Persuasion: A Framework for Credit and Collection Executives

By David Schmidt

If you are in credit and collections, there are plenty of situations where you need to be persuasive. For example, trying to collect from a past-due customer or explaining to sales why you cannot justify the credit limit they have requested for a new account. In fact, everything you want or need to accomplish as a credit executive resides on the other side of persuasion. Unless you ask for something, chances are you won’t get it. In credit and in life, you increase your chances of realizing the outcome you want by being persuasive.

All of us use persuasion, but we don’t always use it in the same way in the same circumstances. That’s because how we use persuasion is both innate and situational. Some people have a predisposition to persuade others. For instance, the neighbor or co-worker who always seems to get what they want. Others don’t let their persuasive powers kick in unless there is something they really want or they feel pressed for time.

While our personalities often dictate how we use persuasion, circumstances will often change the approach we take. With a rambunctious child in a car during heavy traffic, even mild-mannered parents often become very assertive. After all, safety is a significant motivator. Typically, the passive parent relies on providing guidance or modeling the behaviors they wish their child to adopt. Other people have more aggressive personalities and tend to be domineering and so force or direct their children -- as well as others -- to do what they want.

Both extremes involve manipulation. Forcing and directing behaviors can be both overt and covert, and often harmful regardless of intention. The passive approaches of guiding and modeling can also be demonstrated knowingly or unknowingly. It is, therefore, important to be mindful of how you exert influence and how caring and time can affect the approach you adopt.

Developing persuasive skills, with the goal of achieving win-win outcomes, is empowering. By exhibiting clear intentions and focusing on the stakeholders' needs, both yours and theirs, you can become more persuasive. What follows is a framework for understanding persuasion that will help you refine your abilities.

Aggressive Approach

The aggressive approach to persuasion is characterized by a dominant and assertive communication style that seeks to impose one's ideas or preferences onto others. People employing this approach may not always be aware that they are being aggressive in their communication style.

Examples of the aggressive approach to persuasion include:

• Micromanagement: A boss who exhibits a "my way or the highway" attitude and imposes their instructions on subordinates without giving them autonomy or considering their input.
• Dominating conversations: Interrupting, talking over others, and disregarding their opinions or ideas in an attempt to assert one's viewpoint.
• Imposing strict rules: Enforcing rigid guidelines and expecting others to comply without question or room for negotiation.

The aggressive approach to persuasion is often seen as harmful because it disregards the perspectives and needs of others. It can create a negative and hostile environment, lead to resentment, and damage relationships. Even if the intention is not malicious, the aggressive approach rarely results in a win-win situation.

Passive Approach

The passive approach is characterized by a more subtle and indirect communication style that aims to influence others through example or suggestion. Like the aggressive approach, the passive approach can be overt or covert depending on whether the influencing behavior is intentional or unintentional.

Examples of the passive approach to persuasion include:

• Leading by example: Demonstrating desired behaviors and hoping others will follow suit based on observation and emulation.
• Offering gentle suggestions: Providing subtle hints or recommendations without explicitly stating what others should do.
• Indirect influence: Creating an environment or setting circumstances that encourage certain behaviors without directly instructing or requesting them.

The passive approach to persuasion can sometimes be effective and well-received, depending on the situation and the receptiveness of the individuals involved. However, it also has its limitations. Being too passive may result in a lack of clarity or assertiveness, leading to ambiguity or confusion about expectations.

Assertive Approach

It's important to note that both the aggressive and passive approaches to persuasion have their drawbacks. The ideal approach lies in the middle, known as the assertive approach, which is a balanced and effective method that seeks to influence others while respecting their rights, needs, and opinions. It involves clear and respectful communication, active listening, and a focus on collaboration and mutual understanding. The assertive persuader aims to achieve win-win outcomes by finding common ground and addressing the key concerns of both parties involved.

Key characteristics of the assertive approach to persuasion include:

1. Respectful Communication: The assertive persuader communicates with respect, treating others as equals and valuing their perspectives. They avoid aggressive or passive behaviors and maintain a confident and composed demeanor.
2. Active Listening: Listening is a crucial aspect of the assertive approach. The persuader actively listens to the other person's ideas, concerns, and preferences, demonstrating empathy and understanding.
3. Clear Expression of Ideas: The assertive persuader presents their ideas, arguments, or proposals in a clear and concise manner. They support their points with evidence and reasoning, making it easier for the other person to understand and consider their perspective.
4. Openness to Feedback: The assertive persuader is open to receiving feedback and constructive criticism. They view feedback as an opportunity for improvement and refinement of their approach.
5. Collaboration and Compromise: Instead of imposing their views, the assertive persuader seeks common ground and looks for solutions that benefit both parties. They are willing to compromise and find mutually acceptable agreements.
6. Confidence and Self-Assurance: The assertive persuader exudes confidence in their ideas and abilities but without arrogance. Their self-assurance inspires trust and credibility in their message.
7. Goal-Oriented: The assertive approach is focused on achieving specific goals or outcomes while ensuring that the other person's needs and concerns are taken into account.
   
   
   

   Source: How to Persuade by Michelle Bowden, Page 40

   The assertive approach is often seen as the most effective and respectful way to persuade others. It fosters positive relationships and creates a sense of trust and cooperation. By actively listening, expressing ideas clearly, and being open to feedback, assertive persuaders can build rapport and understanding, increasing the likelihood of successful persuasion and achieving mutually beneficial results both short and long-term.

   Key Persuasion Indicators

   Because persuasion involves communication, there are two sides to the issue. It is, therefore, important to not only understand how to communicate persuasively but also appreciate how you are being perceived.

   There are four sets of key persuasion indicators that represent different aspects of persuasion that individuals prioritize to varying degrees when being persuaded. These sets represent different focuses people have when being persuaded, and understanding one's primary and secondary types can help in developing your own persuasive abilities. In addition, understanding these sets helps in the tailoring of persuasive approaches to effectively address the needs and preferences of your target audience.

   The four sets of key persuasion indicators are as follows:

   1. Rationality and Logic - This set focuses on whether the argument or perspective presented makes logical sense and is supported by solid reasoning and evidence.
   2. Credibility and Trustworthiness - This set revolves around the perception of the persuader as an authority figure in their field, someone who is knowledgeable, trustworthy, and deserving of respect.
   3. Kindness and Acceptance - This set emphasizes the importance of emotional connection and empathy. It involves caring about the needs and feelings of the other person, creating a sense of goodwill and warmth.
   4. Captivation and Enthusiasm - This set centers on the persuader's ability to captivate and inspire others through their confident presence, magnetic personality, and contagious enthusiasm for their message.

   Practical Application

   To conclude, consider, in accordance with the principles of persuasion, the two credit and collection scenarios provided at the beginning of this article. In the case of the collector requesting payment of a past-due balance, to develop rapport with their customer, he or she needs to respectfully request payment, be prepared to share documentation of the balance owed, and then be ready to listen to what the customer has to say. If the customer does raise some issues, the collector then needs to work with them to come up with a mutually acceptable solution, always keeping in mind that the goal is to get paid by the customer as soon as is reasonably possible. If this is a first-time situation, hopefully, the customer will appreciate the collector clearly and respectfully providing proof of the balance due. If the customer gets defensive, the collector needs to calmly explain why the balance is owed and the importance to the customer of restoring their account to good standing by paying in full. If there have been previous interactions, the customer is even more likely to respond positively if a relationship of mutual credibility and trust has been forged.

   Relative to the discussion of a customer’s credit limit with sales, the same principles apply. Because this is a co-worker, there should already be a relationship, It is likely that the two most persuasive factors with the salesperson are going to be the credit executive's rationale and the level of credibility and trust already established. Granted, sometimes sales may not be initially interested in your logic, but that’s where being considerate and understanding of the salesperson’s situation, on top of being confident in your own expertise, can turn the discussion away from confrontation towards collaboration.

   With the framework laid out in this article, you should now be able to better understand your own persuasive strengths and weaknesses. Using this context to work on your persuasive skills will not only help you get what you want but will also help you become more effective. That’s a confidence builder that will keep on paying dividends.

   Editors Note: The subject matter in this article was condensed from “How to Persuade: The Skills You Need to Get What You Want” by Michelle Bowden (Wiley, 2022).