We’ve all been there. Your agency just won the bid for a new large batch of placements. You don’t know a ton about it, but the number of accounts is supposed to be pretty substantial. You scramble to make sure you’re ready for day one of collections.
Day one arrives, but the placements don’t come. You give your contact a call and he says they hit a few bumps, but you should be getting the new business soon. You anxiously wait – double checking to make sure everything is ready for the instant the new paper arrives. With the new accounts comes the possibility of even more new business. You do your best to not think about what this could mean for your company, but can’t help from being excited.
Finally, after what feels like forever, the new accounts begin to arrive. You want to make sure you put your best foot forward, so you isolate out this client’s business, paying it special attention while giving it unique letter strategies and dialing campaigns.
In the first few weeks, you get some really good wins, but also come to the conclusion that some of the paper is not as valuable as you had hoped. Now what? Are you operating at a loss? Should you taper back? How do you even begin to approach that?
The truth is, with pretty much every batch of accounts, you are going to have some accounts that are extremely valuable and some accounts that just aren’t worth much. Fortunately, in a modern business world of account profiling and scoring, it is easier than ever to tell the difference between these two classifications of accounts.
At Intelitech, we offer a lot of different scoring models that range in both scope and complexity. One of our most visible and highly used, the medal scoring, identifies those high value accounts as Platinum and those low value accounts as Bronze.
At the point of placement, you can identify the total likelihood that a specific account will provide any sort of return for you. On average, Platinum accounts produce a yield 12 times as high as their Bronze counterparts. In many cases, the gap between these two extremes can be even far wider. Knowing how to tailor your effort and activity for each of these classifications can be a significant difference between profitability and always looking for that next batch of new business.
Here in this article, we focus on an assortment of strategies we have seen agencies use for controlling their costs on their lowest valued accounts.
- Eliminate From Initiatives Reserved For New Business Do you have strategies and dialer campaigns that are typically reserved only for new business? A typical agency collects about a third of their eventual recoveries within the first 30 days (You can use our S06 report from the standard report library to see how you compare). You of course want to make sure you get good penetration levels on new business, but not all new business is created equal.
- Move Up The Account Exhaust Point How long do you work your paper? For collection entities with the luxury of being able to collect on their accounts for an indefinite period of time, it really pays to know when it no longer makes sense to be making dials and sending out letters. This cut-off point does not need to be universal for all of your accounts and should be varied based off of the total potential or opportunity for a given batch of accounts to begin with.
- Push Out The Number Of Days Before An Account is Worked Again How often do you churn through your active inventory? Every 4 days? 6 weeks? Never? Rather than having the same business rules for how often you attempt your accounts, why not set up your system to push further out those accounts that you don’t want to see as often?
- Reduce The Number Of Letters Going Out Which notices do you have greater discretion over? What kind of return are you getting back on your mail? Get in touch with someone from our team today if you would like greater insights on the effectiveness of your current letter strategies.
- Incorporate Into A Dialer Calendar Getting the right dialer campaigns put together is only half of the battle. If you still find yourself working everything the same thereafter, you are missing out on a potentially large opportunity.
- Limit The Number Of Personnel Working Them Do you want to limit your resources, and yet ensure that you are attempting everything? Some agencies will limit the number of collectors that they allocate to lower scored accounts. These collectors can be compensated differently or can be motivated by the prospect of getting to work better accounts as their performance improves.
- Forward On To A 3rd Party Agency Do you have too much inventory to work? Do you want to just spend your time working the best accounts? Some agencies forward on their lowest scored accounts after a short period or sometimes even at the point of placement.
- Send A Letter Only On Contact This is a more aggressive strategy to control costs, but could potentially be an option in the right set of circumstances. If you want to limit your letter costs, you can substantially cut down on the number of letters sent out through this strategy.
- Use Primarily As A Training Tool For New Collectors Are you looking for a low risk method for training your newest collectors – on the actual collection floor? Having your newest collectors work the low scored accounts could give them the opportunity to practice using the technology and working through the process without risking substantial potential revenue to your office. The biggest caution: Make sure you don’t overdo it and burn out your newest talent before they get going!
- Use Dialer Blasts And Auto-Messaging This is among the most common methods for mitigating effort on low grade accounts in our industry today. The advent of dialer campaigns and other ‘blasting’ technologies enables agencies with the tools to be able to attempt a much larger pool of accounts with fewer individuals.
This is just a list of ideas of things that an agency might try. What works well for one agency might be entirely ineffective to another.
In the end, whatever methods you use, the key is just to make sure you take advantage of the information and technology available today to ensure you are as effective as you can be.
The Intelitech Group™ 