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Hostage Negotiation Tips And Techniques For Effective Debt Collection

May 31, 2017 at 1:37 PM

Negotiation is a common activity in our daily lives. It’s human nature to try to influence others to achieve a better or advantageous outcome for ourselves. It’s ultimately an exchange of value. And if done well, it can leave both sides feeling like they’ve won.

In my practice area of Collections & Recovery Solutions, negotiation is a critical tactic used in every engagement with a debtor. In fact, it’s so critical and core to the success of a Collections organisation that it merits a discussion with the ultimate negotiator to see if there are tips and techniques that can be learned and applied in Collections.

With this objective in mind, I contacted a former hostage negotiator from the South African Police Service (SAPS) and had the pleasure of spending the morning with him a few weeks ago. In this blog post, I’ll outline some of the key techniques learned in negotiation from a hostage negotiator and how they can be applied to achieve significant lift in your debt collection outcomes.

Create an effective structure for Strategy Design and Execution

In a hostage negotiation, the structure is clearly divided into two parts.

1. Strategy Design

Gathering and analysing of information (data) received in order to determine the solution (strategy) with the best possible outcome. Recording of all communication and actions (Scribe) and informing stakeholders (media) of the progress and outcomes.

In a hostage negotiation, you typically have a Primary Negotiator who engages with the captor and a Secondary Negotiator who monitors the negotiations and gives feedback to the primary negotiator regarding the use of skills, inflection, tempo, trigger words, and interpretation of messages given by the captor. The Secondary Negotiator further feeds the Primary Negotiator with information (data) to assist and drive the strategic intent.

2. Strategy Execution

In terms of strategy, the First Negotiator is responsible for execution of the following:

  • establishing contact with the hostage-taker and engaging in the negotiations;
  • putting the hostage-taker at ease and thereby making resolution of the problem imminent;
  • maintaining open communication;
  • eliciting useful information, and
  • achieving safe surrender of the hostage-taker with dignity.

Hostage Negotiation structure is made up of two parts - Command Post and Negotiation team

Looking at typical hostage negotiation structure, it is quite clear that there are many similarities between it and a Collections Call Centre structure, especially taking into consideration the importance of data and the analysis or interpretation of data.

Visit our solutions page for Debt Collections & Recoveries Solutions.

In summary, both hostage negotiations and debt collection negotiations require a clear structure where data is gathered, interpreted and analytically utilised to drive the strategy.

In both types of negotiation, the primary negotiator or collection agent, executes the strategy of the team or organisation, and therefore fulfils the role as primary contact with the hostage-taker or debtor.

Key Principles and Techniques for a successful negotiation

We’ve looked at structure. Now let’s look at the principles employed in hostage negotiations and consider the similarities between these and those in debt collection. The one main common objective between both types of negotiations is to build trust and rapport. These are key in the ability to influence the outcome. Many of the principles and techniques below support this objective.

  • Seek to understand. Actively listen and ask open ended questions. In other words, effectively assimilate and understand the person's situation and perspective, listen to what is actually being said and interpret the various underlying meanings and messages.
  • Be conscious of both verbal and non-verbal language. 7% of what we communicate is in what we actually say. The rest is communicated in tone and body language. The majority of the time, you will be negotiating via a telephone so you don't have the advantage of being able to witness body language. On the phone, listen for tone and inflection, and use them to assess the person's mood, intentions and state-of-mind. Use this to distinguish between content and feeling, i.e. understand the difference between what is said verbally and what message is really being given.
  • Show them that you are listening. Repeat what you've heard them say to summarise and ensure you understand their situation. Use encouragers such as "ok", "right", and "uh-huh" while they are speaking to let them know you're listening - this is especially important on the phone.
  • Show empathy and respect. Show understanding of the thoughts, feelings and motives of the person. This can be achieved in the following ways: allow (encourage) the hostage-taker to ventilate; be honest, upfront and sincere; and avoid a critical tone.
  • Work together on a solution. Make them feel like you are on their side and there to help by building a "we-them" relationship. Orient the conversation to problem solving, but avoid telling them how to solve his/her problems; and divert any negative train of thought.

Follow these tips and techniques, but beware of the potential for a "reverse" Stockholm Syndrome in call centres - if an agent begins to feel too much compassion for a debtor it could diminish their ability to collect.

In Summary...

Listen to understand and show empathy and respect to the individual and you will build the trust and rapport to achieve the outcome you desire. I urge you to watch this short TEDx session by police hostage negotiator, Scott Tillema, who shares his experience and the secrets to successful hostage negotiation.

In my next post we'll look at the Call Centre Agent and their similarities with the Primary Hostage Negotiator, learn how to utilise your agents’ “brain dominance”, the danger of "reverse" Stockholm Syndrome for Collection Agents and how to mitigate these symptoms, as well as verbal hostage negotiation tactics that can be utilised in collections negotiations.

Find out about our on-demand Debt Collection training courses offered by our Credit Academy or visit our home page for an an extensive range of analytics tools to improve effectiveness of your call centre and debt collection teams.

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Image credit: Columbia Pictures film "The Taking of Pelham 123"

Perry de Jager
Perry de Jager
Perry has been involved in Collections and Recoveries for the past 12 years, spending time in different market segments ranging from law firms to investment companies. At Principa, Perry has worked on extended projects within both South Africa and the Middle East with some of the largest financial organisation, providing on-site consulting within the collections and recoveries space covering strategy, process, people and technology.

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