Steven Dietz

Southwest Recovery Services is a professional collections agency service. They work with all kinds of business to help them collect the money they are owed for their customers. No business should have to provide a provide a service without being paid. Southwest has several locations in Texas, including Dallas, Houston, San Antonio, and Houston. They also have an office in Oklahoma City as well as St. Louis.

Southwest Recovery Services works hard to get in touch with your clients and collect your unpaid money. They will begin with the information provided by the client, but they can also software to find updated information. They also have industry specific solutions such as apartment collections, commercial debts, retail collections, medical collections, utility collections, and government collections.

Southwest is a contingency collections agency so they can help you collect your unpaid money, but clients will only pay a percentage of what we end up collecting for them.

Steven Dietz is currently the President of Southwest Recovery Services and resides in Dallas, Texas.

Where did the idea for Southwest Recovery Services come from?

The idea to start the business out of happenstance. I was working as a collection’s manager and a credit analyst for a furniture store. I did very well there and was promoted up the chain of command a couple of times. I moved into a role in the corporate office and was being groomed to take over the credit analysis position from a gentleman that was going to retire. I was working hard with my nose to the grindstone, but like a lot of companies, it got bought out. That career pathway was eliminated. The company that bought the furniture store was Aaron’s Rents, and Aaron’s motto was if you can walk in here, you can rent from Aaron’s. They really didn’t have a credit analysis or credit manager type position. I did stay on with them and moved into a collection’s role.

I was very good at the collections end of it because I knew what I was looking for when I extended credit. If I extended credit to somebody and they didn’t pay, then I took that personally and I was going to either get my furniture back or you were going to pay me. I was just in a straight collections role with Aaron and even got bored, so I started looking into the computer system a little bit and found an area in our store that had it’s own P&L and I found a section in there that had written off bad debt. I asked the store manager and he said, “Sure go ahead, take a crack at it”, so I started collecting so much money out of the bad debt for the store that it got the attention of the owners of Aaron Rents. The owner’s son flew out to Dallas to see what was going. He scheduled a meeting with the store manager, whose name was Scott, because they thought something was wrong. Scott got paid on profitability of the store, and this store was doing better than all the other ones in the country. There were several hundred of them. They thought somebody was cooking the books, so they came in and started asking questions. They did not think it was possible to be booking this much money up and above the historic. They even brought in an auditor, and they found that legitimately we were collecting bad debt and that was really a key to the store’s success.

The owner’s son came back out and met with me and the store manager and offered me an opportunity to fly around the country and go to the different stores and train the existing collections staff on what I was doing. Being all of 20 years old, I thought that was pretty cool. I got to wear a suit and a tie and got to get on the airplane. I had an expense account and a company credit card. I really thought I was a big deal. I did that for a couple years. Then my wife and I had a child and I was gone a lot, so I started missing opportunities to be a father, the first steps, the first words. I was a road warrior and that was taking a toll on me as a father.

I talked with the regional manager who I reported to said, “Ed, I can’t do this anymore. This is taking a toll on my family, and I’m missing out on things that I can’t ever get back.” Ed talked with the owners of Aaron’s Rents. They wanted me to continue on as a consultant and ultimately that turned into an opportunity for me to start my business because they gave 119 of their stores to do outside collections for, so I started a collection agency. I got licensed and bonded and started in the company in 1996 when I was 26 years old. The accounts with those Aaron’s Rents stores were cornerstone of the getting the business off the ground. They were our cornerstone client. Over the years I’ve learned different lessons, life lessons and business lessons. The company has grown, especially in the last few years, with the onset of a couple of executive level hires. We are stable and doing very well, but I still say the start of the company was by sheer accident and happenstance.

I credit my success to not taking no for an answer. I look at things a little bit differently than others. You can’t be a good salesman if you are not a bullshit artist. Good salesmen are able to connect. Good salesmen are able to listen. Good salesmen pick up on key words or key phrases that you are telling them while they are asking you questions and then they offer suggestions based on where they think you may go. Collections is a lot like that. I tell people although the time that collections is not rocket science. It’s really just sales in reverse. If you’ve already bought something and haven’t paid for it, my job is to sell them into paying. I use a lot of the same tactics and the same processes or the same negotiation skills from the sales platform. Sun Tzu’s The Art of War is very instrumental in learning the tactics of negotiation and strategy. Really, it boils down to listening. You would be surprised what you can learn about a person if you take the time to listen. If you are listening to the person and offering them a solution to their problem, and not obstacles that they feel like they can’t overcome, you don’t paint them into a corner. You are an adversary when you paint them into a corner and that’s when you hear the phone hang up and the line go dead. But if you can try to offer them solutions and hope. Nobody likes being in debt. Nobody likes phone calls from collectors. The collection industry as a whole has a terrible reputation. Many times, you hear an ad on the TV about a bankruptcy attorney, those harassing collection calls, it has a bad name. I found very early in my career as a collector that to be successful at it, you needed to take a different approach. I can bang my hand on the table and raise my voice, but the hair on the back of your neck is going to stand up at that point and you’re going to fear me and you will never give me your credit card and never pay me if you fear me. However, if I listen to your problem and then offer you solutions, I’ve offered you hope, and I’ve offered you a way out. Then I can lead you down the path that I need you to go down, which is to come up with a solution to pay my client. Again, it’s not rocket science but a learned skill that I have picked up over many, many years. Language and words mean things. If you take the time to listen to what somebody is saying, you can pick up on ways that you can help that person get out of what they fear the most. It’s sales in reverse. It’s not rocket science. I have no special skills. I’m not Superman. I’m not Spiderman. However, I do like Wonder Woman. It’s a learned skill that I picked up over the years. I don’t take no for an answer.

If you had my furniture, I was going to get it back from you. The only time I was ever shot at, I was 21 years old. I went to go repossess a television from Reverend Ray. Texas at the time had a law that if the individual opened the door, that could be construed as an invitation of entry, so I always wore a pair of steel-toed boots and when they opened the door I put my boot in the crack so they couldn’t shut the door. I did that and I told Reverend Ray why I was there, he turned around and made a beeline for his bedroom. I knew what he was doing. I’m a Texas boy, corn fed, hunter, fisherman, outdoorsman. He was going to get a gun. I turned around and went as fast as I could to get into my pickup truck and as I’m pulling out of his driveway and turned the truck to my right-hand side, my driver’s door was facing his front door, and as I put it into gear to take off, he had made it back to the front door with a 357 revolver and he pulled the trigger three times. Luckily, I only had some stray bullet fragment that had frayed off and got into my side and into my flank on my back. It burned me. I still have the scars from it. But thank God he didn’t put the bullet through the window. The window in a truck door, that’s all hollow. He didn’t miss by much, but he put one of the bullets into the frame of the cab.

That was the last time that I attempted to repossess furniture. I said, if they needed it that bad, then we’ll go through the legal system. We started using the Justice of the Peace (JP) courts and judgments and writ of possessions and court orders. That is how I learned the ins and outs of the Justice of the Peace courts in Texas and how that works. I use that with my clients as well when we have bigger cases. We use those tactics and learn a lot of industry verticals and specialty things that you say or you do. You don’t collect a medical debt the same way you collect a transportation debt. They are not the same. They are the same in principle but they’re not the same in tactics.

If you can get somebody laughing and talking to you and you get into a rhythm with them and you get off the subject of the debt, you start leading them down the path of not thinking that you are a bill collector, you are just a personable friend, or somebody that can help them resolve a problem. You will be surprised how much more apt somebody is to cooperate with you.

Considering that our medium is the phone, how quickly can you lose the confidence of somebody by pushing a button on your phone. I started this business before there was caller ID and people would pick up the phone. Now, you can block phone numbers and the caller ID says you can’t send a call in my industry without identifying who you are. You’re a lot less likely to be successful at what you’re doing with today’s technology in how the phone and telecommunications has evolved with a cell phone. You are basically holding a handheld computer. If you do make that contact with somebody, you need to make it count because if you piss them off or you’re adverse or condescending or you have attitude or you’re not in the right frame of mind, that’s likely the last time you’re going to talk to that person because they can block your number and your company name is being displayed on the caller ID. You have to make each contact with that individual count.

That’s how I train my staff. I learned it from the group up and when we bring people in, we put them through training. Our phones are recorded so we take a lot of phone calls that I make and have had with people over the years and we play them and role play. I explain to them why that worked and why I did what I did. Why, when that person said that, I said that. We’ll go through a couple days of role playing with audio recordings that we pull out of the system over the years and try to teach them my way.

What does your typical day look like and how do you make it productive?

The typical day is me starting at about 6 am, working the bank reconciliations and getting the office opened up, and making sure the networks are online and ready for the employees to show up. The staff trickles in between 7 and 8 o’clock. At 8 o’clock it’s time to rock. That is the saying around here. It’s time to get on the phones. The staff gets on the phones. We have inbound calls that come through with people with credit reporting issues and customer issues and things like that. The staff is making outbound calls, trying to negotiate. One of the key phrases that I use and tell people all the time: We negotiate, we don’t intimidate. They get on the phones and they’re making outbound calls, dialing for dollars, if you will. At 8 o’clock it’s time to rock. They get on the phones and start making attempts to collect debts.

Throughout the day we have, just like any business, challenges that arise. During the normal course of the day, we’re doing many things. We call it As the Collection Agency Turns. Every day is different. Some days you’ll have somebody call in and they’ll just go off or they have an issue. You have a customer that’s not happy, and you need to stop the presses and fix something. No two days are the same. In the 34 years I’ve been doing this, no two days have been the same. There is no scripted reality show that we could follow. It’s rather lively. We try to keep a lively phone room presence so that people stay upbeat. When collectors are collecting payments, there is a bell that goes off. When they get a really big one, they get to get up and they’re able to smash a gong, like The Gong Show. We have one hanging like that, and they get to take the mallet and hit the gong. We try to keep it energetic. The staff seems to like it and they stay motivated because they want to be the next person up to the gong. They want the bell to ring with their name being announced. It’s a busy call center.

How do you bring ideas to life?

Most of the ideas that I have pop into my head during quiet times and a lot of that happens during the daily commute. Things that are conceptualized are brought the weekly staff meetings and they get bounced around. I collaborate a lot with my staff because although I may think I have a good idea, somebody that actually has to put it into practice may find that it’s flawed, and so we do a lot of collaboration. We do a lot of round table discussion here. Although I’m the owner, I rely on the input of staff because we’ve got people here that have more experience than I do at other companies. We have people here that have less experience but different backgrounds. I have found that using that experience and background and energy and drive, and if you pool that as a resource, you’re much better able to succeed because one person’s way isn’t always the right way.

What’s one trend that excites you?

I would say the overall growth of the business. We have been in a growth pattern for the last two years. Seeing growth of a business, 160%, 140%, 120% year over year, that excites me. It’s a challenge to run a business. It’s not for everybody and that’s why everybody doesn’t run a business. Each of us have roles. Some of us are bakers and some of us are plumbers and some of us are worker bees and some of us are business owners. I tend to enjoy and thrive on the overall growth of the business. The business has doubled and tripled in size over the last five years, and I find it to be satisfying to see the end result of the effort and the oil and the sweat and the tears and the aggravation. That is what excites me and drives me.

We don’t get paid unless you do. We’ll get a customer that calls in and they’re pissed. You haven’t collected anything. I’m like, well have you paid me? I’m the one losing here. What are you crying about? Get your tissues and put them back up on the shelf. You don’t need them. I’m the one who’s lost money here. Overall, we don’t get paid unless our clients do.

The growth of our business is based on what is collected and then we only take a percentage of what we collect. If somebody pays $1,000, on average we’re getting about $300 of that. If somebody pays $100, we’re getting $30. You can only imagine the sums of money that has to come through a company to be a $3 to $3.5 million a year business. It’s in the hundreds of millions of dollars at those rates based on the slice of the pie we get.

What is one habit of yours that makes you more productive as an entrepreneur?

Work ethic. There is nothing more important to a business owner than putting in the sweat and the tears. It’s my work ethic. I probably work 18 to 20 hours a day. I sleep 4 and work 18. I might spend a few here and there with family or on hobbies and things that I enjoy doing, but on average I don’t think I’ve put in less than a 12-hour day in 25 years. It’s work ethic. You can accomplish a lot more with persistence than you can with anything else. You have a lot of folks that are probably a heck of a lot more educated than me, but you probably won’t find too many people that work harder than me.

What advice would you give your younger self?

Don’t try to repo Reverend Ray’s TV. I’d damn sure go back and redo that one.

I’ll be honest with you, I think that I would have worked less and spent more time with my children and with my wife. This has been the only thing that I’ve done. I was only employed by two businesses and it was for a short period of my life after I graduated from high school. I have focused on this business and prepared for each day and each challenge and each adversity. This is my blood, sweat, and tears. This is my baby. I probably would, knowing now what I didn’t know then, I would probably go back and tell my younger self to stop and smell the roses. I don’t think anybody has ever going to say at the end of it all, gosh, I wish I would have worked harder or I wish I would have worked more. I think the opposite of that is true.

One of my favorite pictures in the entire world is up on my office wall, and I look at it every single day. I’m 22 years old and I have my firstborn son in my lap, and I look at that picture every day. Now he’s 28 and I have two grandchildren by him. It brings the most joy, of all the things that I own, this old tattered frame with a young man and a young woman with this little boy. I think I would have worked less.

Tell us something that’s true that almost nobody agrees with you on.

That I’m right! That’s easy! It’s as simple as that. I’m the boss. That’s it. Very simple. (Laughing). I enjoy being lighthearted. I am extremely handsome and always right.

I think a lot of people don’t see the genuineness of me because I come off as a jaded business owner or I tend to be intense while I’m here. I don’t think people really know my heart and my genuine feelings for my employees and my staff. I think they see me because of the role I play in the company as a hard-fisted business owner. Very few of the people that work here know the family man I am and the true heart that I have for my staff. People see me as the business owner. They see me as the CEO of the company. I keep them at arm’s distance for management purposes. There are very few people directly and know me outside the office. My heart for the people that work for me, my feelings and genuine gratitude that I have for the effort they put in to make the business a success, I think if you went and asked them, do you think Mr. Dietz feels this way? I don’t think they would say yes.

In fact, we made it through this COVID-19 shutdown and everything and I brought everybody into the conference room, over 60 people in there, and I told every single one of them that we were going to have to close the doors, but I don’t want you to worry. You’re not going to be hungry. You’re not going to be thirsty. We are going to get your paychecks to you, and I did. It was the hardest thing I ever had to do was to fight with the SBA and fight with the bureaucrats to get that CARES Act and the PPP so that we would make it through that turmoil, but I did. I stayed up for 72 hours straight, calling every single Senator and every single Congressman and every single state representative and every single political affiliated person in the state of Texas until I finally got somebody to get me to the Department to file a complaint with the bank, and within 24 hours after that I was funded. I did. I stayed up 72 hours straight working the phones, trying to find a solution to the problem that all the other small businesses were affected with, which was the banks were not cooperating and processing applications to the SBA. I got mine under the wire, probably about 18 hours before the funding was cut off on the first round of PPP money. I say what I do. I do what I say. When I made that commitment to my employees, even though it would have come at a great financial loss to the business, I meant it.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Learn from your mistakes. I make 100 of them every day. I tend not to make the same twice. Be flexible. Pivot. Don’t be rigid. Seek answers and ideas and opportunities from others around you because you are stronger together. Really listen. If somebody has a problem, try to help, try to be a solution, not an obstacle. It really solves a lot of things if you can listen and try to help people. Be helpful when you can. Try to be somebody who can solves problems, rather than make problems.

What is one strategy that has helped you grow your business?

I really can’t take credit for it, to be honest with you. I was fortunate enough to be put in the right place at the right time and an executive with another company that closed down here in the metroplex knocked on my door one day and asked if I had any time to talk with him. Fortunately, the answer was yes. I could not afford him at the time, but we put together an incentive package that he agreed to, and he has been with me for about four years. He has been the key to the success and the growth of the business. I wish that I could take credit for it, but really all I do here is sign the checks. He has made all the difference in the world and has helped to grow the business.

When people notice our growth and that we have relocated into a 6,000 square foot call center corporate facility and all new furniture, etc., I say, I can’t take credit for any of this. You need to go back there and shake that man’s hand because he has been instrumental in the growth of the business. He really an old school philosophy about the way debt is looked at and is monitored. To be honest, I fought him tooth and nail because being the CEO of the company, it’s my way or the highway. He is a devout Christian and he chipped away at me and chipped and chipped and chipped, and he was never discouraged. He was never downtrodden. He was always polite. He always let me step in the mudhole or the puddle and get my shoes wet and let me do it my way. Over a period of time, it was always revealed to me that I was wrong, and he was right. He was a very patient man with a hammer and an ice chisel, and he just chiseled and chiseled and chiseled until he got through. Now, if he says he needs to do something, we do it. He’s been a wonderful addition to the company and quite the mentor to me individually. JD was a great hire and it’s his strategy and the way that he works the business that created the growth. We used to throw it all up against the wall and see what would stick. That is not what he does. He scores the accounts. He looks at every single account that comes in the system and he looks at a multitude of factors, credit score, delinquency, derogatories, job history. He has intuition about how an account will react once it is activated and put into collections. He knows the strengths and the weaknesses of the staff. He listens and monitors phone calls and cans see here is where they fell, here is where they tripped, here is where they stumbled, and he coaches them. He provides them with insights about how he would have done it. Some of the people that have been most successful here have really learned from his insight and used him as a resource and they are making more money than they ever have in their entire life.

Because of the growth of the business, we have been able to add robust employee benefits and thus attracting and keeping better quality employees, even to the point that we had another executive level person that came to work for us from another business in the Dallas/Fort Worth area, and she has made a big difference in the business as well. I was in the right place at the right time to be able to hire those executive level employees that have made a huge difference.

What is one failure you had as an entrepreneur, and how did you overcome it?

As an entrepreneur, you fail more times than you succeed. I believe an entrepreneur has a maverick spirit. They are not afraid of failure. You know you are going to fail, but you do it anyway, and you learn from that. Then you don’t do that again. I would say probably the management of growth is key. When you start sitting on a surplus pile of money, what do you do with it? How do you reinvest it into your business? You invest in yourself. In my 30s, I invested in myself. I thought it was important to have a nice car. I thought it was important to have a $600,000 house. I thought it was important to have a fancy boat. I overtaxed the resources of the business for personal needs because I thought people looked at me through the lens of material items. That something that only maturity and time will teach a person. I think the stewardship of a company’s resources is the key to longevity. You can learn that in school if you get a fancy education and you have a bunch of letters after your name, or you can do it through trial and error. Those bumps are hard, and they hurt. You fall down a lot and you get shaken, but if you get back up and you steer the ship and you learn from those mistakes and you steer away from the next bump and the next bump, and you really recognize what is the meaning of what you’re doing and you focus on that, you will avoid those as much as possible. You’re never to eliminate it but you can avoid them. You can drive around the speed bump instead of going over it at 60 miles an hour.

What is one business idea that you’re willing to give away to our readers?

Open up a true Texas style barbecue food truck on any of the Hawaiian islands. For my wife’s 50th birthday, I took her to Hawaii. That was her birthday gift. We had never been. We went with some friends of ours. We visited with friends that had lived there before and know some local people. We went to where the locals go to eat and the local beaches. We did more of the local flair as opposed to the tourist environment, and we really enjoyed that. Towards the end of the trip my friend from Texas always put on a Texas style barbeque for their friends who are locals and natives of the island. The way that they reacted to a brisket that was put in the oven was as if was it was the first time a child ever tasted sugar. As I mentioned earlier, I’m a cornfed Texas boy and I know barbeque. I have a smoker and I dabble in smoked food. I know when I have a homerun and when a strikeout. With a food truck with a true Texas barbeque flair to it on any of the major Hawaiian islands, you would retire in 60 days because these people have never experienced what a true Texas smoked brisket tastes like. If I were anybody reading this article, that’s what I would do. The scenery is beautiful. The weather is great. There are food trucks everywhere selling Spam sandwiches and sushi, but these local people that had this brisket that was cooked in the oven for 12 hours thought that they were eating sugar for the first time as a baby. That’s what they thought about that food.

What is the best $100 you recently spent? What and why?

The money I spent on a game camera. I’m an outdoorsman and I have a ranch. I recently purchased a game camera that has cellular capabilities. Now I get pictures of the deer and the wildlife that are visiting my hunting areas through my cell phone. Since I am 50 years old, that is the bee’s knees. I think it’s pretty cool.

What is one piece of software or a web service that helps you be productive?

I would say the affiliations that we have with the different credit bureaus and the skip tracing services that they provide. It’s instrumental. I tell people all the time that nobody is ever where they were when they got to be a charge off. The tools and software that we use are critical in our success. We do a lot of online research and a lot of online scoring of accounts before we ever make our first phone call.

I’ll give you an example. Here is a role play collection phone call.

Okay, Mr. Smith, I’m calling today from Southwest Recovery Services, and I see here that you have a debt with ABC Dental Clinic. How would you like to pay that today?

Well, Mr. Dietz, I’m very sorry to inform you that I have no ability to pay that, and I can’t pay.

Well, Mr. Smith, I notice here, based on this credit report that I pulled, that you have got seven open credit cards all with credit limits over $10,000. Are you sure we’re not able to work out some type of an arrangement? I’d really like to help you keep this off your credit report. What do you say?

With the information that we’re able to obtain, you’re able to overcome objections. If you drive without your headlights on at night, what happens? You’re going to crash. You’re going to do the same thing if you drive blindly into a collections call. The more information you have at your fingertips, the knowledge is power, and it is very, very, very important to know your adversary before you pick up the phone. That’s the key to it. The affiliations and memberships that we have with the credit bureaus and the affiliated software systems that they provide for informational purposes, we could not do what we do without it.

What is the one book that you recommend our community should read and why?

The Art of War by Sun Tzu. Is life not a constant row of challenges that you must overcome? I read that book, and it changed the way that I approach everything. It is honestly the most pivotal work of literature I have ever read. The insight that I was able to obtain from it was life changing. You can apply military strategies and tactics to anything, any challenge, any conflict, any relationship, your work relationships with your peers. You can use it in your home relationship with your wife. You can use it to direct your children in making better decisions. It is all about strategy and if you employ the right strategy, listen first, but then employ the right strategy, you can overcome challenges that you never thought were possible. The book is not about blood and gore. It goes through some of the greatest generals, Napoleon, the Ming Dynasty, and it is full of all sorts of strategies that these people employed. If you open your mind, you realize that it is not just for military conflicts. The strategies can be used to overcome conflicts and challenges you have in everyday life.

What is your favorite quote?

“Where’s the beef?” is one of my favorite quotes. I am an outgoing, fun loving, crack a joke type of person. I just liked that little old lady’s face when she said it. That old grandma. She was very serious.

“Do unto others as you would have them do unto you.” Matthew 7:12. My grandmother was very religious, and she made a point in my life to instill that in me.

Key Learnings:

• Don’t be afraid to fail.
• Accept challenges and see thing through to the end.
• Challenge yourself to be the best you can be.
• Work harder than your competitors.
• Be kind to others.  Be compassionate to others makes a difference.  As the CEO, the difference you can make in your employees’ lives by being kind is worth it.