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What Your Collections Need to Go Virtual

  • Written by Joshua Fluegel

Virtual Collections Software Roundtable

Some would say virtual collections is the last frontier in debt collection, the omission of the debt collector completely. While it is highly unlikely collection floors will empty in our lifetime, the prospect of automating a time consuming portion of debt collection is tempting for the budget-minded. Collection Advisor rounded up the thoughts of thought leaders on the subject to analyze key analytics and what they could mean for virtual collection software implementation.

Carl A. Briganti President and founder of CSS, Inc.

briganti carlWhat key analytics allow collection professionals to modify and improve collection efforts?
There are a variety of key analytics that collection professionals are recommended to utilize and evaluate to modify and improve collection efforts including: account type, age, number of agency placements, file penetration, and others. This is why agencies are strongly urged to employ powerful reporting tools and real-time dashboards to provide this crucial information at both point-in-time and on a regularly scheduled basis.

What advice would help an agency best integrate virtual collection software into its collection efforts?
Virtual collection software is designed primarily for accounts with higher liquidation rates or are in the beginning stages of delinquency. Old, recalcitrant accounts will not benefit from this approach. The deployment of a virtual collection application will help an agency engender payments with a “soft” recovery approach. It would benefit the agency by saving from paying commissions, internal or external, when a debtor would pay regardless of the approach.

 

Matthew Hill President / CEO of InterProse

hill matthewWhat key analytics allow collection professionals to modify and improve collection efforts?
One of the most important data points that facilitate “tuning” of a virtual collection platform over time are the bail-out points. This is a tool that tracks the point where the consumers break the engagement; if before payment resolution, then when and where? For example, this knowledge can help us find off-putting or confusing language. By identifying flaws that can be reworked or moved to a more suitable place in the session.

What advice would help an agency best integrate virtual collection software into its collection efforts?
Use every possible communication channel available to drive the consumer to the site. Statistics show that nine out of 10 consumers prefer online to live collectors. If a site has the advanced capability to handle multiple debt types and complex offers, then you truly can divert as much as 15%-20% of all payments to a virtual agent with the bonus an additional lift in the dollar amount of payments.

 

Albert Rookard President and CEO of Applied Innovation

rookard albertWhat key analytics allow collection professionals to modify and improve collection efforts?
There are many responses to this question which are valid. Let’s start with the math. The investment in a collector for a month is $3,000. In an eight-hour work day they obtain 25 promises to make payment. Over a 21-day work month that’s 525 arrangements. The cost is $5.71 for each arrangement made. ($3,000 / 21 x 25) = $5.71

Okay? So far so good. Now, what if a virtual collection system can do the same work for something like 50 cents. That’s 8% - 9% of the current cost to obtain the same thing…a promise to make a payment on an account.

Additionally, a virtual collection system can use many of the tools available to a live agent when determining what is or is not an appropriate repayment plan, such as age of account, client, scoring analytics, balance, date of last payment… just to name a few. The decision tree can be every bit as complex as the creditor or agency would like it to be, even to the point of understanding prior “discussions” between the virtual system and the consumer.

What advice would help an agency best integrate virtual collection software into its collection efforts?
Do it. The risk is nearly zero. For every payment captured by way of a virtualized collector, resources are freed for other endeavors. Live agents can then spend their time on broken arrangement follow up or skiptracing. A virtual collection system, used fully, creates efficiencies in many areas.

Give it the attention it deserves. How many hours or days are spent hiring and training a new collector? Yet, a virtual collector may be addressed once and left to run on its own, utilizing the same strategies created with its original “hire.” Check into your virtual collector with some frequency. How is he/she doing? Effectiveness of the collection approaches. Review the language used to best develop confidence in the consumer and prompt a high frequency of payments.

Encourage consumers to “discuss” their accounts with the virtual collector. It’s in a safe environment that allows them to look and review repayment options at a time convenient for them. A link from a website or provided on a notice encourages exploration of the virtual option.

In the end, and if you so choose to implement a virtual collection system, use it as you see fit. Maybe conservative in the beginning with tweaks along the way to find where it best fits into your overall strategy.