As an organisation, it can be very difficult to recover debt. You have to make sure you’re getting the most from your collections team and take into consideration. Are they using their time wisely? Do you have the right processes in place to help them recover valuable revenue? Are they taking payments securely? Here’s how Key IVR helped improve the debt recovery process for clients. Not only saving them a lot of time, but helping them reduce costs and payment security risk.
Understanding Your Current Operations
Hi, Dan. As per the agenda sent through, it’s vital for us to understand your business, your client journey and the improvements that you’re trying to make. Could you give me a quick introduction, please?
Sure. I’m the operations director here at ABC limited. I manage our collections process which involves monitoring accounts to identify overdue payments, finding and contacting debtors to arrange pay-offs and reporting on collection activity.
That’s great. Can you take me through the current process your team uses to recover outstanding debt from your clients?
At the moment, we have about 10 members in our collections team, contacting up to 50 people a day. They’ll also accept inbound calls from customers wanting to make a payment.
That’s about 500 people a day that your team attempting to contact? What methods do they use to contact them?
Usually by phone, but they’ll also send emails and letters if we have information.
Can I ask, do you work from a list or do you use an automated dialer system?
It’s a list.
What statistics do you have on the call to collection ratio? We’re always very interested to see how that matches our analytics from our existing clients.
Out of the 500, about 50 people will answer the phone and 50 will be voicemail. So approximately, 10% of the time will actually get through to someone. However, I’d say only half of that will be able to pay there and then. So 5% overall, we have to try and contact the other 15% later if they don’t call back.
And what about the other 80%, Dan?
These are either dead numbers or they just won’t answer.
How Much Does Your Time Cost?
It’s clear that there’s some areas that could be improved. Let’s first look at the cost of the outbounding. You mentioned earlier that only 50 out of the 500 daily calls go through to somebody you can have a conversation with. But for the other 450, we can simply apply some industry averages, some standards from across our other clients and the cost that they see.
100 of the 500 numbers normally would be dead numbers or non-existent. We then have the bigger section which about 300 people who don’t answer and there’s no answerphone, message so just rings out. Then 50 of them where you can leave a voicemail, but predominantly you have to ring them back.
If the average wage for a collections agent is 20K, we’ll double it to include the true business cost so that member of staff, so £40,000 a person. It’s costing you around £1,400 a day to pay your team to not take payments on those calls.
Wow. I didn’t realize we’re wasting so much money to not receive a positive outcome.
Another way to look at it is, if we take the total daily cost for the collection team, which is just over £1,530 and divide by the number of payments you are actually receiving which is 25. Each successful payment on average cost you over £60 to collect that day. By increasing the success rate, we can reduce the cost per payment.
We’ve not really considered it like that. Some of the money we recover per payment isn’t even £60.
Reducing Costs Through Automation
The situation actually sounds very familiar. A current client was experiencing a very, very similar issue to yours and completely changed their approach to automating process and replacing wasted effort, this particular client then chose to reduce their contact centre by 50%. But. we have other clients that have just re-appropriated their team into other business areas that are more profitable using their time.
Okay, that’s great. But how do they manage customers that simply don’t answer the phone?
That’s a good question. For numbers that are dead, we strip them out so that they don’t get called again and we pass that data back to you. For numbers that are rung, but aren’t answered, the system is configurable to redial them as and when needed in a periodic manner. They’re very happy with the boost of payment conversion and agents are now spending more time actually taking payments or discussing accounts with customers rather than the tedious process of calling number, after number, after number.
I can’t believe how much money we’re spending to not take payments. It sounds like it could massively benefit our business and streamline current operations. But what about the cost associated with it and change management is always difficult for us.
Minimal Change, High Reward
Well, that’s normal for us. Helping businesses implement replacement automation for human activity requires no training and no change. The work your staff have to do is take 25 payments, which they’re already doing. When you have the ability to reduce your staff costs by 95%, I would struggle to come close to charging what you’re saving. It would be around a tenth of what you would previously be paying for that collection.
What I’d like to do is offer you an on-site consultancy. Look at the solutions that we think will fix the problems that you have. Alternatively, we can do that by web. We can set up a web chat or webinar and then go through it remotely. What would you prefer Wednesday or Thursday?
Thursday would be great.
Okay, morning or afternoon?
Morning is perfect.
That’s great, Dan. I’ll send your meet request over and we’ll speak to you on Thursday morning.
If you’d like to have a discussion around improving your debt recovery and increasing the effectiveness of your collections team, contact Key IVR today, and we’d be happy to help. Call +44 (0) 1302 513 000 or email [email protected]
Presented by Mark Kelly – Chief Commercial Officer (CCO) and Alistair Mackay – Head of Marketing at Key IVR