All posts tagged collections

One of the few advantages of getting older (or just plain old as my son's remind me) is it allows you to look back over a longer time frame to observe how things have changed, especially when the changes are gradual rather than abrupt.

I shared the following slide with the members of the Telecommunications Risk Management Association (TRMA) at their conference in San Francisco this week. It illustrates some of the major changes in the technology of collections over the 30 years I've been in the industry, and the impact they have had on the productivity and size of collections operations.

Do you think I am overstating the impact by suggesting that collections operations today are over ten times more productive (and thus less than one-tenth the size) than they were 30 years ago?

In some companies, perhaps.

But here are two factoids that support my assertion:

• Account to collector ratios (ACR) in 1980 were measured in the low hundreds. Now they are more typically in the low thousands. TRMA’s own benchmarking data shows the ACR in their industry has increased 33% in just the last six months!
• I have met with three large issuers of consumer credit in the past month who have no collectors at all! Sure, they outsource some of their customer contact to a third party servicer, but they are also heavy users of self-service automation that dramatically reduces their need for human agents. And their losses are lower than their industry averages, perhaps because management attention is more focused on optimizing their strategies and tactics rather than hiring, training and retaining FTE.

I started my career as a collector in 1980, tearing off my daily printout of delinquent accounts, pulling my history cards, then “smiling and dialing”. After a few years of this drudgery and then managing the same, I decided to spend the rest of my career driving technology and productivity into the process, the last 10 years with Varolii. I’m proud of the progress we’ve made together in driving collections efficiency, and we’re working hard to make this decade the most productive ever.

Have a happy Independence Day and raise a toast to American ingenuity!