It is Easy to Capitalize on Missed Opportunities within Your Collections Process

This is the second article of a two-part series discussing how to develop effective data and scoring models in the collections process and how to execute an optimal contact strategy.

In the first article of the series, we discussed the importance of developing effective data and scoring models in the collections process. In this article, we will turn our attention to how you can leverage this data to design and execute targeted contact strategies.

Designing Your Contact Strategy

Missed Opportunity #1: Acknowledging observed behavior

We need to become better listeners and observers because debtors are beginning to “tell” us how they want to be treated. But we often don’t listen when the debtor is speaking. Many companies continue to generically mail, call, or text the debtor even after the debtor has visited its website and not made a payment. A more sophisticated and straightforward approach to implement is to tailor your message to acknowledge the recent visit, and offer a new incentive to pay. You are now creating a synchronized dialog with the debtor helping to lower costs, increase dollars collected and improve the overall customer experience.

Missed Opportunity #2: A personalized dialog requires a personalized contact strategy

There is often wasted effort and attempts as companies continuously contact debtors using the same channel or strategy. Contact strategies must now be individualized and targeted to ensure costs are minimized and payments are maximized. Similar to a skip-tracing waterfall, adopt an intelligent contact escalation strategy that is derived from either observed or predicted customer behavior. In earlier-stage collections, as much as seventy-five percent of the customer base is “repeat” customers who have been contacted previously.

“Collections companies need to observe, capture, and remember the method with which each customer was previously contacted successfully. If it’s a net new collections account, an escalating strategy using multiple channels is wise, particularly one that begins with low-cost contact strategies then escalates based on intelligent rules and proven strategies that vendors can provide from their vast experience,” said Vytas Kisielius, CEO CMC. “By leveraging what’s been observed in the past, you can easily eliminate more than 10% of wasted mail and outbound attempts.”

Missed Opportunity #3: Use Champion/Challenger scenarios to test and measure strategies

Intelligent strategies like those mentioned above require a granular view of data but most organizations lack the resources to conduct such analysis. Thus, a significant opportunity is missed in optimizing channels and alternate strategies. For example, an optimized strategy would know about channel efficacy for contacts and driving payments. Create champion/challenger strategies and offers that can be executed as intended and measured accurately. Collections yields can be increased by as much as fifty basis points if your strategies are developed from well-designed tests.

Executing Your Contact Strategy

Planning and strategy set the stage, but effective execution delivers the results. Companies need to look at new ways to improve execution:

Missed Opportunity #1: Increasing right party conversations

Most collections organizations use at least three distinct dialing strategies: manual, predictive and automated voice messaging. While used in varying degrees, automated voice messaging has seen significant growth over the past five years as companies look to gain efficiencies in their operations. However, debtors often hang-up when hearing initial automated voice messages, just as they hang-up on pauses created by traditional dialer campaign. Unable to truly blend contact strategies, companies reach out to the debtor at inopportune times using the same contact strategy. A more sophisticated approach is to launch a predictive dialer pass to connect a live agent with the debtor who just hung up the phone. The predictive dial must be immediate and can use a different caller ID from the voice message attempt. In a recent test conducted by SoundBite, this strategy resulted in a 71 percent increase in right-party conversations. The key is leveraging technology that can intelligently and instantly escalate and blend across different contact channels.

Missed Opportunity #2: Developing an interactive mobile messaging strategy that aligns to consumer communications preferences

As the world has become more mobile, collections companies must evolve their contact strategies. In this article, I have discussed three of the common “dialing” strategies, but there is another channel driving tremendous collections effectiveness – text messaging. There are now more “mobile-only” households than “landline-only” households, creating missed opportunities for those failing to leverage the text channel.

Many organizations have already seen huge incremental lift in leveraging free-to-end-user text messaging to drive inbound call volume and create payments. It is also important to capture that customer’s consent to use the text messaging channel for future communications and follow-up payments. As the percentage of accounts in collections that are “repeat” customers grows, and the amount of money tied to payment schedules has increased with the economy, this is a simple and highly effective way to improve collections.

Furthermore, companies are beginning to explore inbound text messaging. Here, you can add an alternate channel for customers to contact your company through a statement on your website and/or direct mail (e.g. “Text PAY to 77053…”) for a special offer. In this strategy, again, the customer is choosing the text channel. By obliging the customer’s desire to interact via the channel of his/her choice, you vastly improve your chances of securing payment in the most effective and efficient manner available.

There’s rarely ever a shortage of ideas in collections organizations for how to improve results. If the missed opportunities mentioned in these articles exist in your collections department, you are not alone. The good news is that there is help out there right now with solutions to these and other missed opportunities. If you’re bold enough to innovate within your process, and truly committed to making a step change in collections results, simple and low-investment solutions are available all around you.

About the Author
Matt Edmunds, VP, Financial Services and Collections Solutions, SoundBite Communications
Matt Edmunds brings 15 years of hands-on industry and operational experience to his role at SoundBite Communications. As the VP of Financial Services and Collections, Edmunds leads sales, marketing, services, and product development efforts tailored for these industries. Prior to joining SoundBite, Edmunds was senior vice president of bankcard operations for Outsourcing Solutions, Inc, where he managed all facility, personnel, strategy and operations decisions for four call center sites with 600 full-time employees. In this role, he was a frequent user of SoundBite’s solution. Prior to joining OSI, Edmunds spent almost nine years at Capital One Financial Corporation leading collections strategies.