Sometimes, a client
wants you to liquidate more … sometimes, you need to find more revenue inside a
portfolio. How do you do it? It’s more than just telling the collection
team to find the money, and sadly that’s what a lot of credit and collection
departments do – it creates a less pleasant environment for the collectors, can
unnecessarily aggravate consumers being contacted, and harm brand reputation. Often, statistics are your best friend to
make a better work plan.
Collections is all
about patterns, and areas of opportunity.
We had an analysis of files this week for a client, and I wanted to
share the breakdown and solution on 1300 accounts below.
In the grid below, you
can see that the collection team has recovered, or is about to recover, almost
14% of the assigned account volumes (highlighted in dark green below). Let’s say the client expects 20%, hypothetically,
where would you find an extra increase in recoveries?
If you look, some
money just isn’t recoverable – bankrupt, deceased, or closed files can’t
produce revenue, and should not be called.
The next step is looking at how many debtors have been reached. Of the 1300 accounts, contact has been made
with 369 debtors (Broken Arrangements, Cooperative, No Income, Paid in Full,
Partial Payment, Payment Arrangement, Promise Payment, Settlement, and
Uncooperative), so 28% RPC (right party contact) penetration. Of
the 369 accounts where human contact has been reached, 180 consumers are paying
or have paid, or 48% -- so would pressuring your collectors render the biggest
result? Maybe not – let’s say they could
improve performance, that would increase their recoveries by 20%, for an
increase of 20% on 14%, or 2.8% -- there are bigger slices of the portfolio that
could be recovered.
Highlighted in orange
below are the biggest segments of opportunity – 43% of the accounts are Trace,
meaning no numbers are available to reach the consumer – pulling credit bureaus
or doing manual trace work, if not being done already, would maybe result in 20%
of the accounts being located, and using the same patterns as above, recovery
on 48% of the consumers reached – that would result in (20% x 43% x 20% = 1.7%
-- all without changing what your collection staff are doing on the phone. Going a bit further you can look at an SMS or
email campaign to increase contact on ‘Contact Attempted’ files, and get
another increase of (10.62% x 48% x 20%) = 1.01%. So there’s 2.7% increase, all without
stressing or causing grief to your collection team.
Highlighted in yellow
below are also smaller areas of opportunity – maybe a seasoned collector could
review and re-call the uncooperative files, maybe the ‘In Progress’ files could
be moved into call production sooner.
Maybe ‘Broken Arrangements’ accounts could be worked closely to turn
them around back into paying files.
|
DBStatus
|
|
AN1
|
AP3
|
BM1
|
DB9
|
KH1
|
MM4
|
NEW
|
xsp
|
TOTALS
|
LIQ
|
|
Avoids Contact
|
Cnt
|
1
|
31
|
60
|
0
|
0
|
16
|
0
|
0
|
108
|
8.31%
|
|
Bankrupt
|
Cnt
|
0
|
2
|
0
|
0
|
0
|
0
|
0
|
0
|
2
|
0.15%
|
|
Broken Arrangements
|
Cnt
|
0
|
12
|
9
|
0
|
0
|
11
|
0
|
0
|
32
|
2.46%
|
|
Contact Attempted
|
Cnt
|
0
|
70
|
0
|
0
|
0
|
67
|
0
|
1
|
138
|
10.62%
|
|
Cooperative
|
Cnt
|
0
|
4
|
0
|
0
|
0
|
4
|
0
|
0
|
8
|
0.62%
|
|
Deceased
|
Cnt
|
0
|
4
|
1
|
5
|
0
|
1
|
0
|
0
|
11
|
0.85%
|
|
File Closed
|
Cnt
|
0
|
0
|
1
|
0
|
0
|
0
|
0
|
0
|
1
|
0.08%
|
|
File Closed Recalled By Client
|
Cnt
|
0
|
0
|
0
|
0
|
0
|
2
|
0
|
0
|
2
|
0.15%
|
|
File on Hold
|
Cnt
|
0
|
1
|
0
|
0
|
0
|
0
|
0
|
0
|
1
|
0.08%
|
|
In Progress
|
Cnt
|
0
|
0
|
0
|
0
|
0
|
0
|
98
|
0
|
98
|
7.54%
|
|
Listed in Error
|
Cnt
|
0
|
1
|
0
|
0
|
0
|
0
|
0
|
0
|
1
|
0.08%
|
|
No Contact
|
Cnt
|
0
|
0
|
0
|
0
|
0
|
2
|
0
|
0
|
2
|
0.15%
|
|
No Income
|
Cnt
|
0
|
0
|
1
|
0
|
0
|
2
|
0
|
0
|
3
|
0.23%
|
|
Out of Business
|
Cnt
|
0
|
1
|
0
|
0
|
0
|
0
|
0
|
0
|
1
|
0.08%
|
|
Paid in Full
|
Cnt
|
2
|
34
|
25
|
0
|
4
|
46
|
2
|
0
|
113
|
8.69%
|
|
Partial Payment
|
Cnt
|
0
|
17
|
9
|
0
|
0
|
4
|
0
|
0
|
30
|
2.31%
|
|
Payment Arrangement
|
Cnt
|
0
|
9
|
0
|
0
|
0
|
1
|
0
|
0
|
10
|
0.77%
|
|
Promise Payment
|
Cnt
|
0
|
15
|
0
|
0
|
0
|
1
|
0
|
0
|
16
|
1.23%
|
|
Settlement
|
Cnt
|
0
|
1
|
1
|
0
|
0
|
1
|
0
|
0
|
3
|
0.23%
|
|
Trace
|
Cnt
|
0
|
246
|
78
|
0
|
0
|
169
|
73
|
0
|
566
|
43.54%
|
|
Uncooperative
|
Cnt
|
0
|
97
|
12
|
0
|
0
|
45
|
0
|
0
|
154
|
11.85%
|
|
TOTAL COUNT
|
3
|
545
|
197
|
5
|
4
|
372
|
173
|
1
|
1300
|
100.00%
|
|
In any case, sharing
these statistics with the team and the client shows everyone the demographics
of what is working and what areas can be improved – see what the collection
staff have to say and what ideas they have – after all, they are in the
trenches recovering that 14% in the example above.
What would you do to
increase the numbers? If you have
comments or ideas, feel free to share them in the comments section, or reach
out to me directly at 226-946-1730 or by email at bwettlaufer@kingstondc.com.
Thanks kindly,
Blair
DeMarco-Wettlaufer
KINGSTON Data &
Credit
Cambridge, Ontario
226-946-1730
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