bob – the builder is a real, live Case Study. I am recording what does or doesn’t happen so that you can see the thought processes behind an effective collection strategy and how the three principles of effective account collections are applied in real life.
To see all of bob – the builder as it unfolds/unfolded click here.
30 March 2009
The March instalment has not yet been received. It was due today. This is the email we sent to Dave (the debtor)
Hi Jane (Dave – the debtor’s wife)
As Bob is away this week, please advise what date you remitted March’s installment.
If you have not done so yet, please advise when you will be.
03 April 2009
No reply to our email, so, we sent another one. This time, the only “threat” being used is that we will re-institute the interest component of the debt. We are simply following through. No emotion involved, just “this is what will happen if you don’t pay or contact us“.
According to our records
1: the March instalment has not yet been received, and
2: you have not replied to our last email (below).
In an earlier email of 13 February we advised you that
In view of your recent payment, no interest is being charged on the balance remaining. This will continue to be the case as long as regular instalments continue. However, please be quite clear that if no reduction is made in any one month and you have not advised us accordingly beforehand, the firm will be left with no alternative other than to re-introduce the interest component in protection of its interests.
If we do not hear from you by 2.00pm, Wednesday, 08 April we will be obliged to re-introduce interest to your account. I will advise you of the new balance due on 10 April should that be the case.
Nothing, until 10 April. We are showing this debtor that we say something, we do something. We follow through.
So, what do I expect to happen now?
They will either pay or contact us. If they do neither, we will send them an email with the new balance due (including the added interest). It will be much stronger. I think they’ll contact us.
SO, WHAT HAPPENED IN THE END?
Long story short – Dave the Debtor paid everything except a final $2,500 and that was only because Bob decided not to chase this anymore!
Points to Note:
No legal action was ever taken. It couldn’t have been anyway as the Statute of Limitations kicks in after 6 years and this debt was 8 years old when we started collecting.
Dave paid because the ‘pressure’ to pay never let up.
The “threat” of re-introducing interest was made clear to him although, in fact, Bob would never have done that but … Dave did not know that.
A new name was introduced to Dave. Me. He KNEW how to get away with not paying when dealing with Bob, but this unknown factor was very unsettling to him.
Many of the principles mentioned in other posts in this blog were used – unusual deadlines, sms messages, chasing BEFORE the payment was due, precise language, using ‘down time’ to our advantage …