Effective collection is an art form. It can be extremely rewarding for those who apply the lessons they have learned and take advantage of every opportunity to learn from our industry’s experts. Here is advice that will help members of your credit and collections team improve their performance, as well as some general observations that can help each of us step up our game.
When we ask for feedback on what our members value the most about participating in our educational programs, the top-rated response is the opportunity to exchange ideas with their peers. This is equally true for someone who is new to the industry and learning the ropes as it is for those with years of experience.
Michael Denson, who was named vice president of the media division at debt collection agency HRI Consulting Group after spending most of his career on the media provider side, recently observed: “Over the many years that I’ve been involved with credit and collections, I’ve learned a number of lessons that I wished I’d known about when I first began my career.”
Denson shared some of those valuable lessons in an article appearing in the current issue of TFM —The Financial Manager, the bimonthly magazine for members of MFM and BCCA, the media industry’s credit association. The September-October 2014 issue containing Denson’s article, which is entitled “Stepping Up Your Game,” will be available on MFM’s website for a limited time. It is worth the read. In addition to containing a number of tips that will help members of your credit and collections team improve their performance, it contains some general observations that can help each of us step up our game.
Denson is regarded by his former peers at BCCA and the New York Media Credit Group as a true sage. Here are a few pearls of his wisdom that that I found particularly helpful, beginning with those that can help to ensure employability at a time of tremendous consolidation at both industry and organizational levels:
- Never take your job for granted. Do everything that is expected of you. Keep your accounts up to date; continue to learn your craft, and continue to network.
- Acknowledge your successes. Don’t be afraid to pat yourself on the back for a job well done and make sure that others know what you’ve accomplished, as long as you don’t sound too full of yourself.
- It’s a team effort. Your success will also reflect favorably upon your team and supervisor.
- Build relationships with your customers. The “personal touch” goes a long way. Get to know your customers and your peers by actually talking with them.
- Take advantage of opportunities to network. Networking helps to build business relationships. Visit the advertising agencies that your company does business with whenever possible.
- Face-to-face meetings make a difference. Personal and direct contact can bring your invoice from the floor to the desk.
- Escalate when necessary. Denson provides the example of a past due account he called daily without success until he escalated the calls all the way up to the CF.
- Take the time to follow up. By staying in touch with contacts they will remember you in the future. Thank you notes can work wonders.
- Document your communications. Immediately document everything that is said during a collection call and everything that’s done during a credit investigation.
Set the right tone. Denson acknowledges, “Making effective collection calls is not for everyone. You must strike a balance between being polite and being aggressive.” He also advises:
- Prepare for the call, including knowing the details of what you are calling about.
- Be professional. Don’t raise your voice or swear.
- Make sure that you are speaking with the right person. Don’t let them give you the brush off.
- Always control the conversation. Keep it focused on the debt and set deadlines for when the payment will be sent.
- Be flexible and work with the customer.
- Keep detailed notes.
- Be productive and keep the contact brief and to the point.
- Always follow up.
Denson also numbered among the industry credit and collections professionals who shared the lessons they have learned along the way in a session at Media Finance Focus 2014. It is a perennial favorite for our annual conference attendees, who find their peers’ advice very helpful in stepping up their own game and improving upon their company’s collections practices. This year’s tips included:
- Credit must communicate with sales on credit holds. When the credit department places a hold on a customer’s ability to purchase more advertising on credit, ensuring the sales team knows who is on a hold, and why, will help to guarantee the hold isn’t lifted until everyone has agreed on how to handle the past due debt .
- Share the pain. Strategies like charge backs — taking away commission previously paid to a sales employee when the client hasn’t paid the invoice after a predetermined amount of time — can help to ensure a sales rep gets directly involved in the effort to collect on a past due account.
- Hold the advertiser’s officers accountable. Some customers will create different corporations in a different market to qualify for credit, despite having racked up debt at other locations. Work with your sales department to ensure the corporation’s officers have been identified, investigated and agreed to liability for payment.
- Check references. An applicant without credit history may create fictitious references. Credit departments can get the help of local sales teams in verifying the legitimacy of these organizations and individuals. (BCCA’s credit investigators are another great resource for ensuring reference accuracy.)
- Use social media. Using a past due account owner’s social media postings and tools like Google Earth can be very helpful in identifying assets that may need to be impounded.
- Take advantage of UCC data. UCC, Uniform Common Code information, can alert you to whether a bank or other lender has placed a lien against equipment or other assets owned by a credit applicant. (Again, BCCA credit reports can be a great resource for this information.)
- Avoid the risk of AR factoring. Some ad agencies sell their accounts receivables to factoring firms as a way to get cash sooner than by waiting for payment from their advertiser clients. Since the factoring firm doesn’t agree to pay the agency’s creditors, the only way to collect may be if the advertiser has also agreed to liability for payment.
- Look for theft by conversion. Rather than paying the media provider, a past due agency customer may have used the money received from an advertiser to make personal purchases, such as a yacht or sports car. The FBI will get involved in theft by conversion if it occurs across state lines. This approach has resulted in media providers ultimately collecting on such accounts.
Another educational forum highly valued by our credit and collection department members is the annual BCCA Media Credit Seminar, which this year is scheduled for Thursday, Nov. 6, at the McGraw-Hill Building in New York City. More information about the Seminar may be found on BCCA’s website. A panel of seasoned credit and collections experts working with this year’s Chair, Greg Frost, credit and collections manager for Hearst Television, have put together a comprehensive lineup of sessions and speakers that will help you to step up your game in the coming year.
As Michael Denson noted in his article, effective collection is an art form. It can be extremely rewarding for those who apply the lessons he has learned and take advantage of every opportunity to learn from our industry’s experts.
Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary. She can be reached at [email protected]. Her column appears in TVNewsCheck every other week. You can read her earlier columns here.