By Vilis Ozols, MBA, CSP

 This article appeared in the California Collectors Association monthly magazine; Collectors Ink, in the Texas Collectors Association  monthly magazine and in the CRS News quarterly newsletter in 2005.(click here for information about reprinting these articles)

If someone were to ask you, “What is the most important skill for a collector to increase the effectiveness of their collections efforts?” what would you answer? Some might say assertiveness; others, negotiation skills; while yet others might say closing skills. The actual answer might surprise you: listening skills.

This may seem like an over-simplification, or maybe too much of a focus on what many would call a “soft skill;” however, this article will show that many of the more tangible “hard skills” are fueled by the ability of a collector to listen effectively and convey to the debtor that he or she has been heard. More and more, effective collection practices do not merely include getting a debtor to “fork over” money that he or she otherwise would not have paid. More and more, effective collection practices include convincing a debtor to “reallocate resources.” This means influencing debtors to pay your agency all, or a portion, of the debt it is representing, over spending their money on other things that seem more important to them and on which they would otherwise choose to spend their money if you, the collector, weren’t on the phone.

The First Rule of Collections

Think about some of the skills that are involved in negotiation, arbitration, and mediation. Interestingly enough, the number one rule of each of these functions is the same: find out and understand the other side’s position. The same is true for collections. So, here is the first rule of collections: Until debtors feel that you, the collector, have heard what they have to say, they are less likely to hear what you have to say. If they are not hearing or buying into what you are saying, it is less likely that you will get to the point of securing a promise-to-pay or a payment arrangement.

I’m Okay, You’re Okay!

I’m OK, You’re OK was the name of the #1 bestselling book by Dr. Thomas Harris that described the concept of “Transactional Analysis.” What this concept essentially says is that whenever we communicate with someone else, we communicate as one of three personalities: a parent, an adult, or a child. Based on the roles of the two people involved, there are certain characteristics and different levels of effective communication associated with each.

Let’s look at how this would apply to collections. Whenever someone is in a position of authority (such as that of a collector), the default mode is a parent-to-child conversation. So, in an average collection call, the collector defaults to the role of the parent and the debtor, to the role of the child. According to transactional analysis, the primary characteristic of a parent-to-child conversation is a one-way conversation, with the parent assuming a lecture mode and the child just listening. We know that this is not the most effective mode of interaction because the person in the child role, since he/she is a passive participant, tends to “tune out.” Since the debtor, in the role of a petulant child, is also an unwilling participant, he/she is less likely to follow through with a payment arrangement. With this scenario, promises are more likely to be “broken.”

The most effective interaction is an “adult-to-adult conversation.” The predominant characteristic of an adult-to-adult conversation is “two-way interaction”: the people on both sides engage in both talking and listening. Ideally, as a collector, the goal should be to engage the debtor through listening as well as talking, so that the encounter can be realistically defined as an adult-to-adult conversation. A debtor who is engaged in an adult-to-adult conversation is more likely to make and keep a promise to pay, because he/she was, psychologically, a more willing “adult” participant.

The worst kind of interaction is a child-to-child conversation, where both sides engage in an emotional outburst. In a child-to-child conversation, there is rarely a rational outcome, and it is nearly impossible to end up with a win-win result.

Techniques for Better Debtor Conversations

There are very specific techniques that a collector can use to create the desired adult-to-adult conversation that is more likely to yield positive collection results.

Aim for Adult-to-Adult Conversations

First, set the goal of tangibly aiming for engaging in adult-to-adult conversations when you interact with debtors on the phone. After nearly every conversation as a collector, you will be able to quickly decide what kind of conversation it was (adult-to-adult, parent-to-child, or child-to-child) and analyze how to be more effective in the next conversation. There are a couple of caveats about situations in which this may not be possible. If the debtor chooses to behave as a child would (which you have no control over as a collector), the only appropriate role for you is that of a parent. Also, if someone is willfully breaking the rules, then the appropriate approach is also a parent-child conversation. A good example of this is a police officer pulling over a speeding motorist. The officer is trained to engage in an authoritarian mode (parent-to-child) using an implied guilt statement such as, “Do you know how fast you were going?” The officer might as well have said, “I’m in charge; you are not; and you are in trouble.”

Use the Debtor’s First Name

As a collector on the phone, a simple technique to try and move toward an adult-to-adult conversation is to use the debtor’s first name multiple times in the conversation. The airline companies conducted research by analyzing in-person interactions for gate agents at airports and found that a gate agent could go through entire conversations with a customer without once ever making eye contact. What the researchers observed, though, was that if the gate agent used the customer’s first name at least three times in a conversation, eye contact was guaranteed. Eye contact is one of the characteristics of an adult-to-adult conversation. Now, if you can create eye contact in the course of a telephone conversation, you are one super collector, that’s for sure. But the theory is sound; using the person’s first name helps establish the interpersonal connection that makes effective conversation possible. You won’t get the physical eye-to-eye contact possible when meeting in person; however, you will, by using this simple technique, be more likely to facilitate an adult-to-adult conversation.

Use the Debtor’s Words in Your Sentences

Make a conscious effort to use the debtor’s choice of words (not necessarily your own) when you respond to the debtor’s remarks. People, by nature, are more likely to hear what you have to say if you use words that they just used themselves. The technical term for this phenomenon is Neuro Linguistic Programming (NLP). This concept, in its simplest sense, states that when a person uses a phase to speak, it creates a “neural pathway” in the person’s brain. If a speaker uses the same words in a sentence that the listener has recently spoken, the listener is more likely to “hear” the statement because the neural pathway for the words already exists in the listener’s brain. Hence, it takes less work and creation in the brain for the listener to comprehend.

Also, the debtor will feel that you listened to what they had to say because you used the same words to describe the situation as they did. The likely end result is an adult-to-adult conversation and a higher probability of a promise to pay. For example, a debtor might use the words “credit card company” for an organization that the collector more accurately identifies as a “credit issuer.” If the two terms definitely refer to the same thing, the collector will be more effective adopting the debtor’s choice of words.

Restate the Debtor’s Issue

When we hear our own thoughts or arguments repeated back to us, it really does put us into an adult-to-adult conversation mode. Psychologically, when the debtor hears his/her own thoughts repeated back by the collector, the debtor is reassured that the collector has truly heard what was said, acknowledged the debtor’s issue or argument, and respected the debtor as an adult. An example of this might be to say, “So, what I hear you saying is that you don’t feel you’re that far behind in your payments because you called the credit card company and let them know you’d been laid off. Now you’ve found another job and you feel like you can start paying off the debt, but it sounds like you’d like to pay in several installments. Is that correct?” As a result of an adult-to-adult conversation, the debtor will be more likely to enter into and keep a promise to pay.

Avoid Parental or Judgmental Statements.

Judgmental statements are statements that question the quality of the person’s choices, character, or intelligence, such as, “Why didn’t you just pay on time?” or “You should have known that interest would be charged and accumulated!” or “If you didn’t have the money, why did you spend it?” Whenever you use judgmental phrases such as these, you can be assured you will be triggering a parent-to-child conversation. If your goal is to engage in an adult-to-adult conversation, make it a practice to avoid judgmental statements at all costs.

Anyone who has ever done phone collections realizes that there are a variety of skills that contribute to effective collecting that result in promise to pay arrangements. However, when you dissect these skills, you will likely come to the conclusion that somewhere, at the root of each of these related skills, the foundation is still built upon the collector’s ability to listen effectively to what the debtor is saying. To truly be a skillful collector, you must start by being a skillful listener.

The most basic of all human needs is the need to understand and be understood. The best way to understand people is to listen to them.


Vilis Ozols, MBA, CSP, ( president of the Ozols Business Group in Southwest Florida, is a motivational business speaker and leadership consultant. He is the author of 3 books, he’s a former pro beach volleyball player and he has spoken to businesses in all 50 U.S. states.