, and ask the customer appropriately about the key points that you are concerned about. To put it simply, listen more and remember less about appropriate inquiries.

3. State the pros and cons

When the customer states the reasons for overdue, don’t just listen to the customer’s statement of the reasons for overdue. Experienced account managers will press on you step by step. Step by step, the customer is still required to repay the loan. In the process, the borrower is told the pros and cons, that is, it is best for the borrower to pay back the money immediately, and it is not good for him not to pay back the money.

How to state the pros and cons? One of the author’s experiences is that the account manager must convey some obvious breach costs to the customer in a better way.

4. Obtain a commitment to repay the loan.

The customer must have a corresponding commitment as to when he or she can repay the loan. (2) The basic process of the first collection call

As far as credit business is concerned, the first collection call is usually made by the responsible account manager. The first collection call generally follows the following steps:

1. Preparation before making a call

The account manager in charge must remind the customer to repay the loan on time before the loan is due. If the customer fails to repay the loan on time, the account manager will not Be sure to contact the customer within 24 hours. Make preparations before making a call, such as checking the business file, understanding the customer's situation, the business situation, understanding the cooperation between the customer and the company, past payment status, predicting and evaluating the reasons for the customer's overdue payment in advance, and identifying problems in advance. Be mentally prepared and respond to people and other reasons for refusing to pay. Make an outline for the call, and it’s best to practice it before making the call. Only by preparing in advance can you be confident.

2. Basic steps for making a phone call

Step 1: Confirm the identity of the other party

Be sure to find the right person. They all have mobile phone numbers now. If the borrower is Natural person, call directly to the natural person. If the other party is a company, it is best to contact the person in charge or the boss directly.

Step 2: Identify yourself

If you are particularly familiar with it, you can omit the first two steps. In addition, there is another detail. Try not to ask the other party whether it is convenient to answer the phone at the beginning. If the other party says it is not convenient to answer the phone, how do you respond? Our suggestion is to go straight to the topic after confirming the other party's identity and indicating your own identity. , which is different from making a regular phone call. The tone should be very urgent, the momentum should be suppressed, and the customer should feel that we attach great importance to this issue. We must make the customer feel the pressure and our determination to collect payment.

Step 3: Request the customer to repay immediately today

Show a very firm attitude and require the customer to repay the loan immediately today. Your tone and wording should make the customer feel As long as you are determined, never ask the customer when they can pay back the money? This is a very common mistake. Maintain a calm but resolute attitude when collecting money.

Step 4: Understand the reasons for the overdue payment and clarify the crux

When we ask the customer to repay the loan immediately today, if the customer fails to repay the loan on time due to unexpected circumstances, such as forgetting to repay the loan on time, If you can repay the loan today, then the problem is solved. We can urge the customer again and explain the benefits of repaying the loan on time and the consequences of not repaying the loan on time. But if the customer cannot repay on time, he will definitely tell you the reason for the overdue payment. During this process, let the customer speak. During the process of the customer speaking, do not question the customer. Why do you say that what they said is false? We can assume that what the customer said is true and he did not lie to us, and then go to Confirm and verify.

Step 5: Still require the customer to repay the loan today and explain the pros and cons to them

No matter what the customer says, we still require the customer to repay the loan today and explain to them the Describe the pros and cons, that is, you must clearly explain to the customer the benefits of repaying the loan on time and the disadvantages of not repaying the loan on time. The author suggests that in this process, our account managers must lead the entire process and rhythm, and some obvious default costs should be informed to customers in appropriate ways during this process. When appropriate, the customer can be advised to repay through financing, but remember that this advice is generally made after the customer has given a repayment commitment. In this process, you must adopt a cooperative attitude and make the customer feel that you are thinking about him.

Step 6: Get a repayment commitment and end the call

If the customer can repay today, the matter will be resolved. If you can't pay it back today, when can you pay it back? How to pay it back? Is it an installment or a one-time payment? The borrower must make a commitment. Remember, phone collection must end with the customer's commitment. Regarding the customer's commitment, as an account manager, do not agree or disagree rashly, because the account manager generally does not have this authority. Inform the borrower that we will report the situation to the company leaders, and try our best to arrange an interview with the customer to understand the customer's situation.

Step 7: Update the case file records

Step 8: Actively follow up

According to the phone collection situation, arrange follow-up matters. If an interview is scheduled, do Be prepared for the interview and, if necessary, increase the level of pressure you apply. Attached: Recovery examples and techniques

Account manager: Manager Sun (hereinafter referred to as Sun)

Customer who owes money: Zhang San (hereinafter referred to as Zhang)

Manager Sun made corresponding preparations in advance before making the call, and directly dialed the mobile phone number of the borrower Zhang San at 10 a.m. on the first day of overdue payment. Since both parties were familiar with each other, Manager Sun omitted the first two parts of the recovery process.

Dial the phone and the call goes through.

Sun: Mr. Zhang, what’s going on with you? Didn’t I tell you yesterday that I asked you to repay the loan before getting off work yesterday. I asked the finance department today how you are going to repay the 50,000 yuan. If you haven't paid it back, you are already overdue. Please hurry up and pay back the money before 12 noon.

Note: Our tone and attitude are very urgent and we take this matter very seriously. We require customers to repay immediately today. If the customer can pay back today, he will naturally pay back. If he cannot pay back, Naturally, he will talk about the overdue Nascent Soul.

Zhang: Manager Sun, I’m sorry, one of my clients owes me 60,000 yuan. She originally promised to pay it to me yesterday, but something happened to him, and she said she would give it to me in five days. You can give it to me in six days. Look, tell the company and give me another five or six days. I can pay it all back in five or six days.

Sun: How many times have I told you, if you don’t pay it back today, it will be considered overdue. According to the contract, in addition to repaying the principal and interest, you will also have additional burdens such as penalty interest and interest. . In addition, according to our company's system, if you can repay on time, your credit rating will be improved. If the rating is high, the loan will be issued faster and the interest rate will be lower than others. Once you are overdue, the lightest penalty is to have your credit rating lowered. If you are overdue for a longer time, your future loan applications may not be approved. With a bad record, other credit institutions will no longer lend to you. The support of our credit funds is a very precious resource. You must cherish it. Think of a way to pay it back today. If you still come in today, I will tell the company and you will not be considered overdue (whether it is considered overdue will be determined according to the company's policy).

Note: Some details about the reasons for overdue can be understood later. In terms of rhythm, we still require the other party to pay. At this stage, we will bear the additional burden of refusing credit to microfinance institutions and other institutions. These two default costs have been informed to the customer. If the customer still does not pay back the money, it is natural for him to find some excuses and reasons.

Zhang: Manager Sun, I really don’t have any money here. I am also an old customer of ours. Don’t you believe me? As long as my customer returns the money to me, I will do it immediately. Pay back the money, but I really can't afford that much money now.

Note: Again, don’t question the customer. Assuming that what the customer says is true, the customer doesn’t have that much money. It’s generally unrealistic for you to ask him to sell things or use things to pay off debts. Then Next, if you want him to repay the loan today, there is only one option, and that is to raise funds to repay the loan.

Sun: Manager Zhang, it’s not that I don’t believe you. We have been cooperating with you for many years. You are a reputable customer of our company. I also know your character. Everyone talks about you with thumbs up. , if you are not honest, your business will not be like this. (Obviously, I am praising the customer, but in essence, I am explaining to the customer the impact on their reputation if it is overdue.) I would like to remind you that we are currently connected to the bank, and the country is paying more and more attention to the construction of the credit system. , if you leave a bad credit record, buying a house, buying a car and other aspects will be affected in the future. I don’t know if you’ve seen the news, but now the penalties for people who don’t repay the money owed by the national team are becoming more and more severe. (You can expand here based on the appropriate situation) I am thinking of you. If you are really in difficulty, you can’t just ask someone else to borrow some money and pay it back. Anyway, your customer will give you the money in a few days.

Note: At this stage, we have communicated to customers in appropriate ways the impact on social reputation and the consequences of bad credit records.

Zhang: Manager Sun, I have already borrowed it. Now at the end of the year, everyone’s funds are tight, so I really can’t borrow it.

Don't worry, I'll definitely be able to pay it back before I get off work this Friday.

Sun: Okay, Mr. Zhang, what is the situation of the customers who owe you money you just mentioned? Tell me again.

Zhang: We need to learn more about the reasons for the overdue payment (omitted)

Sun: If the customer you mentioned has not paid you back, how can you pay us back?

Note: In this section, you can make appropriate inquiries about other sources of repayment and about their operating conditions.

Zhang: (omitted)

Sun: I will report the situation you mentioned to the leader. I will come to your company tomorrow afternoon and we will meet and chat. There are some things that I cannot explain over the phone. .

(End the call, update the case file and follow up) Summary:

The above is our summary of the key points of a collection call. Remember the four core tasks to be completed: Requirements Pay the loan immediately today, understand the reason for overdue payment, state the pros and cons, and get a repayment commitment. Certain processes and steps must be followed in this process. When stating the pros and cons, some obvious default costs faced by the other party include additional burdens, refusal of credit by microfinance institutions and other creditors, and social reputation and evaluation will be significantly affected. , Bad credit records must be communicated to the customer in an appropriate way at this stage based on the customer's situation. We must grasp the process and rhythm and guide the customer to proceed at our pace. When a customer states the reason for overdue payment and refuses to repay, do not give up easily and press forward step by step.

Telephone collection calls must end with a promise. Pay attention to the tone and wording during this process. Respond promptly to customers’ uncooperative and unfriendly behavior. Paying back debts is a matter of course. Just press the opponent's head. Generally speaking, after making a collection call, they will visit the other party to understand their situation. Door-to-door collection can be roughly divided into three categories: confirmation visit, search visit, and breach of contract visit. First phone collection + confirmation visit is our most commonly used collection combination.