5 Magic Phrases For Debt Collection Negotiations

Turner Clifford

6 Jul 2022

Turner Clifford's 5 magic phrases which can be used for influence and impact during debt collection negotiations.

Phil M Jones has helped to inspire this article with his book, "Exactly What To Say", where he provides his magic words for influence and impact. Phil's book is predominantly aimed at the sales process, however, in our eyes, sales and debt recovery are extremely similar when it comes to negotiation and influencing. That's why we have taken inspiration from Phil's book to come up with 5 of our very own magic words when it comes to influencing customers in a debt recovery scenario.

Obviously . . .

This is such a powerful phrase when it comes to influencing a customer to see things from your point of view. Using the word "obviously" conveys to the customer that this is something that you think they should already know. This makes the listener drop their guard and take on board what comes next. "Obviously" helps to bring the message from a position of authority and allows what comes next to be more easily digested and accepted by the listener. This helps to set the conversation up and provides the perfect platform to be able to deliver a strong follow up message:

"Obviously, any failure to adhere to what we have agreed today will result in further recovery action being taken". "Obviously, any legal action may have an adverse affect on your ability to obtain credit in the future".



You Have Two Options . . .

This phrase helps to ensure that you have control of the conversation, and it works on a number of levels. It shows the customer that you are setting the tone, but (and here's the important part), it gives the customer the control of the outcome.


The key to making this work is how you deliver the following options. Your aim here is to frame one of the options as being a much less attractive way forward than the other. This helps to guide the customer to the option of least resistance (the one you want them to choose).


"You have two options. You can continue to ignore our payment demands which will result in further recovery action being taken against you. Or you can set up a suitable payment agreement with us to clear the amount owed in a sensible timeframe".



If. . . Then . . . This is one example that Phil gives in his book, but it's just too good to leave out. Phil says that our listening patterns and belief systems are all pre-programmed and hardwired throughout our childhood. These conditional statements were delivered to us all in our childhood, and they continue to go on to impact our decision making in our adulthood. If/then statements enable you to provide a clear outline of the consequences should any specific action not be taken.


"If we are unable to come to an amicable resolution by the end of the week, then regretfully we will have no other choice but to escalate this matter further."



What if we. . .


This is a great way of being able to build rapport with a difficult customer. Using the words "what if we" allows you the ability to paint a hypothetical picture to your customer, whilst at the same point showing a degree of flexibility. Sometimes you have to give a little to get a little back. We would always recommend trying to come to a sensible negotiation with your customer rather than allow a situation to escalate into a total loss. This is a great way of exploring hypothetical scenarios between both sides to see if you can hammer out an amicable resolution.


"What if we agreed to settle this for a 20% discount and walk away now?" "What if we agree that you pay this debt in full and we give you an extra 3 months at the end of your subscription?" What's stopping you . . .


Many sales gurus talk about "discovery" and the art of identifying pain points that potential customers are encountering in the hope of being able to offer a suitable remedy. The very same principle can be applied to the debt recovery process. Discovery is just as important here as it is in the sales process, and it is imperative that you ask the right questions in order to build up a clear picture of the problem.


Customers fall into three categories. Will pay, won't pay, can't pay. Your job is to work out which one of these buckets they fall into as quickly as possible so that you can help propose actionable solutions. Using a sentence opener like "what's stopping you" gets straight to the point. This direct line of questioning, ensures one thing. A direct response. And this is something that we can work with. What's more, this opener can often lead into the example given above for a really effective close. "What's stopping you from making this payment today?" "Unfortunately we don't have the ability to pay the full amount". "What if we agree to put a payment plan in place over the next 3 weeks as long as the first payment is made today?"


Regretfully, there is no silver bullet in debt collection but hopefully these negotiation tips can help to sharpen your collection skills.