There is a recurring theme in many of the management level programs I conduct. I hear it often, and as basic as the concept is to the survival of any business, it is often an area of corporate weakness: the sales function. Certainly, large organizations typically have a sales team that strategizes industries of interest and competitively positions representatives. Individuals often acquire expertise in specific markets and then attack those markets in various ways.
The more typical scenario for the average to small collection firm is the owner/manager handles sales which means it never gets done. I continually hear the lament of agency owners and entrepreneurs that they get so caught up in the daily struggles of the industry they never have the thoughtful time to devote to generating more business. There is no sales plan, just a shotgun approach which provides for the occasional attendance at a trade association meeting or the polite ask of a current client for a referral. In time, it becomes painfully clear this approach does not provide the flow of business necessary to perpetuate an operation.
In days gone by this casual approach to sales accompanied by the thought, “if you take care of clients they will stay with you forever,” seemed to work for many organizations. Client loyalty, especially on a regional level, ran high for those operations that provided exceptional service, outstanding liquidations and timely responses to client needs. Those days are gone. The bulk of the collections industry is comprised of collection firms in the five to 25 employees level working on a regional or state basis. They are losing their larger clients in droves as mega corporations continue to acquire these operations. These larger creditors have a lineup of significantly bigger national agencies in their pipeline for account placements. Relationships that have spanned decades vanish overnight for the smaller player. Has this happened to your operation?
Although some of these decisions are completely out of our control, there are things you can do to better position your firm for competitive sales success:
1 Don’t Act Like a Small Firm
One dynamic of smaller firms is that they act like a small player. They have a regional mindset and are short sighted. Expand your horizons. Despite the size of your office, start addressing industry trends and requirements in preparation for potential client requests and mandates. Develop a unique approach or program. Tom Abbott said, “It’s not just about being better. It’s about being different. You need to give people a reason to choose your business.”
2 Become the Expert
I have always maintained what I like to refer to as a consultative approach to our collection services. We aren’t just a bad debt collection agency but an accounts receivable management firm that can address creditors needs on many levels. We become the go-to agency when clients have questions and we often push out industry compliance issues and updates regularly to these partners. It places your organization on a different level than your competitors. Zig Ziglar said, “If people like you they’ll listen to you, but if they trust you they’ll do business with you.” Build trust by being a knowledge resource.
3 Anticipate Organizational Change Before it is Mandated
Regularly tap into every industry information resource available to see what the emerging requirements are of state and federal regulators and specific market segment trends. Start upgrading your facility to accommodate security concerns. Develop internal protocols that mirror what larger industry players do.
4 Embrace and Understand Vendor Management
Federal regulators have pushed the notion of vendor management in recent years. Creditors are increasingly required to assess the compliance standards and security of the firms they employ, especially if you represent banks and credit unions. Proactively reach out to your clients and ask what they may be looking for from you. Attend a vendor management seminar or webinar and start developing the standard operating procedures commonly mandated. When asked for these documents by a client, you should be able to provide them quickly and in a professional, thoughtful format.
5 Develop a Plan
After you have your proverbial ducks in order, prepare a plan for the type of business you want and the footprint you want to develop geographically. We don’t all have to be nationally licensed. There are still many regional opportunities. Don’t get stuck in the past and perpetuate the shotgun, disorganized approach to business development. It is a process that must change to meet today’s demands of the purchaser of the services we offer. Zig Ziglar said, “You have made some mistakes, and you may not be where you want to be, but that has nothing to do with your future.”
A common slogan in sales for decades when referring to clients has been, “It is the one you are working on, the one you are servicing and the one you just lost.” Realizing this dynamic continues in 2017 and beyond, putting energy into the sales function helps feed your organizational machine with the business flow needed to maintain growth and profitability.
We encourage our readers to submit a “best practice” idea for inclusion in this column. Until next time, I’m in a collection office near you!