Collections and negotiating skills.(perspective)(Viewpoint essay)

Successful collectors of business debt seem to possess a fairly consistent set of skills. But one skill stands out as perhaps the most valuable attribute of good collectors, who may not even realize they possess it: the mastery of negotiating. Like all collection skills, it can be developed with the help of some clear thinking, discipline and, above all, practice.

I grew up thinking of negotiations as high-pressure battles between adversaries, as in labor-management disputes over collective bargaining agreements (remember them?). In the 1980s, a host of self-help books flooded the market, offering negotiation strategies to "get what you want" and to become the virtual master of others in daily life. Neither of these images seemed relevant to the kind of collection contact my creditor clients and I make every day, and we never thought of ourselves as negotiators.

About 10 years ago, a psychologist friend hired me to collect some fees owed to his practice group by a corporate healthcare plan. I made a few routine calls to the insurer's payables office, then escalated my contact to the management level ... and the account balance was quickly paid. This involved no mystery or heroics--just ordinary collection work. But my friend was impressed and asked me to share my "collection secrets" at a business meeting of his practice group. I gave the group a quick report on what I felt were routine collection calls. The psychologists, on the other hand, commented on how effectively I had negotiated with the various payables people I encountered. They used psychological jargon to describe collection techniques I'd simply learned along with my clients, over long and hard experience.

Here, in plain language, are three elements of negotiation that the psychologists felt were significant:

1. Know Your Bargaining Chips. Take off your Credit Police badge, and recognize that you and your delinquent customer really are negotiating. Yes, you can (theoretically) do all kinds of things to make life difficult for a delinquent account. But he/she has power, too--the power to either pay you or not. Obviously, you want their money. So, you have to bargain for it--and you need to know what kinds of bargaining chips you have to work with. In reality, you have both positive chips--if they cooperate, you can do things for them (releasing orders, sustain ordinary sales relations, reinstate credit terms, etc.)--and negative chips--if they do not cooperate, you can do things to them (hold orders, close account, place for collection, etc.). Make a list of all positive and negative bargaining chips you can think of in your collection work. Don't forget ...