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Do You Know Your Collection CSI?

By Brent Carmichael
NCM Associates, Inc.

How would your collection department CSI (Customer Service Index/Indicator) measure up to everyone in the BHPH industry? Most BHPH operators haven't given it a second thought. As of yet, there hasn't been a national BHPH CSI developed, but it's something that must be tracked and monitored to have any hope of future success.

In today's highly competitive BHPH marketplace, a low CSI will not only cost you money, but could literally cost you your entire business. Obviously customer service and satisfaction is important in all facets of the business from sales, to service, to collections, but in the recent economic and competitive climate, how the customer is treated during the collection process will set you up for either future success of failure.
 
The BHPH business is widely recognized, and rightly so, as a collection or risk management business. Yet often times the service after the sale, so to speak, is neglected or simply ignored. The most successful operators thrive on repeat and referral business. A direct result of providing good overall customer service. And those same operators usually experience a better performing portfolio, which, again, is what this business is all about.
 
One of the biggest challenges to providing effective collection customer service comes from the top. Some operators still cling to an old school train of thought. They have already provided service by selling and financing a vehicle for a customer when more than one other dealer said no. Another car in that same train carries the thought that the customer has signed a contract and that's where the obligation ends. These thought processes are filtered down and can affect everyone's attitude in the organization towards their greatest asset, the customer. I'm not saying the customer is always right, but they are becoming more right everyday.
 
Another sizeable challenge to providing good collection customer service is setting the right tone. The first collection customer contact usually occurs when a payment is missed or there is a service issue. Neither of which is particularly positive from the customer's viewpoint. Too often it is assumed that the customer is either lying in regards to their circumstances or simply trying to get something for nothing. Both of which lead to an overly aggressive posture, usually by bullying or giving ultimatums, to try to exert some form of control over the customer. Very rarely does this work effectively in the long run.
 
The key to setting the right tone is getting the customer to first like you. If they like you, they will trust. And if they trust you, they will respect you. Once they respect you, they will be much more likely to accept whatever you have to say good, bad, or indifferent. It all begins with listening. We were given two ears and one mouth for a reason. We should listen twice as much as we speak. The like-trust-respect dynamic is instrumental in setting the right tone. Set the wrong tone and it will be arduous collection task for the length of the note. But rest assured if you set the wrong tone, you will not have to worry about that customer, or anyone they know, once they are paid off.
 
There are many ways to develop and foster customer service and satisfaction. Customer rewards programs have proven successful in other industries and are now picking up steam in BHPH. Most everyone has a repeat and referral program, but collection and service reward programs are becoming more prevalent. I can hear those of you on the old school train; “Reward them for doing what they are supposed to do anyway? Never!” In today's ultra competitive BHPH market, that may be just what it will take to thrive. Anything to separate you from the competition, provide added value to the customer, and keep them paying you. Whether it is the customer receiving credit for making their payments on time or incentives for keeping up with the regular maintenance of the vehicle, the key is just having something in place.
 
Deciding to renew or extend your commitment to customer service and satisfaction is step in the right direction. The next step is how to effectively track and monitor progress, or lack thereof. There are a few ways to do this. Written surveys and call recording services or systems seem to be the most popular and effective.
 
Written surveys should be simple and concise. Multiple choice and/or number grading are the easiest to track and quantify. Open response can sometimes be just that. And often times not legible and so not of much value. Surveys can be done at the time of sale, as the customer pays off, or at the time any service is performed whether it be warranty, customer pay, or best of all, good will. It's a good practice to include your employees. If the right tone was set, who better to know what the customer likes and dislikes are. Regardless of whom it's from or when, all feedback can be valuable.
 
Call recording services or systems are also valuable in tracking and monitoring how well your organization is handling your customers. One bit of advice: Remove all sharp objects and anything that can be thrown or broken prior to listening to the first set of recordings. You will be astonished at what and how things are being said to your potential and existing customers by your employees. Once you get past the initial shock, they will provide a great avenue for training and holding your remaining staff accountable. They can also provide a means of verification in a “We said, they said” scenario thus preventing a possible legal nightmare.
 
Customer service and satisfaction is more important now than ever. Competition for the BHPH customer is very stiff and, with the aggressiveness of subprime lenders at an all-time high, it is tougher than ever to find and keep customers. The like-trust-respect dynamic will be the key to not only sales success, but more importantly, collection success. Today's BHPH customer only wants what we all want. They want to be treated with courtesy and respect. The truly successful operators already understand this and act accordingly. A simple fact that will derail the old school train. 

Brent Carmichael is the Executive Conference Moderator, 20 Groups for NCM Associates, Inc. On Monday, December 10, he will be presenting the TIADA seminar Collect the Cash, Not the Car in Fort Worth. REGISTER HERE

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