| Excellence In a Troubled Economy |
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Collections & Credit Risk Work for debt collectors has soared as delinquencies and charge-offs climb. Experts predict problems will push deeper into loans that once seemed solid. There is more competition for the same dollar, and debtors are hard-pressed to pay. So, how should agencies respond? In the past, they would have managed the problem with volume. Hire more agents. Dial more numbers. Talk to more debtors. Get more promises to pay. The strategy worked in the old economy but resources are limited in the new one. Instead, now is a perfect time to perfect several areas of agency performance. Boosting Productivity That's three minutes a day per agent. With 100 agents, it means 300 minutes –like adding five people for free. The flip side of absolute efficiency is turnover. Agents are skilled practitioners, not automatic dialers. Setting expectations too high burns out even the best, leaving behind training costs and inexperienced agents. Reaching the best range for each organization means more dollars collected but should not mean driving agents harder. Tools that cut the main causes of downtime should be used, such as systems that automate and centralize campaign and policy management. Progressive companies are employing predictive analytics, not just to take certain actions on select accounts but to not take actions that waste resources. To keep up the crucial measures of right-party contacts and promises to pay, the best time to call is a key factor. But what about keeping staff busy in the off-peak hours? High-value calls need to be queued first. To make swift, automatic decisions, collections needs predictive analytics that can specify all probabilities. Which customers need a call before they will pay? Which will come up with the payment, call or no call? Many chances are squandered by the wrong interaction. After all, some customers will pay without a call and others prefer to self-serve. The direct call- the most expensive treatment - should be reserved for cases where it will deliver the best results. Predictive analytics are more powerful in determining what the best treatment should be - customer by customer. A new kind of customer is s owing up in collections - people with many years of spotless credit who never expected to be in trouble and might have multiple accounts with the same institution. The right analytics enable collectors to understand the contact and thus become more efficient. Once agencies understand the value per call, promises made and kept and treatment optimization, they can prepare improved scripts, better target customers and keep from overdialing some individuals and underdialing others. Metrics should be about accountability but traditional metrics have tended to be so aggregate, so averaged, that they become opaque. Averages do not point to remedial actions. Management needs to see the data by agent. They need to compare best and worst performers and understand what is driving each. Why are some agents outperforming on promises to pay? Do they also outperform on promises kept? Metrics help managers find ways to improve by learning vast amounts of information, and feeding it into the analytics for better results. Heading into 2010, with head counts strained, collectors often are overwhelmed. But sometimes, tough times are the best times to achieve excellence through innovation. CCR Joe Pratt is a collections specialist at ALI Solutions. E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it |