12/05/2019 | News release | Distributed by Public on 12/06/2019 01:29
Now more than ever, collection agencies need to improve their bottom line while providing strong customer service to retain and grow their client base. Government agencies have growing inventories without growing budgets, while commercial organizations need to balance collections with customer retention and future profits. In order to achieve these goals, collection organizations must provide better customer service in collections, enable strong self-service, and have operations that support continual improvement to achieve their goals. Collection functions must make it simple to locate and contact consumers and make it as easy as possible for them to pay, while simultaneously collecting in the least intrusive way.
The good news is many recent technology advances have made this not only possible but cost-effective.
The reality is people who owe money don't want to talk with the people they owe money to. Most of them know they owe the money, and they want to determine the easiest, least painful way to repay their debt. They also want to interact on a 24/7 basis on their schedule, often from their cell phone. The good news is that a consumer portal can allow people to check their balance, make payments, enter payment agreements and where permitted negotiate a settlement without human interaction.
Experience has shown that when people interact with collections through a self-service channel or portal, they have a higher level of customer satisfaction. In addition, promises taken on a portal generally have a lower default rate than one taken by a collector, which also frees collection staff to work other cases.
Letters and traditional phone calls are relatively expensive. In addition, younger consumers are less likely than their parents to open their mail or pick up the phone. However, the number of people who respond to text messages is growing. You get their attention within seconds and can get immediate feedback from the consumer.
There are many use cases where text messages are appropriate. If you can get a consumer to agree to receive text messages upfront (with consent) then your initial contact can be made through a text message at a fraction of the cost of a letter or phone call and with a link allowing the consumer to make a payment right from their phone.
Often you find that collection organizations treat everyone the same, or everyone with a similar balance the same. However, that is not the most efficient or effective way to collect; not all consumers have the same likelihood of repayment, and not all consumers will respond to the same messages.
As my colleague, Tim VanTassel states in his blog, Three Ways to Use Collections to 'Save the Win', by utilizing analytics you can segment your debtors into groups based on their likelihood to pay, and the strategies which will drive their payment. This will allow you to collect more, and do it with lower average cost.
Predictive and Prescriptive Models which are built using your data are highly predictive and allow you to segregate accounts so they can be worked more effectively. Organizations can focus their energies on the accounts where they are most likely to have success, can be less intrusive for accounts where they are likely to self-pay, and can accelerate accounts that are less likely to pay to stronger actions.
Some businesses buy pre-built models from data providers. While that is better than doing nothing, models which are built and tuned to unique data and strategies will be more predictive and result in better outcomes. In addition, these models can use machine learning to stay fresh and tune themselves over time.
For many collection cases, the account comes into collections without a good phone number, mailing address or both. When this occurs, the collection organization must initiate skip tracing. Skip tracing can be a very manually intensive activity. The good news is that tools are available to automate the search and capture of better addresses and phone numbers. This minimizes the manual efforts, and through case management automation, letters and phone calls can resume without any staff intervention.
Skip tracing is critical to the collection process because some debtors do not know they have a liability. Especially for lower balance amounts, getting the bill to the right person may be all that is required for payment. The key is both automating the skip trace process, and having intelligence in the process to truly get a better address in order to improve overall results.
Many organizations rely on their experience to write letters and scripts for communicating with consumers. This means that letters and talk scripts are consistent across the organization. However, experience shows that no one communication strategy is optimal for every consumer and situation. This can be further exacerbated by your legal team's responsibility to oversee your communications.
Behavioral studies have proven that different people react better or worse to different messages. There is an opportunity to use your case management system to test different communications and frequencies (written and verbal) on small but statistically significant samples of your consumers to allow you to determine the most effective communication strategies. Your system can measure the effectiveness of each script for different debtor types and apply the best letter and provide a collector with the best script for each case, which can improve collections without adding staff or postage.