Collection letters: least effective and most used

If two or three letters don’t work, why should four, five, or six be successful? There is no problem with collection letters per se; the problem is too many collection letters.

We were once hired by a business owner who was having major accounts receivable problems. It turned out that he had sent 13 collection letters to one debtor over the course of about a year. No wonder he was having collection problems.

It’s true that sending collection mail is quick and easy.   And, even better, you don’t have to confront your debtor.  But it buys the debtor time and we all know by now that time is the weapon of the debtor. Collection letters also have some other serious shortcomings:

• Collection mail is only a one-way communication.
• You don’t know if the debtor got the letter.
• You don’t know the debtor’s reaction.
• Letters can only attempt to motivate a customer to pay their debt; they usually don’t uncover reasons for nonpayment.

Suggestions for better collection letters:

1. ŸShorten your series to two or three letters.
2. Send letters out ten to fourteen days apart rather than thirty days apart.
3. ŸInclude return postage-paid envelope
4. Compose letters carefully — short/simple, set a deadline, clearly state consequences
5. ŸDistinguish the envelopes used for successive mail­ings.

• Use different colors and sizes. Pink or red are the most effective colors. (Many debtors wait until the envelope turns red, so start off with red.)
• Change styles frequently.
• Hand write.
• Don’t put your name on the envelope.
• Write on the outside of the envelope. (Example: “Personal and Confidential”)
• Use “Address Correction Requested.”