Business Operations, Economy, Finance, Technology
The fight for one wallet… How to get paid before your competition…
Apr 21, 2022
Jordan Akins
![Fight for One Wallet](https://totalcollectr.com/wp-content/uploads/2022/04/The-10-Ways-Improves-The-16.png)
While debt recovery has never been an easy task, there was a time it used to be more straightforward. When a customer defaults, just make a few phone calls and ask them to repay their balance, and if you are lucky, the call ends with a payment. Today, the world is a different place. Customers often receive calls from multiple debt collectors and collection agencies competing to recover their debts. While one wins this race, the pressure of collections mounts on the remaining agencies, increasing their cost-to-collect and draining them of capital and resources.
Can you win this race where many established and growing collection agencies compete for one wallet?
In most cases, customers in collections with one debt collector are likely to have fallen behind on multiple debts. In this scenario, various banks and debt collectors try to reach them and secure payments. It is not just about who gets to the wallet first. It is about competing with large, well-equipped, and resourceful agencies.
To step into the big leagues with the giants of the ARM Industry, you need to have better strategies. An outdated playbook for collection strategies cannot help you meet your expectations. Using the same approaches, tools, and techniques meant for yesterday’s world cannot help you increase your debt recovery rate. You need something that wields better results and sets your collection strategy apart from your competitors.
Where did it go wrong with phone calls?
Modern times require modern approaches. Before you think about turning the tables, you need to know where your collection strategy is failing. You need a different approach to beat your competitors in the race for that one wallet. Let us take a look at a few factors which you may need to consider to step-up your collection game:
- 1. Do borrowers even want to talk to a debt collector? Think about it from a borrower’s perspective. If you have fallen behind financially, you do not want to relive your unfortunate financial situation over the phone with debt collectors. So, calls are mostly ineffective.
- 2. Since the arrival of Robokillers (software that blocks calls from all unknown sources), debt collectors are ignored easily without much thought or effort. Robokillers, combined with the fact that no one really wants to answer a phone call from an unknown number, a number that appears “scam likely”, “spam likely” on their caller ID has made reaching the right parties even more challenging.
- 3. Are you calling at the right time? If the customer is not available to answer the phone when you call, the communication starts and ends at a voicemail.
- 4. Calling is an expensive approach. It requires costly debt collection agents with training, skill, and tact to engage with customers correctly. This process increases your cost-to-collect and limits the number of collections attempts you can profitability make on an account.
- 5. It does not matter what language the customer uses to communicate with you. If a customer cannot speak English, the whole process of the collection becomes chaotic and often concludes without results. Remember, language barriers can cost you money, disrupt the collection process, and waste your time.
Little things that matter in collections:
Now, let us talk about what happens even if you get through to the customer. Remember, the first contact is a great kickstart to your collection approach, but it’s not everything. There is a lot to consider before you can collect the due.
- If communication does ensue, the stars would have to be aligned to collect from a customer. You have to say the right things in the right tone of voice, and the customer has to be in the right state of mind, willing to engage. Simply put, there are factors involved that are beyond our control. If any of these points are off, your telephone call will be in vain.
- If you can’t get in touch with the right-party contacts, you won’t be able to collect a debt. Your call may connect, but it won’t mean that you got through to the right person. Fewer right-party contacts indicate staggered revenue generation and a minimal debt recovery rate.
- Finally, telephone calls are not nearly as convenient compared to other channels, and it certainly is not the communication channel of choice for most consumers these days, especially for younger consumers. With the availability of communication channels, customer preferences have changed. Some may be more responsive to texts, some to more digital approaches, or some may even prefer phone calls. Unless you narrow down on customer preferences, collections will grow harder every day.
Use your calls wisely
You need to strategically plan your phone calls to make the most out of them. Debt collection poses serious challenges. Failed attempts put more pressure on debt collectors, who already have the stress and burden of achieving performance objectives and avoiding lawsuits.
AI helps you minimize all these problems and maximize productivity without constant supervision. Technology is changing, and your playbook must change with it.
Would you like to know more?
Deal with each of these challenges head-on. Your agency’s success depends on the right solution. Our next post will discuss how best to approach and resolve these issues. We will also discuss some creative solutions for anyone struggling with similar challenges. Be sure to follow us on
Do not miss out on these tips. Hopefully, we will be able to help you resolve these problems.