Topline sales are a priority for any company.
But how much money are businesses leaving on the table, simply by not collecting what’s already owed to them?
As of late 2021, the value of outstanding collections on U.S. consumer debts totaled $188 billion – and that doesn’t even include B2B collections. According to a TransUnion forecast, the number of consumer debts going into collections is expected to rise.
Businesses can’t afford to let those types of debts become losses. Here are five ways debt collection companies can enhance productivity to successfully and efficiently recover more debts.
Hire and train well
But how much money are businesses leaving on the table, simply by not collecting what’s already owed to them?
Debt collection can be a stressful, demanding job. Try to hire detail-oriented people who are good listeners. Train collection agents to be resilient to rejection, skilled at negotiation, and calm under pressure. Training should also emphasize:
- Prepping for each call by having all necessary data at hand (invoices, payment history, etc.)
- Working their way through a call script
- Taking in-depth notes
- Responding to different types of customers in various situations
Teach collection agents to use the right tone during calls as well. Research suggests contact center agents have greater success at collections by emphasizing solutions and adopting an empathetic tone rather than an intimidating, threatening one.
For compliance, properly train or certify agents in the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act. Sit with them during their first calls to make sure they follow these regulations.
To keep contact center agents motivated, use incentives (financial and otherwise) to show appreciation for their work and recognize their progress, both individually and as teams.
Categorize and prioritize
Don’t approach every collection file the same way. Strategically categorize cases based on variables such as:
- Willingness to pay
- Ability to pay
- Amount in arrears
- Length of time in arrears
- Likelihood to pay in full
- Likelihood to make a partial payment
Once cases are segmented this way, prioritize them based on considerations such as:
- Debts most likely to be recovered quickly
- How much time an agent should spend on each file
- The threshold for sending each debt into legal proceedings
These strategies will improve your recovery rate and save agents from wasting too much time on cases that are unlikely to be resolved quickly by contact center interventions.
Set goals using metrics
You can’t improve productivity if you don’t know how efficient your collections system is in the first place.
Here are some potential metrics to track on a daily, weekly, monthly, and quarterly basis:
- Total number of contacts made by your collection agents
- How many of those contacts result in full or partial payment
- How many cases end up referred to legal proceedings
- Dollar amounts collected
- Number of contact attempts made in each case before the debt is paid
These data points will give you benchmarks to measure progress and set productivity goals for your collections team to work toward.
Use the correct channels
Is your collections team contacting debtors through the most appropriate channels?
One study found that although the majority (65%) of collection attempts are made through phone, voicemail, and letter:
- Higher-balance customers are more likely to respond via digital channels like mobile and online banking
- Lower risk customers with better credit scores still prefer to be contacted through more traditional channels like phone, voicemail, and letters
- In all cases, debtors are more likely to respond and to pay in full when contacted through their preferred channel
Taking the time to analyze the channel use patterns and preferences of debtors can improve collection recovery rates dramatically.
Use technology
Many of the productivity strategies we’ve talked about here can be deployed or enhanced through technology. About 70% of collections professionals expect spending on tech-based solutions to increase over the next few years.
Recent data show that’s already happening. For example, among medium-sized collection agencies (those with more than 100,000 accounts but fewer than one million):
- 97% are using online payment portals
- 61% are using predictive scoring to prioritize accounts
- 34% are using speech analytics
- 21% are using text messaging
Some of the technologies that can boost productivity at collection companies include:
- Autodialler – weeds out busy signals and answering machines to increase the chance of reaching debtors by phone
- Collections software platform – bundles features like invoices, payments, contact notes, text messages, and letters into one integrated solution
- Analytics – generates data to track current performance and set improvement targets
- Predictive analytics – uses data (i.e., credit score, income, payment history) to predict things like which debtors are most likely to pay, how quickly, and via which channel
- Prescriptive analytics – suggests specific changes (i.e., staffing levels, best times to call) to achieve the best outcome based on past data patterns
- Speech analytics – records all calls and transcribes them into a searchable database; can be used for training agents and alerting them to potential regulatory violations if they use certain words or phrases during calls
- Self-service portals – allow debtors to engage with collection agents and make payments via text, email, or online banking at the time of their choosing
- AI – virtual assistants, algorithms, and chatbots analyze and respond to debtor communications and behavior without requiring a live contact agent
- Automation – software programs perform tasks so agents don’t have to do them manually
According to researchers, these technologies are being adopted by the collections industry as it shifts to hybrid work, which allows agents to work from both home and the office. This means the sector increasingly needs technologies that are cloud-based, flexible, scalable, integrated, compatible with various operating systems, and robust enough to perform well in any type of network setting.
To explore more ideas on how to improve your debt collection rates, speak to an IDT Voice Solutions Expert today. Our experts have been assisting financial services companies for decades, building telecom solutions that help boost profitability instantly. With virtually no capex and a service that is compatible with all major debt collection software, IDT can bolster your bottom line.
IDT is one of the world’s largest telecom carriers and is trusted by the likes of Verizon, AT&T, Orange, Vodafone, and a 1000 others. For 3 decades IDT Corporation has pioneered technologies and services that enable people and businesses around the world to communicate and share more easily and affordably. Today we leverage our expertise to provide consumers and businesses with innovative communications and payment services through our flagship brands: IDT, BOSS Revolution, net2phone, National Retail Solutions and IDT Global.
