Are your Collection Letters Effective?
We’d all agree that writing effective collection letters is a balancing act between ensuring you receive payment in full and maintaining a positive working relationship with your customers.
You don’t want your correspondence to end up thrown to one side, added to a stack of unread post, because the seriousness of the matter wasn’t made clear to the reader; but you also don’t want to alienate your customers through poorly worded warnings that sound threatening.
As it has already been said, collection letters are a delicate balancing act between politeness and firmness; by using the correct techniques you are giving yourself a much better chance of encouraging payment from your customers.
Develop your Tone
The further on in the letter cycle that you have gone, the more firm your tone should become (letter one, letter two and final demand).
Ensure your Letters have Impact
Your letters should begin with the outstanding debt, along with any interest and compensation added to use as leverage (in line with the Late Payment of Commercial Debts Regulations 2013). A gentle reminder may be all that your customer needs to pay, however, the further into the letter cycle you are, the more firm your tone should become in conveying the consequence of a customers’ inaction, which should hopefully spur them into paying their outstanding debts.
Include Adequate Details
Provide your customers with bank details, or who to contact if you can take payment by credit/ debit card, in your letters. You should also include contact details for who to contact if you customer has a query. Providing these details in a clear manner is essential to making it easier for your customer to pay you.
Be Polite
Ensure you word each letter carefully, remaining polite and professional but firm; inform them of consequences of their inaction, not threats; maintaining a polite manner is all in the tone of your letter.
We recommend calling your customer before sending any final demand. By doing this you can check that you have sent correspondence to the correct address and explain why the final demand is being sent, all of which could potentially save your business relationship before you may have to consider court action against them.
