Collections: Lessons From the Last Six Months
As a trainer and consultant in the LHPH/BHPH business, I have stayed true to one core value . . .
Guest Blogger – Bill Elizondo, AFS Dealers
As a trainer and consultant in the LHPH/BHPH business, I have stayed true to one core value throughout my career in this industry: honoring the human factor by building relationships.
This core value of building relationships is the key to both short and long-term success. So, what have we learned during these challenging times? In sum, we have learned that our customers want to take care of their responsibilities, but do not always know how and look to us for help. In addition, we have learned that when we give specific instruction and guidance to our employees, it enhances their productivity while working remotely.
What Has Worked
1. Taking the time to gather good and verifiable information.
It's easy enough to put someone in a car and have them burning gas, but it is another thing to make sure they can still pay for that gas in the future.
We learned to verify the information that our customers provide. For example, we have seen a big increase in fake paycheck stubs. These can be purchased online for under $20.00. These sites allow an individual to use nearly identical templates from major payroll companies with the individual's name and personal information. Due to office closures, it is difficult to verify authenticity with an HR department.
Educate your employees by purchasing copies of the templates online. Another option is to use a service like The Work Number, TLO, or Accurint to verify your customers' employment. Whichever method you choose, taking the time to verify the information will make the difference between a successful sale and a constant collection customer.
2. Remaining firm equates to consistent payments. We learned that our customers understand the importance of keeping their cars, and being firm and fair leads to consistent payments.
3. Set specific timelines and dates for customers. Following up and following through on those timelines and dates shows your customers that you are invested in their success.
If you do not stay consistent with keeping in contact with customers, they will go different directions. A good welcome call to explain all the payment options is important for success. Set up payments for the day the customer is paid. Online payments make it extremely easy for customers.
4. Remember, an unemployed or furloughed customer may still want to keep their car or buy a car.
What Has Not Worked
1. Not building relationships with your customers. Relationships pay!
2. Overlooking the need to reach out to every customer. Don't be caught off guard by thinking that the perfect payers will always pay. We found that sometimes even those great payers turned their cars back in because they did not think there were any other options.
3. Neglecting to follow up with your employees about expectations and performance when they are working from home. Setting specific daily goals is key.
In the grand scheme of things, COVID-19 has affected every one of us. Building and maintaining good rapport with your customers and ensuring both the customer and the dealers are in complete understanding of each other's responsibilities is vital. Opening the door to communication, honesty, consistency, convenience, and trustworthiness is key to maintaining and extending your success.
Bill Elizondo, COO of AFS Dealers, LLC has been in the Sub-Prime financing, LHPH/BHPH business for over 30 years. Working for Car Financial, America's Car-Mart, and Superior Auto in operations and senior level positions. Bill, a proud TIADA member, currently uses his expertise consulting clients across the country and teaches in Seminars and Conferences at the National and State levels.