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List management strategies maximise debt collection

27 Feb 2014

Reuters has reported that household debt grew at its fastest pace since early 2008 in the fourth quarter of 2012, a possible sign that the painful process of paring back borrowing in the aftermath of the financial crisis may have run its course.

Image: www.freedigitalphotos.net

While not all consumer debt reaches a delinquent status, this rise is creating an increased demand on the collections process.

"An ongoing challenge for today's collections contact centre is increasing its efficiency and effectiveness to the maximum. This responsibility is generally entrusted to contact centre managers, who need continually to analyse the contact centre's performance and agent efficiency in order to get the most rands collected," said Ebrahim Dinat, COO of Ocular Technologies, a contact centre solution provider.

The white paper, "Optimising the collections process", which was published in 2013 by Aspect Software, a partner of Ocular Technologies, states that one of the biggest challenges facing collections firms today is effectively managing customer lists for optimised contact rates.

Tips for collections contact centre managers

Part of the paper explains that list management strategies ensure that the accounts representing the highest risk to the collections process are targeted with the right collections treatment in order to maximise collections. It also provides the following tips for collections contact centre managers:

The collections process must encompass methods that automatically change workload assignments based on given contact list quality, risk, and probability of contact; and

The strategies used in managing dialling operations should not be carved in stone; they are an exercise in probability, seeking the best contact times available with a given staff resource allocation. That is, dynamic changes to strategies should be based on triggers, such as time of day, calling list penetration rate, hit rates, risk assignments, and agent resource availability.

It cannot be ignored that some collections companies operate in multiple locations, often with competing debtor contact strategies and different methods and philosophies for managing portfolio risk. Research shows that to be more effective, collection companies must adopt a holistic view of operations to sharpen competitive edge, promote best practices, drive efficiency gains, and achieve profitability goals throughout the enterprise.

"Greater collection call centre flexibility and productivity are vital to ensure the viability of a company and to streamline its processes, reduce operational costs, ensure business continuity as well as sustain compliance with legislative-, security-, and customer-specific business rules," added Dinat.

The white paper elaborates on this by saying that centralising list management strategies enables collections businesses to develop, execute, and manage enterprise-wide contact strategies from a single source in real time. This helps eliminate intercompany collection silos and resolves many of the technical issues surrounding disparate contact centres with multiple technologies and collection approaches. This, it states, is the beginning of true strategic business process management.

"For customer contact centres to remain effective, they need the tools to dynamically change account and list segmentation instantaneously, adjust to trends and patterns within specific list sectors as well as react to environmental factors that may impact contact rates within specific lists," said Dinat.

Low-risk or infrequent debtors

Strategic list management also enables collections centres to segment debtors according to risk level. That is, some customers are low-risk or infrequent debtors who may simply need a payment reminder as a result of losing an account statement or because of an oversight. These may require no more than a reminder notice or an outbound call scripted with an interactive voice response to capture payment information. This approach helps automate early-stage collection efforts, which is especially valuable for centres with large volumes of early-stage account records, enabling collections managers to target riskier debtors.

"Enhancing the effectiveness of a collection contact centre's technology, people and processes ensures that the right resources are available at the right time to realise deliverables in a planned and proactive way," concluded Dinat.