By 3 Minutes
Debt collection agencies and departments are sitting on goldmines, and most don’t even realize it. There are solutions to so many of their challenges, right under their metaphorical noses, and most haven’t figured it out yet.
What we’re talking about, of course, is data. Collection efforts generate massive amounts of data, and if more put that data to work, they would be stunned at how much more effective they would be. This concept has implications for
profit, market competitiveness, and even job satisfaction.
The issue for collection agencies or departments is that many of them don’t know how to access the data, much less analyze it, but it’s worth the effort to figure it out. Let's use consumer behavior as an example: knowing how individuals react to phone calls, letters, a conversation, and whether a voicemail was heard or not — just to name a few of the data points that can be analyzed — can be incredibly insightful. Taking the analysis a step further, companies can segregate accounts by types of debt (medical vs. credit card vs. student loan, etc.) and other demographics to provide a better picture of how an individual is likely to react to different types of communication attempts.
“If I was given nine hours to cut down a tree, I would spend the first six hours sharpening my axe.”-Unknown, and Probably Fictional, Wise Woodsman
For too many years, collection agencies have adopted the spaghetti and wall approach to collections — fling as much as you can against the wall and see what sticks. Make as many phone calls as you can, send as many letters as you can, lead with carrots, bring out sticks, and hopefully the individual will finally pick up the phone to make a payment or send in a check. Quantity over quality. If a little is good, more is better. Pick any cliche that references brute force over finesse, and that's traditional debt recovery. Just as we would take the time to prepare our tools for any building or yard project (hence the axe sharpening quote), your software is your primary tool and should be as sharp and pointed as possible.
Modern technology provides agencies or departments a far more efficient and effective way to work. It starts with learning as much about the person you are trying to contact as possible - fortunately, everyone pretty much has that covered (categorizing that information may be where an effort falls down due to software constraints, however). Building a profile and determining the best place/method/time/message to reach someone based on the information is what is possible today. Following the trail takes an intentional effort, but fortunately the breadcrumbs are inside your computer!
Now, before you go all Hansel and throw your computer to the ground to get the files you need, (I hope you know this reference - Zoolander is a cult favorite my house! “The files are in the computer? I got this.”), know you can spend a lifetime analyzing the wrong data and not find anything useful.
Have a few conversations with some colleagues, find a great consultant, or do some research about what you’re trying to accomplish before you go digging.
Go forth and strike it rich!
