How to Motivate Debt Relief Company Sales Staff and Not Screw Consumers

There is a very interesting conversation going on in the comments right now over on another post by Michael Boveee, Debt Relief Options for consumers – Is the delivery system broken?

The comments on appropriate staff motivation and compensation are very important to the success of the debt relief industry. Finding the appropriate solutions and balance to direct staff to conduct their job without selling consumers up the river is the mystery.

In my days of running a credit counseling group I admit this was a struggle for my staff as well. Staff members who never suggested our services when appropriate didn’t make the cut and those that went way overboard and “sold” consumers into something that was probably not right were asked to leave.

There is an incredibly fine balance in making sure that the debt relief industry and debt relief companies of all stripes, get this issue right.

No matter how perfectly balanced you believe a company is, there is constant internal bias for staff to oversell products. Even if you offer no spit or incentive for sales a staff member, in a natural desire to keep their boss happy, will do what they think needs to be accomplished. Generally that’s a focus on revenue and sales.

Putting up contests and tote boards only fuels this perception. Sales contests are the worst for leading to short term gain but long term company damage.

For a brief period of time my sales team or intake counselors were compensated on sales performance. It was a nightmare. The moment we did this as an attempt at motivation the number of refund requests went up and client satisfaction went down. We did away with that approach. There was no apparent way forward with this and it tipped the scales out of balance.

On the other side we had staff members that were afraid to tell consumers about services because they were afraid of telling them about something that might cost money without any concept of how their salary was funded. Rather than get the person in trouble the specific assistance they needed they would do nothing to effectively help them and send them on their way.

See also  I Was a Bait and Switch Debt Relief Sales Person

For me, the optimum balance came down to making sure the focus was on doing no harm to the consumer. If a consumer felt they were not happy for any reason we issued prompt refunds and tried to assist them to find the help they were looking for. There is absolutely no upside in holding an unhappy customer hostage. If it does not end well for the consumer, it’s not going to end well for the debt relief company.

We also learned to maintain a constant focus on making sure it wasn’t the sale that was made but that the “best” solution was presented to the consumer, even if it was one we did not provide.

This included regular monitoring of calls by staff to potential clients. It was always a painful process but a necessary one.

From the nonprofit credit counselors to aggressive for-profit debt relief companies, every cog in the debt relief industry deals with these issues. They plague us all and finding the best solution and balance is part of the magic formula for a brighter debt relief industry.

I’d love to hear your experiences and opinions on this as well. Have you discovered the magic formula?


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4 thoughts on “How to Motivate Debt Relief Company Sales Staff and Not Screw Consumers”

  1. Steve, based on my experience managing a large settlement operation in the early 2000s, I can say with certainty that this is a very difficult problem to solve. Direct incentive compensation creates the problem of signing up people unsuited for the approach, whereas a straight salary removes any motivation to work hard at enrollments, etc. In my opinion, one possible solution would be to create a company-wide incentive system, where the enrollment/counseling staff are treated as a whole, and if the department makes its goal there is bonus income to be enjoyed. This also creates a team atmosphere, which is what you want. Of course, top performers will always grumble about this arrangement, but there is no perfect solution. Also, what is imperative, and I believe has been sorely lacking in many larger settlement operations, is a rock-solid quality control function. We used to call it “underwriting,” to take a page from the insurance industry. But I think a better analogy would be the QC function in manufacturing. The quality manager has a lonely position, since he/she has to resist a lot of pressure (including management pressure) to sign off on the product so it becomes shippable revenue. Translating to debt relief, a QC function needs to have final authority of approval/rejection of a client’s application based on suitability analysis. Combining a team incentive approach with good QC would go a long way toward solving the problems associated with client intake in this industry.

    • Excellent point, an overall measurement of client satisfaction for general bonuses or rewards by someone that isn’t pressured or is independent. As far as I’m aware the most comprehensive set of client satisfaction numbers put out is from Cambridge Credit Counseling. Here is their latest report.

      And then of course you have issues with some regulations regarding additional compensation based on performance.

      It would be wonderful to see other commit to public transparency as well.

      • To take a point from Charles’ observation. The insurance industry commission structure could be a good start. Pay a small incentive commission upon enrollment, but then those clients go into their “book of business” which would lead to additional income as the client progresses through and is successful in the program. It ties the employee’s success directly to the consumer’s success.

        Restructure the company’s departments to fit this system… . Is there really a need to always separate sales and negotiations?  If a consumer was sold on the program by the same person that would be tasked with settling their debts throughout, it would lead to a much better intake system and a better informed consumer.

        Ultimately though, there is no way to teach someone that is motivated by feeding their children how to truly differentiate between the different options (DS, CC, or BK). The only way to truly fix the problem is for DS and CCA’s to build a better product that is more suitable for a larger base of consumers.

        I don’t care what anyone says… any program that has a 33% success rate (at best) is a failure and needs to be fixed immediately. Come on, you need at least a 65 to graduate from high school.

        • Steve, great subject.
          Andy, there is a reason your like to comment ratio is what it is. You make great points. You do so here.

          One of the issues in nonprofit credit counseling is incentive compensation. It’s a no-no. IRS field auditor guidance specifically instructs to look for that.

          I agree that methods for management to recognize counselors for performance and best practices should be the priority. Retention/Attrition scales for compensation would work wonders in the settlement space and a version of it would be effective in the CCA space too.

          Building a better product and delivery system will be what defines the industries future. This effort should not just include for profit and nonprofit, settlement and management, but also attorneys.


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