9 Steps to Help Self-Storage Managers Make Effective Collections Calls
|Copyright 2014 by Virgo Publishing.|
|Posted on: 01/18/2013|
By Aycha Williams
Whether or not you’ve ever performed collections calls, you’ll probably agree that calling a customer to ask for money doesn’t appear at the top of most people's list of favorite things to do. According to an article published last year by credit-to-cash-advisor.com, collection calls even fall at the end of the to-do lists of most credit departments. They take most people out of their comfort zone, as callers fear embarrassment or failure in the process.
The good news is making effective collections calls is a skill self-storage managers can develop. You need to be able to anticipate the different answers customers may give as excuses and be ready to control the conversation for a final push toward a payment commitment. You can take the sting out of this important endeavor and find greater success by following this nine-step process.
Step 1: Start Right
With all new customers, thinking ahead is important. Whenever you have a move-in, there are two collections-related topics to cover. First, explain the late-fee structure in detail. Ensuring customers understand the consequences in advance will help decrease the number of collections calls to be made. In our company, storage rent is due on the first day of the month and can be paid until the fifth. We tell customers those four days are their grace period. On the sixth day, the first late fee will apply, and there are no exceptions.
The second way to start off collections on the right foot is to offer customers an incentive to sign up for auto-pay. Imagine if 30 percent more of your customers elected to make payments automatically. Those are guaranteed payments you don't have to worry about! One of the successful promotions we’ve run is waiving the $15 administrative fee for new customers who agree to sign up for auto-pay.
Step 2: Be Consistent
Two of our storage managers in Orlando, Fla., told me that when collections procedures are applied in a uniform manner to all customers and by all employees, it dramatically decreases late payments. It’s very important that your team be consistent in refusing partial payments, enforcing late fees and blocking access to storage units until payments are current.
If managers are reluctant to bend the rules, customers will learn this very quickly. Making the owner’s collections policy clear and following related rules as a team will help decrease collections since most tenants want to avoid late fees at all costs.
Step 3: Collect E-mails
Our managers never tire of collecting e-mail addresses from tenants. These have another great use aside from marketing in that they can be used to prepare customers for the upcoming month’s rent! By asking for e-mail addresses and compiling the data, managers are able to send mass “rent due” reminder e-mails a few days before the due date. They also send late-payment notices via e-mail once an account becomes delinquent. Some people are busy or forgetful and respond well to an e-mail reminder.
It’s also important to sort customer-contact lists to make note of tenants for whom you don’t have e-mail addresses. This will enable you to call late-paying tenants and remind them about upcoming payments.
Step 4: Schedule Frequency
Scheduling days to make collections calls and calling early and often are keys to reaching customers. Ensuring contact in some manner will leave tenants without an excuse for missing the payment date. For example, you can say, “I have left two voicemails and sent three e-mails about the payment reminder.”
Our company practice is to call twice before and after the late due date and send one e-mail before and after the date as well. The final call comes before the month ends as a last chance to bring the account up to date.
Step 5: Be Professional and Helpful
Watch yourself closely during collections calls. Speaking slowly, enunciating, using a lower-pitched voice and pausing often will convey professionalism to your tenants. Don’t forget to be friendly in the process. Our managers tell us it makes a big difference when they put themselves in the customer's shoes.
Working with tenants to collect payments also proves successful. For example, you can say, “I didn't want you to be charged a late fee. That’s why I've been trying to reach you.” Another effective strategy is to say, “If your credit card is almost full, do you have another credit card you can use to split the payment, so you can be current on this month’s rent?”
Step 6: Blame It on the System
This step ties in with situations where one team member has been bending the rules—waiving fees and taking partial payments—while others work to stay true to the facility's policies. In such cases, customers will expect to make late or partial payments without consequences. If you find it difficult to enforce the policy or deny a customer request, consider blaming the collections call on someone or something outside of your control, such as a new software system or your superiors.
For example, “We have a new software system in place that doesn’t allow for late or partial payments. In fact, the system will continue to add late payments until you’re current with your account.” Another example is, “We have a new district manager, and she’s removed all our credentials for removing late payments.”
Step 7: Be Organized
Once you’ve completed the first round of collections calls, do you immediately schedule your next round? What’s your system to follow up with a customer who said he’ll not be able to pay until the following week? How will you remember to follow up with him on that date to ensure he pays?
One way to do this is to set up reminders in your management software or online calendar. Be organized and input reminders for yourself for each delinquent account so you can track them before it’s too late.
Step 8: Know the Psychological Factors
Your state of mind, the tone of your voice and your attitude will all impact the success of your collections call. Here are a few areas to prepare:
Step 9: Finalize a Solution
Were you able to get a commitment for payment from your tenant? If you can’t get a full payment, what are your options? Some facilities are in low-income areas and a partial payment may be better than none. In other cases, more drastic measures may necessary. In either case, always work toward a viable solution to benefit your facility’s overall profit.
Whether you’re working with an individual tenant or focusing to reduce high accounts-receivable, thinking ahead and making strategic decisions during move-in and working diligently to avoid and lower delinquencies is crucial to reducing collections calls. During a call, always keep your focus on remaining in control of the conversation and work to achieve your goal of receiving a payment in a timely manner.
Aycha Williams is a marketing and training strategist for AC Commercial Property Management, which currently manages more than 1.2 million square feet of self-storage and other commercial holdings in Florida and Texas. She has more than 15 years of commercial real estate, high-tech and consumer-products marketing experience. For more information, call 407.647.9800; e-mail email@example.com; visit www.accommercial.net .