A successful debt collection agency is powered by skilled, knowledgeable leaders. Management is responsible for maintaining smooth day-to-day operations that significantly impact clients’ return on investment (ROI), brand image, and customer retention and satisfaction rates. The performance of these crucial tasks are predicated on utilizing a number of important operational, technological and analytical tools that maximize collection efforts.
Seasoned collections professionals help an agency produce the best results with sound decision-making, quick response times, proficient problem-solving, clear communications, the ability to optimize collection software, a drive for self-improvement and a commitment to accountability.
Furthermore, they must possess a command of compliance; a firm grasp of collection technologies; leadership skills; knowledge of the latest industry trends, concerns and solutions; and a solid understanding of the agency’s mission, vision and values. Finally, industry experts apply industry-specific approaches to collections and remain up to date on economic conditions and industry jargon.
Leaders should also have extensive experience in developing individualized collection strategies and familiarity with contingency based collections, first- and third-party portfolios, dialer technology, letter strategies and innovative call-center programs.
Organizations interested in outsourcing collections should review the potential impact of the following focus areas before partnering with an agency.
Strategic Predictive Analytics
For many years, industry leaders applied the expert method when problem-solving and developing solutions. This method relies heavily on management’s experience and judgment, along with basic account information to organize and assign delinquent accounts.
More advanced than the expert method, management then began to utilize traditional predictive analytics. Bringing together “advanced analytics capabilities spanning ad-hoc statistical analysis, predictive modeling, data mining, text analytics, optimization, real-time scoring and machine learning,” traditional predictive analytics assists agencies in data pattern discovery and anticipating future occurrences, states IBM.
Most recently, strategic predictive analytics — the latest model — has proven more efficient and cost effective than traditional predictive analytics. This evolved approach uses cost-benefit analysis, simulations to determine break-even points and collection scoring models and risk scores. Leaders compare various segmentation options to pinpoint when collection strategies are no longer profitable for individual accounts. This allows the collection agency to direct efforts toward the correct debtors at the right time using the most effective communication strategies for the greatest ROI.
Strategic predictive analytics software offers:
- Straightforward trouble-shooting and campaign modifications requiring minimal IT resources and manual decision making.
- A simplified sorting process for prioritizing collection accounts based on up-to-date data.
- The identification of accounts in need of increased collection efforts and accounts that will self-cure as well as those that are more or less likely to pay within a particular time period.
- The ability to predict settlement offers along with the appropriate time to extend them.
Collection Agency Software
Leading debt collection agencies use advanced receivables management software to effectively establish and maintain workflow designs and automation for any number of accounts with the software’s customizable technology. Successful software management helps prioritize accounts with a greater tendency to pay and create reports modified to individual business rules.
Similarly, contact management platforms can provide “compliance, traceability, transparency and reporting from a single database” to reduce the number of “moving pieces in need of coordination and management.” Features include options for manual, power and predictive dialing campaigns; answering machine detection; integrated cell phone consent and scrubbing functionality; account rep conversation management including whisper, monitor, barge-in and commandeer; and a “fully-blended inbound and outbound dialing campaign support with multiple inbound routes.”
Automated Dialer Programs
When conducting collections on behalf of clients, management ensures that all employees abide by state phone call recording laws. In addition, state-of-the-art automated telephone dialing software such as power dialers and predictive dialers optimizes efforts by pre-loading lists of numbers to reach more debtors in less time.
- Power dialers enable collectors to contact debtors without wasting time on numbers that are busy, dropped, disconnected or unanswered. If the calls transition to answering machines or voice mail systems, then collectors have the option of hanging up or leaving a personalized message.
- Predictive dialers offer other advantages such as connecting collectors to only live persons, automated messages to multiple debtors, interactive voice response (IVR), using “call logging” to identify the best times to reach a live person, and compliance tools that automatically limit redial attempts or ensure calls are made within acceptable hours of the day.
There may be potential issues while collecting on accounts of consumers who are deceased, currently involved in a bankruptcy, have prior litigations related to the FDCPA, or under protections by the SCRA. To remain compliant, management oversees daily scrubs on all accounts using leading technology to verify the status and background of each consumer. Accounts that resemble these circumstances will immediately be cancelled by some agencies. Following a scrub, management then places approved accounts in collections and assign the most suitable strategy based on account information and client needs.
Collection Agency Score Cards and Collector Score Cards
Agency score cards are effective performance measurement tools that allow businesses to easily identify whether or not an agency is producing favorable results. Organizations partnering with more than one agency can implement agency score cards to compare key statistics, and make adjustments to contracts — altering the number of accounts managed, collection strategies used, or ending a contract — if needed. Measurements will vary according to individual needs and concerns. Categories may include revenue collected, customer service and responsiveness.
A collector score card is a comprehensive summary of collector statistics in a single document. The report measures individual collector activity over a specific period of time, usually a week and or a month. Each category has a set value, with a final grade at the bottom of the document. Categories may include messages left over a selected period of time, the number of “action codes” recorded by the agency’s database, productivity, conversions and call quality.
Collector scorecards identify whether collectors are succeeding or lacking in each category, allowing for tailored coaching by management and other management. At top agencies, management produces and analyzes collector score cards on a weekly and monthly basis. They also routinely analyze data from previous and current scorecards to determine future actions and remain relevant within the industry. Newly implemented strategies are monitored daily and adjusted if needed.
Debt Collection Agency Reports
Reputable collection agencies produce regular reports for clients that are available online 24/7/365.
One of the first reports that agencies produce and send to new clients is the report of accounts and balances received. This report lists all of the accounts that an agency will manage, along with amounts owed by each consumer. Companies should continually receive acknowledgement reports from contracted agencies.
In addition, management ensures that clients receive standard summary reports that typically provide a general overview of an agency’s progress. Monthly status reports may be customized to reflect individual business concerns and needs. Effective agencies will communicate with clients to ensure that each report highlights areas of importance. Detailed reports on individual accounts allow businesses to remain involved in the decision-making process. Information outlined assists businesses in determining which collection strategies are suitable for an account moving forward, and the profitability of continuing collections.
Scheduled reports offer transparency between clients and contracted agencies along with the ability of analyzing the reach of collection efforts.
Leading Favorable ROI
Debt collection agency leaders are tasked with simultaneously managing multiple systems within the realm of operations, and they must effectively synchronize hundreds of overlapping practices and systems to provide clients with optimal service.
To identify a suitable agency, companies may discuss individual needs and goals prior to finalizing a partnership. An agency should thoroughly explain its collection strategies and services, and offer complimentary consultations. Contract agreements should explicitly state the ways in which agencies will service the business including collection methods, legal responsibilities, reporting obligations, pricing, billing and cancellation options.
Optio Solutions is a best-in-class debt collection agency operating with exceptional leadership and collection professionals. Our agency expertly serves clients through solid collection strategies, state-of-the-art technologies, data security, certifications and informative reports, and upholds a strong commitment to compliance. Businesses looking to add, replace or hire a debt collection agency are encouraged to contact Optio today to secure a favorable return on investment.