"We've had more sales success during collections than under many other circumstances," observes one veteran bank manager. "We try to make a positive out of a negative. When an account is overdue, an effective approach is to mail a gentle reminder in the form of a return envelope that has a postscript asking if there is an unusual situation or problem. I'll follow that up with a more strongly worded request for payment or explanation.

"If that doesn't work, I'll look up the person's payment history and call. Knowing the individuals helps a lot. Sometimes pride prevents people from immediately telling us what's wrong. I'll invite trust by saying something like, 'John, what's the problem?' If the customer's payment history has generally been good and the problem is temporary--such as being sick or out of work--this would be a good time to offer to expand the loan. The payments would be lowered, but the duration of the loan would be extended."