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This article was published under the client's by line
in a trade publication.
Collect More Money and Reduce Bad Debt:
A Framework for Success
Across the board A/R departments face the same basic challenge
- collect more money and reduce net bad debt. Companies issuing
regular monthly statements to their customers, however, often
find themselves chasing dollars after every billing cycle.
Is there any way for credit professionals to improve the ability
of their collection centers to pull in more dollars owed?
It's Not What You Think
To get a handle on how to improve performance and collect
more dollars, it's important to understand that the collection
contact center does not easily fit into the generic contact
center mold. There are distinct and important differences
that make its operation and management especially challenging.
Most collection centers deal with three primary transaction
processes - inbound calls, outbound calls, and off-line transactions
- each with its own distinct requirements. Now consider that
the entire operation lives in the collections, rather than
the customer service, environment. This is an environment
where the focus is on selling skills and the objective is
collect the debt, regardless of how the transaction originates.
Because the focus is different, there are management issues
not easily resolved using standard customer service center
techniques. Perhaps the most critical is the need to integrate
the three types of transaction processes and balance their
management with multiple systems and metrics. Companies that
fail to do so effectively measure the cost in millions of
uncollected dollars.
Why Have Some Efforts Failed?
So, how does a collection center integrate its processes
to achieve optimal performance from each transaction? Improved
management. Learning how to use staff, time and processes
across all three types of transactions in order to optimize
the outcome of every customer touch. It comes down to things
like: using skilled selling techniques; capturing Right Party
Connects immediately; increasing Speed of Answer; implementing
timely off-line systems; efficient and flexible multi-skilled
staffing and scheduling; and measuring performance.
Granted, to many collection center professionals this is
merely stating the obvious. Of course the way to jack up dollars
collected is to get better at what you do. And many have tried
performance improvement initiatives with varying degrees of
success. Most, however, have not seen the results they had
hoped. Many more have found managing and maintaining the initiatives
nothing short of an administrative nightmare. Why? Lack of
an essential key to operational excellence - a well-designed
performance improvement framework. The proper framework organizes
and focuses effort, identifies weaknesses, provides a basis
for measurement, and creates an environment for continuous
improvement. By doing so, it helps managers marshal existing
resources to the central objective of collecting more money.
A number of telecommunications, bankcard, and utilities organizations
have already recorded cash injections upwards of $25 million
using framework-supported initiatives. Implementation of a
performance improvement framework targeting inbound, outbound
and off-line transactions, has allowed their collections center
to increase efficiencies using existing staff and processes.
How You Can Make It Work
Managing each of the transaction processes requires specific
skill sets. Managing all three functions simultaneously not
only demands expertise in each individual process, but a working
understanding of how to optimize the three simultaneously.
Realistically, most companies are proficient at only one of
the three transaction processes. Most struggle with the task
of coordinating all three into an efficient and effective
collection center. This is where an intelligently constructed
framework becomes indispensable.
Integrating management of the three primary transaction processes,
a well-designed framework should provide improvement in a
number of areas critical to collections.
Outbound Calls - Simply stated, reaching the person
that will cure the debt (Right Party Connect) increases total
dollars collected. Right Party Connect (RPC) is dependent
on right time of day calling and the characteristics of the
person being called. Use of a predictive dialer system to
manage rate of calls maximizes the peak RPC timeframe and
the window of opportunity for resolution. An effective framework
will increase productivity of the dialer, ensuring that an
increased percentage of calls that arrive in an agent's headset
are RPCs.
Inbound calls - For inbound calls, meeting the Speed
of Answer target is key. After all, people calling to make
payment who tire of waiting and hang-up are lost dollars.
Look for a framework that will provide for optimal staffing
and scheduling based on call arrival patterns. This will improve
service levels and dramatically reduce abandonment rates.
Off-line transactions - The off-line transaction process
is all about getting it right. Having the right information
ready at the right time - for either inbound or outbound calls
- has a direct impact on the overall effectiveness of contact
center operations. For instance, notating the account with
bankruptcy notices or expired credit cards eliminates time
wasted on calls that have no possible resolution. If the provider
you are considering understands this, their framework will
incorporate an efficient backlog technique that improves accuracy
in off-line processes.
Workforce Optimization - Staffing and scheduling are
the heartbeat of the collection contact center. Because of
the over-arching goal to collect dollars through the effective
application of selling skills, a blended or multi-skilled
staff, not practical in customer service organization, is
a valuable tool in the collection center. Learning how to
integrate staff as well as processes gives added punch to
controlling costs and getting the most from available resources.
Select a performance improvement framework that includes
a strategy for workforce planning that allows you to manage
all three primary transaction processes simultaneously. One
that covers improvement in the areas of forecasting, scheduling,
and staffing in a way that impacts workflow and the alignment
of a multi-skilled staff. This should include systems and
tools for recruiting, establishing minimum skills requirements,
and performance evaluation. These will enhance efficiencies
and bring cohesive management to the entire collection process.
Basics of a Solid Framework
Optimizing a collection center's dollar collected is a complex
process. In selecting a performance improvement framework,
it is critical to select a provider who has the track record
and expertise to effectively address the issues related to
one of the biggest challenges - managing inbound, outbound,
and off-line transactions - individually and simultaneously.
Any framework considered should be evaluated based on its
ability to provide support by:
- Identifying and implementing measurement of metrics specifically
related to the collection processes, ideally by providing
benchmark review.
- Developing a multi-skilled workforce that integrates functions
and maximizes the effectiveness of the entire collection
staff by implementing performance improvement and workforce
management tools across all three types of transactions.
- Providing e-tools, tailored to the needs of the multi-faceted
environment of the collections contact center that help
manage in real-time, day-to-day.
- Improving planning and management of the entire collections
process - inbound, outbound and off-line - based on proven
methodology and actual contact center experience.
Conclusion
Collect more money and reduce net bad debt. The direction
and support of a performance improvement framework has become
an effective way to do just that. Utilizing tools and management
techniques proven to improve the operational performance
of each transaction type and then forging the entire process
into a powerfully efficient collection center will increase
the number of times each day that staff finish a call by
collecting the debt.
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