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

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.
 

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