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Collection Companies Are More Like Procter & Gamble than the L.A.P.D.
From where do the best people in collection companies get their most valuable skills? Is it from the police? They certainly need to have good detection abilities to trace those who skip. Perhaps it's from bounty hunters? After all--like Dog the Bounty Hunter--people who work for collection agency services get rewarded for finding bad guys who really, really don't want to be found. Or is it from lawyers? Well, they have to enforce sometimes complex contracts, while walking through a regulatory minefield, so they sure need to know the law.
But no. As valuable as all those skills are, people who work for collection agency services are actually in… (wait for the drum roll)… sales and marketing.
Collection Agency Services Must Embrace Reality
Whether meeting face-to-face on the doorstep, talking one-on-one on the telephone, writing personalized, boilerplate letters, or defining their target audiences, those who work for collection companies need the prospect whom they're addressing to agree that they will make paying their debt the number one priority.
And that is just as much a sales and marketing task as Buy this toothpaste or Buy this used car.
Collection Companies at the Cutting Edge
Those who work in collection agency services, but who yearn to work in law enforcement, have no reason to despair. Many of the technologies used on CSI are fictional, either in their very existence, or--more often--in their application. A DNA profile in 90 seconds? Yeah, right.
However, the technologies used in modern collection companies are both real, and highly effective. And they were originally developed to achieve sales and marketing goals.
Take what we used to refer to as "call centers." They're now "contact centers" because today they're as open to Web connections, emails, and faxes as they are to telephone calls.
And that's great. Because many, many debtors are scared to talk to a contact center agent who's aggressively chasing them. But they feel in control if they're interacting with an avatar (a computer generated "person") on a collection company's Web site. Because she (it's almost always a female avatar) never loses her cool, and is just as empowered as a real, live agent to agree a repayment schedule.
Yes, almost all the contact center technologies that collection companies deploy (automated dialing, IVR (interactive voice response) menus, intelligent routing of calls, and so on) were developed for marketing purposes. If it looks like a duck, walks like a duck, and quacks like a duck, then it usually is a duck. Collection companies are marketers.
Collection Companies Are Like Banks--Maybe
But perhaps the most valuable technology tool for collection companies is one that is already widely used by sophisticated marketers, such as banks: profiling. Marketing profiling is an easy concept to grasp.
A woman calls her bank to query her balance. The bank's computer recognizes her telephone number (work or home), so it instantly knows everything that the bank itself has ever learned about her. It'll even route her call to an agent who's already dealt with her--if one's available.
The agent who answers the call tells the customer her balance, and then reads her a script that has "popped" (automatically displayed) on his screen. The bank's computer knows that single women in the caller's age range (35-54 years, say), who have an income and personal circumstances that are similar to hers, are the most likely customers to buy the particular product that the agent's script is selling: maybe a savings plan.
That's why that particular script (as opposed to the dozens of others that were already loaded onto the system) popped on that agent's screen for that individual's call. Of course, the bank's computer doesn't know everything, and it sometimes gets things wrong. But it knows that any caller like her is a member of the group that is most likely to buy the product offered. It's called someone's "propensity to purchase."
Making Collection Agency Services More Profitable
That sort of profiling is already being used in many technologically-advanced collection agency services. When collection companies receive a new batch of debtors from a client, they can quickly segment the list, and score every individual on the basis of their "propensity to pay up."
The smart agency then starts with those who are most likely to settle, and works down the list until pursuit becomes unprofitable.
And, in today's tough economic environment, marketing tools such as these can make the difference between a positive, and negative bottom line for collection companies.
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