25 Things Chief Compliance Officers Want Every Contact Center Agent to Know
See how maintaining contact center compliance requires cooperation between CCOs, contact center agents and an entire organization.
The Team at CallMiner
May 11, 2018
There are several reasons for clients and customers to become delinquent in their accounts. Whether clients fail to pay because of poor health, lost employment, or a poor customer service experience, they can fall behind with payments and prevent you from collecting revenue. In fact, billions of dollars are owed to governments, healthcare providers, utility companies, credit cards companies, and businesses of all sizes each year. It may not always be easy to recover debt revenue because of outdated debtor information, debtors failing to communicate with you, or a lack of technology and tools to streamline your efforts to contact debtors and offer them several options to pay what they owe you.
To help you recover as much debt revenue as possible, we have rounded up 50 tips from top solutions providers, government organizations, law firms, credit risk professionals, and other leading authorities. The following advice comes from white papers, case studies, articles, presentations, and blog posts to help you and the call center agents working for you learn some new strategies for increasing your revenue, with tips categorized to help you find the insights you need most.
1. Collect the right customer identification information. “When people sign up for utility services, collect information such as a social security number, a copy of the customer’s driver’s license, a phone number, a place of employment, and contact information for references (such as next of kin). Having this information makes it easier to track delinquent customers. In worst-case scenarios, you can call references if the delinquent customer has ‘disappeared.’”– Debt Collection Best Practices, Georgia Municipal Association; Twitter: @gacities
2. Ensure the accuracy of self-reported customer data. “Identities, not data, area at the center of the problem. Government agencies, whether they are the DMV, the Department of Revenue (DOR), Department of Labor (DOL), Department of Education or Law Enforcement agencies largely rely on self-reported data. This information can be replete with errors and subject to abuse. Even when individuals have no intent to obfuscate, it’s not uncommon for agencies to have trouble resolving multiple data entries into a single identity…
“Government agencies may have a difficult time recognizing Alex Marks, John Marks, and A.J. Marks are the same person because of the dual effects of limited data fusion abilities and the fact that an individual moves frequently, or presents a different identity to each agency he contacts. This problem becomes more acute when the inaccuracies of self-reported data coexist with the relative infrequency of data collection and data sharing by government agencies. If agencies do not have enough sources reported with enough frequency, their identity data will not be accurate.” – Scott M. Straub, Government Debt Recovery: Collecting on the Uncollectable, LexisNexis; Twitter: @LexisNexis
3. Gather customer data from multiple sources. Many government entities have a wealth of data that can enhance collection activities. This includes employer data, information from checks previously received, bank account numbers from electronic debit and refund transactions, and addresses from drivers’ licenses and even utility bills. More recently, government collection functions also are gathering information from social services as well as professional licensing and motor vehicle departments, among others.
“Governments able to centrally warehouse data from many different organizations (including federal, state and local governments) have a much more complete view of the debtor. Aggregating this data into a single account record enables dramatic improvements in the account resolution process and automated collections. It also allows collectors to determine the location of the debtor, get a true picture of financial ability to pay, and pursue the best involuntary collection path if needed.
“Comprehensive data gathering is also changing the nature of debtor conversations. As more data becomes available about financial resources and employment, the volume of involuntary collection actions is increasing. Some agencies now use involuntary enforcement tools as an early stage activity rather than a last resort.” – The Next Generation of Government Debt Collection Practices, CGI Group; Twitter: @CGI_Global
4. Get as much data about customers as possible. “Building the fairest, most effective debt collections strategyis a major challenge as most institutions have only a limited, account-level view of their customers and their financial situations. This means there’s no way to understand if your customers have debts with other creditors, whether they are repaying them, or if they have existing relationships with particular debt collection agencies (DCAs) or debt advisors.
“To build smarter collection strategies, your business needs access to data from multiple sources, including credit reference agencies, DCAs and third-party debt advisors and managers (3PDMs). Only by bringing all this together and adopting a ‘data-sharing’ approach can you achieve a holistic view of your customers’ financial situations and support them effectively through their journey to financial rehabilitation.” – Maq Khandia, Build the Fairest, Most Effective Debt Collections Strategy, Experian; Twitter: @Experian
5. Carefully choose a collection agency to help with your debt revenue recovery efforts. “When selecting a collecting agency, the first thing to look for is their strategy for success. The best collecting companies will provide education on individualized strategies for your personal situation. Strategy solutions can be designed with the help of online software that tracks every step of your recovery strategy, keeping you aware of how to manage the entire process, accounting for bad debts, and giving you finance tips from beginning to end.” – How to Select a Debt Recovering Method, Simplicity Collection Software; Twitter: @DebtCollection_
6. Partner with a collection agency using the right technologies. “Collection agencies should use a robust call center solution and a variety of technologies to offer your patients multiple payment options, making it easier for them to pay, and for you to collect. These can include web portals, automated mobile payment solutions, and virtual agents for automated payments.” – Improve Cash Flow by Sourcing the Right Revenue Recovery Partner in Healthcare, Medpricer; Twitter: @medpricer
7. Send formal demand letters to delinquent customers. “You should always have an attorney draft a formal demand letter on your behalf for any Pennsylvania commercial debt collection matter. There are federal and state guidelines that must be adhered to as a debt collector.
“A formal demand letter should include a description of the products or services involved in your dispute, the date(s) of service, a demand for the total amount owed, instructions for payment, a concrete deadline for payment, and specific consequences for nonpayment. Never include threats of any kind or even consequences that you do not fully intend to carry out. A demand letter should be sent via Certified Mail with a Return Receipt requested and should include any invoices or other referenced documentation as enclosures.” – PA Business Debt Collection Strategies for Commercial Creditors, Martin Law Firm, P.C.; Twitter: @jbmartinlaw
8. Use all avenues you have at your disposal. “Is it possible to engage in both debt collection and chargeback representment at the same time?
The answer is, in fact, yes—merchants can initiate consumer collections before submitting a chargeback dispute to reduce the risk of debt aging…
“Because debt collection is more accurately interpreted as a legal matter, while chargebacks are tied up in industry regulation as judged by banks and card networks, it is possible to engage in both at the same time. If a merchant is successful in disputing a chargeback, the issuing bank will return the funds. With collections, the merchant will have a legally-enforceable mandate, ordering the consumer to pay the money owed.” – Debt Collection & Chargeback Disputes: Rights for Revenue Recovery, Chargebacks911; Twitter: @Chargebacks911
9. Utilize a third-party partner. “A third-party partner should keep you informed of compliance and collection laws that can impact you, guard your name and brand as an extension of your company/ownership, know your industry and the nuances involved in working with your debt, constantly grow and evolve with the economy and industry, and say what they do and do what they say.” – Tracy Simonton Legg and James Neely, 6 Steps to Better Bad Debt Recovery AppFolio; Twitter: @AppFolio
10. Balance collecting debt with retaining customers. “In order to recover outstanding debts, the threat of disconnection is one sanction which could be applied, meaning that retailers have the choice to be more aggressive in their stance than is currently the case. However, with non-household customers free to choose their water supplier, strategies must be carefully balanced with customer service and retention strategies.“Threatening disconnection could easily lead to valuable customers switching to another supplier; therefore, in most cases a softer rehabilitation approach may be preferred. Retailers must consider longer term KPIs alongside the short-term benefit of higher collections rates.” – Vicki Dixon, Water Market Reform: Collecting Debt Whilst Retaining Customers, Echo Managed Services Ltd.; Twitter: @Echo_MS
11. Be clear about the rights and obligations of debtors from the beginning. “Businesses with effective debt recovery practices ensure an emphasis on setting out the rights and obligations of parties from the outset in any documented terms of trade, credit applications, or on invoices.
“This makes the taking of recovery action at a later stage more straightforward and ensures that the creditor business is in a strong position to demand payment.
“Once recovery action is required, businesses ought to adopt set strategies which establish strict timeframes for recovering activities, including the issuing of demand letters, making of phone calls, and escalation of matters to legal proceedings or referral to a collection agency.” – Good vs Bad Debt Collection Strategies, Dolphins Group
12. Be deliberate in assigning accounts. “The DCA now has a few options when assigning work to its staff. It could assign accounts randomly from across all three portfolios to the next available staff member, it could assign accounts from the highest balance to the lowest balance or it could assign specific portfolios to specific teams, prioritising work within each portfolio but not across them. Some of these approaches are better than others but neither will deliver the optimal results. To achieve optimal results, the DCA needs to break each portfolio into customer segments and then prioritise each of those segments; working the highest yielding segment first and the lowest yielding one last.” – Brendan Le Grange, ‘Cherry Picking’ Accounts in Collections, Credit Risk Strategy
13. Be prepared to respond to delinquent customers. “Overall, you’ll be more successful collecting payment from delinquent customers if you have a prepared response to some of the most common excuses or reasons for delays in payment. As the conversation continues, remember to keep track of what the customer said, and when, in order to remain firm and cite specifics during subsequent discussions (doing this making successful collection more likely).” – JM Freuler, Collection Strategies for Different Types of Customers, Funding Gates; Twitter: @fundinggates
14. Be proactive rather than reactive. “Stringent, well-established accounting schedules will pick up on a late account well before it reaches the critical 90-day period, when collection becomes far less likely. Good accounting practices will also enable the identification of recurrent delinquency and allow time to alter individual invoicing accordingly.
“Rather than recovery processes being implemented only as a last resort, it should form part of all accounting processes – irrespective of whether collections have been necessary in the past.
“Having set timelines for acceptable payment terms and internal alerts for overdue invoices at every stage means outstanding accounts are actioned in a timely manner, and debt recovery actioned as a matter of course – not a last-minute scramble.
“Proactive accounting is ultimately about having clear overall steps to follow once a customer has been invoiced, and an equally clear understanding of processes involved in following this up.” – Collecting with Care: Effective Debt Recovery Strategies, Dun & Bradstreet Small Business; Twitter: @DnBUS
15. Carefully make collection decisions. “Trying to collect on overdue accounts is a delicate balance. On one hand, a business can often ill afford to be lax with collection calls and demand for payment letters. On the other hand, to keep loyal customers business owners should also take into consideration any external circumstances, such as economic conditions, that may affect a customer’s short-term ability to pay and make adjustments to the credit policy where it is feasible. Moreover, when deciding how to collect on an overdue account, a business owner should weigh the cost (in terms of money and other resources) of any collection efforts versus the actual amount that can be recovered.” – Debt Collection Strategies When Customers Don’t Pay, Business.com; Twitter: @businessdotcom
16. Charge your debtors interest. “You may find it surprising that when implementing interest or finance charges into your outstanding debts, not only will payment be made faster, you will often receive the interest payment as well. It is a well-known fact that most companies will pay interest bearing invoices first and will relegate non-interest-bearing invoices to a later date, often waiting until collection procedures have started. Most businesses use a revolving line of credit. By not paying the outstanding bill, your customer is able to earn, you guessed it, interest on that money.” – Debt Collection Strategies – Invoice Finance Charges, The Stevens-Lloyd Group, Inc.; Twitter: @The_S_L_Group
17. Communicate clearly with clients after 30 days. “It is best to take action when 30 days have passed with no payment or contact from a client. First, enclose a personal letter with their next invoice. Restate the written agreement regarding payments (consider enclosing a copy) and that they are in violation of that agreement.
“If a client cannot afford the entire balance due, they may get overwhelmed and simply ignore the bill, hoping it will disappear on its own. Where the logic is in this, I’m not sure, but it is reality. Consider offering to make monthly payment arrangements with the client in your letter, especially if the balance due is rather large.” – Michelle Cramer, Small Business Tips – Debt Collection Strategies that Work (2 of 2), GreatFX Printing
18. Contact delinquent customers as early as possible. “One sound strategy is to reach customers as early as possible after their account becomes delinquent, as you will likely have a wider range of available options for handling the problem before late fees and interest charges escalate.
“For example, a company specializing in mortgage collections reaches out to customers when they are as little as three days late with a payment. This gives them time to assess the customer’s financial situation and intentions and explore options, such as rolling late payments into the debt or forgiving specific fees. By acting early, this company builds and maintains a constructive relationship with its customers and avoids future problems and losses.” – Collections Strategies in a Tight Economy: Best Practices from Industry Leaders, Genesys; Twitter: @Genesys
19. Don’t give clients a reason to delay payment. “Firstly, contact your client’s accounts payable department to simply confirm that they have your invoice. This can be done by email, phone or SMS, and is a friendly and professional touch to make sure the invoice has been received and isn’t lost.
“Next, check whether the invoice has been approved for payment.
“Keep these conversations friendly and professional; chat about the weather, establish the name of the accounts payable clerk, and make a connection with them.
“This can be done before the invoice is due and will highlight any discrepancies that need to be dealt with. If they feel friendly towards you, it’s likely the accounts payable department will actively deal with your invoice or at least advise you when you’ll be able to expect payment.
“Don’t give clients a reason to delay paying your invoices. If you’ve adopted these business savvy guidelines for collecting debt, in most instances payment will be received accordingly. Of course, some may still slip through the cracks, in which case further options will need to be explored.” – Heather Smith, Debt Collection Strategies: Before It Gets Nasty!, Flying Solo; Twitter: @FlyingSoloAU
20. Don’t threaten debtors. The most important thing for any new collector to remember when contacting debtors is to NEVER use abusive or threatening collection tactics. This is the absolute worst mistake a collector can make – not only are abusive tactics ineffective, they can incur hefty legal ramifications. Collectors should never make threats towards a debtor or make false claims of any sort during a collection effort.
“It is also important for new collectors to bear in mind that debtors often ‘go on the offensive,’ so to speak, when contacted by a debt collection agency. If a debtor becomes aggressive or confrontational, it is important for the collector to remain calm and professional. Try to speak to the debtor in a way that will encourage him or her to calm down so you can discuss the debt, or end the call and contact him again once he’s had time to regain composure. Getting into a huge, emotionally-charged argument with a debtor can only hinder the collection effort.” – Dean Kaplan, Basic Strategies to Promote Debt Collection Success, The Kaplan Group; Twitter: @TheKaplanGroup
21. Get proactive about debt recovery using analytics and account receivable scores. "Effective debt collection starts with a paradigm shift. Instead of thinking about unpaid accounts in terms of ‘collections’ and ‘bad debt,’ start thinking about your entire accounts receivable cycle. Just as preventive medicine can keep patients from getting sick, a holistic approach to finance can improve cash flow and help you predict future obstacles.
“That’s why we use analytics to score our customers’ accounts receivables and to help them avoid unnecessary risks. If you have an effective accounts receivable management strategy in play, you won’t have to face collections as often.
“Does this mean that you’ll never have to send an overdue payment notice? Probably not. However, you won’t have to worry about bad debt crippling your business because you’ll make smart, holistic financial decisions for your business.” – 3 Debt Collection Strategies That Work, TSI; Twitter: @tsicotweets
22. Give debtors options. “If you’re going to pay debtors a visit or give them a call, keep these handy hints in mind to ensure better results:
23. Have policies for handling risk-based collections. “You will also need to set up policies for the handling of risk-based collections. A lot of things can happen during the process that affect how it needs to be handled. Sometimes the client has suffered personal tragedy, and in that case your agents may need to approach them differently. You may also encounter issues with client excuses, clients unable to be contacted, and other problems and obstacles that you can’t expect to be part of the normal process for a collections officer. You need to lay out strategies and policies for your employees to use when these obstacles arise, in order to handle the situation as efficiently as possible.” – Laura Castello, Best Practice #4: Well-Defined Collection Strategies, Dunforce; Twitter: @dunforce
24. Help debtors pay you. “Make it easy for the customer to pay you.This may seem like common sense, but it’s an element that is often overlooked. Offer all standard payment options. Ensure that your invoices have the correct contact information and postal address for remittance. Include a payment envelope with the correct remittance address. Use invoices that make it easy for the customer to remit, as well as easy for them to keep a record of the invoice and payment.” – 13 Strategies to Speed Up Collections, ABC-Amega Inc.; Twitter: @ABCAmega
25. In the early phases, cooperate with the customer to work out a solution. “During early phases, focus on working out a solution with the customer, giving high priority to the protection of the customer relationship. The aim is to minimize the number of cases moving through the later stages.” – Chris Maranis, 12 Steps to Achieve Excellence in Debt Collection and Recovery, EXUS; Twitter: @EXUS_IT_COMPANY
26. Instill a sense of urgency in debtors. “The moment of power in every collection call is the moment when the collector truly discovers what is important to the consumer. The collector should understand how to take what is important to a consumer and ethically turn that into an immediate desire to pay.” – Brett Sivits, The Collection Equation: Seven Tips for Effective Debt Collection, insideARM; Twitter: @insideARM
27. Make debt collection friendlier. “Rather than teaching his employees how to wrestle money from consumers, [Richard] Doane [president of the Association of Credit and Collection Professionals International (ACA)] has begun training them in the art of customer engagement. The classes employees take today could easily be mistaken for ones taken by sales associates. Negative language that was once standard around the office has now been banned. People are no longer called ‘debtors,’ but rather ‘customers.’
“And Doane isn’t the only debt collector hoping to change the relationships between debtors and debt collectors.
“San Francisco startup TrueAccord bills itself as the antithesis of the standard debt collections firm. ‘Our view is that good people get into debt and it happens to everyone,’ says Ohad Samet, co-founder of TrueAccord. ‘The way to treat people is not like they’re criminals or to chase them, but to try to understand why they haven’t paid.’” – Mandi Woodruff, Debt Collectors are Trying a New Strategy to Win People Over: Friendliness, Yahoo Finance; Twitter: @YahooFinance
28. Only negotiate with decision makers. “Whenever you’re negotiating either the contract or a delinquent debt, make sure you’re negotiating with someone that has the authority to make decisions. Avoid the frustration of negotiating with a bookkeeper with no real authority. Deal with someone who can actually move the ball forward.” – Alex Barthet, How to Collect Your Construction Accounts Receivable – 10 Business Debt Collection Strategies that Work – [VIDEO], The Lien Zone; Twitter: @thelienzone
29. Prioritize collections. “It usually makes the most sense to direct the collection staff at the largest invoices, since the return on their time is greatest. An alternative is to use a third party credit analysis firm to determine which customers are in the best financial health, and target those invoices payable by them.” – Debt Collection Strategies When Customers Don’t Pay, AccountingTools; Twitter: @AccountingTools
30. Recover debt fairly. “Significant improvements have been made in this area, with both DCAs and utility companies more focused on, and sympathetic towards, consumers’ predicaments and financial positions. The old labels of ‘can’t pay’ and ‘won’t pay’ didn’t take account of the various groups and individuals in those categories. ‘Can’t pay’ fails to recognise major life events such as suffering from a terminal illness, bereavement or loss of a job – which need to be better understood and fall outside of the mainstream collection cycle. ‘Won’t pay’ doesn’t acknowledge the possibility that DCAs and suppliers might have to review their own procedures. Has the customer been billed correctly? Is there a dispute on the account? Is the correct information being provided to them in a manner that is suitable for them? These labels are now being broken down as DCAs recognise that a single strategy approach to collections is not conductive to treating customers fairly, nor maximising collections.” – Paul Newton, The New Face of Debt Recovery, Utility Week; Twitter: @UtilityWeek
31. Regularly call debtors. “Calling a client who is in debt once a week is significantly more effective and economical than sending written debt collection communication.
“Be confident when you are speaking with your customer and be prepared for their responses by having a follow up process for whatever they may say. For example, if the customer says that they have never received the invoice, then email them a copy while they are on the phone, and confirm they have now received it.
“To understand when your overdue debts will be paid, ask them when you can expect payment and confirm the date and payment method before closing the call. This will hopefully confirm a commitment from the debtor and have verbal confirmation of when you can expect their account to be reconciled.” – 5 Debt Recovery Tips to Collect Outstanding Debt Quickly, Marshall Freeman
32. Renegotiate the debt. “Most of your defaulting customers have good hearts. They never intended to hold on to your money for long. But many of them defaulted due to unforeseen circumstances, such as credit card debts, loss of a loved one, business crisis, and so on. No doubt, these problems will make it difficult for anyone to pay up their outstanding debts.
“But you can still get back your money from defaulting customers who are facing difficulties by renegotiating their debt. You can either relieve a fraction of their debt or arrange a friendly payback schedule with them.” – 10 Fail-Proof Business Debt Recovery Strategies and Ideas, ProfitableVenture.com
33. Take a Customer-Oriented Approach to Collections. “Today, many of the 58 million Americans who have debt are carrying delinquent balances for the first time. As most Americans have not historically been burdened by delinquent balances, FIs can capture the value of these first-time debtors as past and, potentially, future good customers. This new customer dynamic is one with strategic implications that can be incorporated into today’s collections strategies and operations. Deploying a more customer-oriented collections program provides four compelling benefits to FIs, including (1) collecting more and higher payments, (2) reducing operational costs, (3) decreasing charge-offs and (4) strengthening long-term customer loyalty.” – Julie Austin and Vytas Kisielius, Leveraging Collections as a Customer Retention Tool, TSYS; Twitter: @TSYS_TSS
34. Take a personalized approach to debt collection. “The debt collection process is not pleasant to the agent, nor the debtor. Therefore, it is important to make it as less painful as possible. Key to this is segmentation. Not all debts and debtors are the same and debt recovery companies need to adopt a personalized approach according to the debt age, customer scoring and payment agreements
“It is important to choose the right channel mix for every segment. So, for example, if a person has missed only the first payment, a reminder from the debt collectors by email or SMS might be sufficient. However, if it's already a recurrent issue, the debtor should be additionally contacted by other channels, such as the phone.
“Additionally, debt collectors should be provided with different guiding scripts for different segments. A personalized approach to debt collection will highly increase the success chances and the amount of the recovered debt.” – Debt Collection: Increase Your Debt Recovery Rates, Altitude Software; Twitter: @AltitudeSoft
35. Transform debt collection into a customer relations management program. “One of the most pertinent aspects that ICICI Bank had to pay attention to was debt recovery. Although the primary function of recovery agents is to ensure debt collection, the bank wanted to carry out the process delicately without losing its customers. Thus, the bank introduced customer-friendly practices, which, in addition to ensuring collection, were aimed at improving customer relationships and its own brand value.
“ICICI Bank’s defaulter bucket comprised serious delinquencies (high risk) and early delinquencies (low risk). The bank employed a ‘centralized debtors’ allocation model’ to allocate the right set of delinquent cases to the most appropriate collection channel. The bank uses multiple channels for debt collection. This includes non-intrusive channels such as SMS, e-mails, IVR, dunning letters, and reminder calls through the call centers, which are used to handle early delinquencies. The serious delinquents require a personal visit or may even need initiation of legal action.” – Sharon D’Souza, Improved Debt Collection with BI: An ICICI Bank Story, Computer Weekly; Twitter: @ComputerWeekly
36. Transform debt collection into customer service. “Inside it looks like any other collection agency – but if you listen in on the calls, you realize it’s not. The company is owned by Bill Bartmann. Bartmann operates on the basic premise that people in debt – don’t have money. So why brow beat ’em?
“Bill says he does not hire debt collectors. Instead, he hires people with customer care experience. And rewards them – not for how much money they bring in — but for how many free services they provide.
“The goal is to get debtors back on their feet – be it through government assistance, housing, even helping build resumes. Bill says his company will even fill out the application and schedule the interview for their clients. ‘Because if I can get you out of debt, you will have more money to pay me later,’ said Bill.” – Steve Hartman, Debt Collector Thrives with Simple Strategy: Kindness, CBS News; Twitter: @CBSEveningNews
37. Use systematic follow-up after the initial contact with delinquent customers. “After the initial contact with the delinquent customer, it is important to keep additional contacts on a strict schedule. If the collector, for example, is told that a check will be mailed in a few days, it should be noted. If the check is not received at the promised time, a follow-up is essential, otherwise the collection effort will become ineffective.
“Systematic follow-up of accounts, even those which cannot pay immediately, reinforces the serious nature of the outstanding debt and emphasizes the importance attached to it by the creditor. That in itself is an important collection advantage.” – Principles and Methods of Collections, The Credit Research Foundation
38. Automate revenue recovery processes. “Credit cards are an extremely convenient way to pay for online purchases. However, subscription businesses can face challenges in successfully completing recurring payments via credit cards. This is because after the initial payment at signup, various factors can cause the recurring payments to fail. The most effective way to repair the transaction—and thereby “recover” this revenue which would have otherwise been lost—is to employ automated tools and processes.
“An automated revenue recovery process minimizes revenue lost to failed transactions and bad debt. It can also alert businesses to potential collections problems early, providing an opportunity to remediate them. Data shows that past due invoices are more difficult to collect the older they become. An automated revenue recovery process also minimizes churn caused by payment declines.” – Marilyn Latham, Best Practice: Automate the Revenue Recovery Process, Recurly; Twitter: @recurly
39. Centralize debt collections. “More than one-third of respondents have considered or recently implemented a centralized collections strategy for multiple debt types within a single agency. In our observations, we have seen dramatic improvements where states have pursued this strategy. As such, centralization is a significant and likely opportunity for states over the next few years. Such strategies effectively enable organizations to achieve the critical mass and focus necessary to:
– Government Debt Collection: An Untapped Source for Increased Revenue and Sustained Fiscal Fitness, NASACT and CGI; Twitter: @nasact and CGI_Global
40. Deploy the most effective communications strategies for customers. “To drive customer engagement, being flexible in communication channel and timing is vital. Research shows us that whilst many customers react best to a phone call or letter, 24% prefer email or SMS. Contact channels and timings should be tailored to each customer’s profile. A deep understanding of each customer and their circumstances can enable the business to deploy the most effective communications strategy for them, increasing the chances of engagement and payment.” – Lloyd Birkhead, Striking the Right Balance: Debt Collection and Treating Customers Fairly, Echo Managed Services Ltd.; Twitter: @Echo_MS
41. Enhance collections strategies with advanced analytics and alternative data sources. “Many institutions rely primarily on account balances or credit scores to prioritize delinquent accounts and determine collections strategies. But this is only part of the equation. To more accurately prioritize delinquent accounts and determine enhanced collections strategies, lenders should apply analytics that consider both the probability of recovery and the expected dollar amount to be recovered. Leveraging predictive modeling can help determine the loss exposure under a range of collections strategies by forecasting each borrower’s likelihood of repayment as a function of each strategy, which in turn can help identify the ideal collections strategy to implement.
“Of course, the models should also account for the fact that expected loss may change over time. Contributing factors include depreciation of a vehicle used to secure an auto loan, adjusting the credit limit of a credit card, or declining property values.” – A New Normal in Consumer Debt Collections and Recoveries: Focusing on Compliance While Delivering Results, PricewaterhouseCoopers; Twitter: @PwC
42. Implement modern tools. “Significant improvement in debt collections can be achieved by implementing modern case management systems that use predictive modeling results to determine the most appropriate treatment strategies. Such systems should be configurable to the government organization’s unique needs, without requiring extensive customization.
“There is a significant difference between a collection tool designed for government and one that is force t to manage the unique collection capabilities allowed for government debt collection (e.g. wage garnishments, bank levies, liens, etc.). Additionally, modern tools should support growth in operations to include new best practices, while maintaining unique business rules, statutes and existing best practices. Using an experienced team to identify gaps between current operations and a model collections organization allows for the best application of new technology.” – A Proven Path for Improving Government Debt Collection, CGI Group; Twitter: @CGI_Global
43. Offer multiple payment options. “To help with the prompt collection of payments, your merchant service receipts should be collected within 24 hours. Offering your clients a wide variety of payment options can also expedite collection. These payment options may include credit cards, debit cards, corporate purchasing cards and fleet cards.” – Joseph Benoit, Build an Effective Collection Strategy | Collection of Payment, Entrepreneur; Twitter: @Entrepreneur
44. Promote online payments via patient or customer portals. “Payments should be easy and stress-free. Promote online payments via patient portals as a way to give patients the convenience of paying through a secure connection from the comfort of home. Online payments save time and resources as you don’t have to deal with physical paperwork, and you can collect payments faster.
“Not only will online payments help patient collections, it allows you to promote your patient portal. A patient portal is the foundation of online medical care and a gateway between provider and patient. The portal supplements the patient experience by keeping patients involved and educated, which leads to better health outcomes.” – Kevin V. Nguyen, Three Best Practices to Maximize Patient Collections, PrognoCIS; Twitter: @prognocis
45. Use AI to reach customers more efficiently. “The timing is good, though. Artificial intelligence, chatbots and self-service technology have reached a point where they can provide a much-needed makeover to the collections process. Such technologies can help lenders learn to reach out to people at times and in channels that are more conducive to a conversation and repayment. They can help engage borrowers in a negotiation about their debt that can result in far higher repayments than repeated threatening phone calls.” – Penny Crosman, Can AI Make Debt Collection Smarter and Easier?, American Banker; Twitter: @AmerBanker
46. Use analytics to understand customer behavior. “Analytics is increasingly used to better understand customer behavior. For a utilities company, using data to determine which customers are most likely to pay their bills and then treating them accordingly is proving to be a powerful tool for increasing collected revenues while decreasing collections costs. Jay Reseigh, head of the Vertex Analytics department, explains, ‘The combination of analytics that predict customer behavior, such as likelihood to pay back debt, with a proactive, targeted and customized messaging solution is driving significant and exciting benefits for our clients. This project substantiates a key Vertex value proposition to the utilities industry in North America.’” – MSD Applies Targeted Debt Collection Strategy Using Vertex Analytics, Business Wire; Twitter: @BusinessWire
47. Use data to develop effective collection strategies. “Given the costs involved, it is imperative that credit providers fully leverage the data (both internal and external), people and technology resources they have at their disposal and devise insight-driven collections strategies that maximise recovery rates while managing costs.
“While effectively managing debit order payments may reduce the flow of accounts into collections, a book will always experience some level of defaults. Organisations must ensure that the accounts rolling into their collections queues are prioritised and actioned appropriately based on their evaluation of the risk and opportunities associated with overdue consumers. Credit providers will want to be first in line to collect against consumers who have multiple debt obligations through various service providers. Collectors should obtain comprehensive insights on the consumers by analysing both internal and external data and then use these insights to develop their collection strategies effectively. They should then be flexible enough to be able to adapt their strategies based on what these insights are telling them.” – Claire Ferguson, Using Data Insights to Optimise Debt Collect Strategies, TransUnion; Twitter: @TransUnionSA
48. Utilize automated reminder systems. “Developments in technology are giving companies and agencies much more efficient ways to adopt the softer, more consumer-friendly approach to payment collection.
“Automated reminder systems are fast becoming an essential tool of collection departments. Their ability to send thousands of customised, personalised messages via their customers’ favourite communication channel—whether that’s text, email and/or phone—can make a huge difference to a company’s Days Sales Outstanding.
“And it seems that rapidly changing consumer attitudes are encouraging the growth in this technology.
“According to the 2016 Remind Me Generation Report, in March 2016 about 42% of consumers said they wanted companies to communicate with them by text. Just a year earlier, that percentage was only 16%. Millennials are driving the demand, yet 26% of adults over 55 also want text messages, so it’s not just youngsters that value text reminders.
“Those customers that would still rather be contacted by email or voice message need not be concerned. Premium automated reminder systems can send messages using different channels according to customer preferences. If the preference changes, so does the reminder service.” – Daniel Schurr, Consumer Debt Collection: The Latest Trends Influencing Companies, Alphacomm Solutions; Twitter: @alphacommsecure
49. Utilize solutions that are industry-specific. “An airline that deploys a solution that doesn’t, for example, facilitate interlining revenue collection and isn’t compliant with IATA standards, adds unnecessary complexity to the system. Look for solutions that support industry-recognized controls to minimize revenue leakage and include capacities such as Charges Correction Advice (CCA), automated validation and processing of transactions.” – Michele Drummond, How to Maximize Revenue Recovery and Restrict Airline Revenue Leakage, Accelya; Twitter: @AccelyaGroup
50. Utilize technology to improve debt revenue recovery rate. “Can your dialer send an SMS to a customer the moment it recognises an engaged tone? Would your collections platform allow that same customer to go from your email reminder to a direct debit instruction on your website within a couple of clicks? Do all your call centre staff have access to intuitive dashboards with a single customer view with all the relevant information? Is your collections platform flexible enough to enable your analytics team to test and adapt strategies within a few hours? And does your technology in general automate the mundane, low-value activities while improving transparency and auditability? If not, then somebody somewhere – most likely at a rival – will have a satisfied smile on their face.” – A Fresh Perspective: Collections Strategies for the Digital Age, Deloitte; Twitter: @Deloitte
What debt revenue recovery best practices have generated the best results for your organization?
Learn how this customer realized 4x ROI in year one using CallMiner for collections