Understanding the role of respect and dignity in effective debt collections

You never know what an individual is going through and that is certainly true when it comes to consumers struggling with debt. No consumer wants to have a pile of unpaid bills and it’s a stressful place to be at the least.

How every consumer ends up in debt is different depending on the circumstances. While some people have mismanaged their money, other consumers have had various circumstances that could be out of their control.

Because we never know how a person gets to where they are, it is absolutely critical that we treat people with the dignity and respect they deserve. Because most people never wanted to be in the situation they are in.

When a consumer is treated as a human being rather than just an account number, there is much more cooperation and collaboration when it comes to solving the debt.

Here’s why dignity and respect matter, whether you are calling your customer or you’ve hired a debt collection agency to collect your money.

Understanding the emotional toll of being in debt

Debt is not just a financial burden for consumers; it’s often emotionally exhausting.

Consumers dealing with unpaid bills may feel embarrassment, stress and anxiety and even shame. Over time that takes an emotional toll. For many, what compounds the situation a consumer is in could be the result of a job loss, medical bills, or other unexpected life events such as unexpected home repairs or veterinarian bills. When a professional debt collector leads their communication with empathy and respect, that person can acknowledge the complexity behind the consumer debt and show that individual that they are implementing a human touch and not just a number.

Acknowledging the emotional burden when communicating with the consumer but still understanding there’s a balance due can set the tone for a productive conversation and it can break down the walls that may be getting in the way of respectful dialogue.

Building trust with consumers leads to better recovery rates

When a consumer trusts that your company representative or a collection professional will treat them fairly, they are much more likely to engage. Engagement and trust lead to an open dialogue, which allows both parties to begin to explore options for repayment. Whether you’re making internal calls to get customers to pay or using a collection professional, when you take the time to listen to the consumer, explain options clearly and avoid judgment, you can turn a collection call into a positive experience. If you’ve treated that customer right with dignity and respect, they may prioritize your bill over others.

Dignity and respect are competitive advantages

Your business no doubt has competition and consumers can choose who they do business with. When you treat your customers with professionalism and dignity in good times and bad, they will take notice. You build tremendous goodwill when you treat people right. And the positive perception customers have of your business not only helps when trying to get them to pay your bill, but it strengthens that relationship for the future.

The same is true in debt collections. When the collection agency you have hired focuses on professionalism, respectful communication and ethical standards, your overdue bill might just end up at the top of the list. And because that collection agency has represented your business well, you may very well see that customer return.

Being nice is not a weakness…. It’s strategic and the right thing to do

Many businesses approach customers who have not paid with an aggressive tone. That’s just not the way to make progress in getting your customers current on their financial obligations to your business.

Some businesses feel that being respectful means that you’re being lenient or soft and that’s just a misconception.

You can be assertive and still be compassionate with your customers. And you can firmly request payment while still treating the customer with the dignity they deserve.

The path to positive cash flow does not have to involve humiliating or intimidating your customers. When you or your debt collection professional leads with dignity, you see increased engagement, you protect your brand, and you recover more money.