How to Market a Collection Agency

Cold calling is one way to market your collection agency

Collection agencies collect debts for various businesses, such as finance companies, furniture dealers, banks and even hospitals. Owners of collection agencies usually charge a percentage of between 35 percent and 50 percent of the amount collected. Collection agencies usually collect the money, subtract their fee and pay the rest to their client. It is not difficult to start a collection agency. Many people work from home. Once you understand the various procedures of the business, there are numerous ways to effectively market your collection agency business.

Things You'll Need

• Business cards
• Sales letter
• Brochure
• Magnet or calendar with business name
• Website
• List of new businesses

Instructions

1. Come up with a catchy logo and have some business cards printed. Create a convincing sales letter that highlights the benefits of dealing with your collection agency vs. other competitors such as personalized service. Create a colorful brochure that explains how your company goes about collecting money from people. Include a price list that shows percentages you charge depending on how long an account is past due. Get the sales letter, brochure and price lists printed.

2. Take out a copy of the local yellow pages and start calling businesses, such as attorneys, physician and dentist offices, banks, finance and loan companies, furniture and appliance dealers and various other businesses that typically finance merchandise for people. Spend several days cold-calling and setting up appointments with businesses. Visit the businesses and try to get some initial accounts set up.

3. Get a list of new businesses from the local chamber of commerce. Mail your sales letter, brochure, price list and business cards to these businesses. Include a useful item or keepsake, such as a small calendar or magnet with your business name and phone number on it. Add a separate note for the gift and congratulate the business owner on their new business. Tell them to keep your name on file should they ever need a collection agency.

4. Decide in which other areas you want to market. Go online and find the phone numbers for the classified advertising department of major newspapers in those areas. Place classified ads in several newspapers under "Business Services." Run these ads for several weeks as a test. When businesses call you, ask them where they saw your ad so you can measure the success of your advertising. Drop newspapers that do not pull responses. Add other newspapers. Advertise in a few national newspapers such as USA Today or The Wall Street Journal.

5. Create a website or have one created for you. Pick a catchy domain name through godaddy.com that includes "collections" or a word that relates to your business. Advertise your collection agency on craigslist.com and through Google's advertising program. Place your website URL in various search engines, such as Yahoo.com, Google.com, Alta Vista.com and Lycos.com.

Tips & Warnings

• You can also create a Power Point presentation or print a handout of the presentation to business owners as you visit them in person. The key is to convince them to use your service. Make sure you have all necessary licenses as this can be a determining factor that savvy business owners look for in a collection agency. Finally, start small and build your business gradually. Hire people as your business expands.

References

• Howtoadvice: Your Own Recession-Proof Collection Agency

Resources

• Vista Print: Collection Agency Resource