Wynand Smit, CEO of Inovo, writes that companies find themselves in the unenviable position of having to recoup debts owed to them by consumers to maintain profitability, and this is likely to increase in 2018.
Collecting debts can be managed in two ways: the first involves the company’s own contact centre having a debt collections team, the second involves outsourcing the process. The goal is to recoup money owed, avoiding legal costs and, ultimately, retaining the customer.
In-house versus outsourced
The benefits of in-house debt collection include having access to the customer’s entire history according to the customer intelligence stored, information that may not be available in a third-party debt collection scenario. This allows agents to personalise their interactions, so they can thank the customer for a payment or a purchase made on a specific date, and then make an arrangement for the next payment.
Historical data can also be used to refine and personalise the approach towards debt collection per individual — if for example, a customer tends to ignore calls from the contact centre but pay shortly after an SMS reminder, this information can be used to optimise and customise a company’s collection strategy to account for behavioural factors.
In addition, an in-house system allows for updated information in real time: if the customer’s contact number isn’t being answered, this can be documented and the most recent contactable number used for future outbound calls to avoid calling obsolete or incorrect numbers. This not only saves time but will also reduce the overall cost per collection.
Outsourcing has its benefits, too. Using an external company avoids the need for a contact centre in-house, resulting in reduced costs (staff, training, infrastructure, hardware etc.). As specialist debt collectors, they also have a wealth of skill and expertise in recovering debts in various scenarios, and know how to resolve disputes promptly, potentially maximising revenue through more efficient collection strategies.
Productivity as a key factor
Irrespective of how a business chooses to manage their debt collection, productivity plays one of the most important roles in the process. Profitability is essential in business: an effective system along with more streamlined processes, once implemented, could take you from five unproductive agents making 30 calls per day in the contact centre to 70 agents (operating at higher efficiency and productivity levels) making 150-350 calls per day.
This is from direct feedback from one of our clients, who also stated that they were able to increase monthly collections by more than 200% after optimising their systems, workflow and debt collection strategies.
Debt collection is an unfortunate reality in business, and you’re going to need to have efficient means of doing this in 2018 that allow you to maintain a steady cash flow and retain your customers.