Collections is an AWFUL business! Not really, but at least I got your attention!
There are so many different and effective ways to measure performance in collections, but it truly comes down to client scorecard and your own revenue performance. We are all guilty of asking ourselves, “What is the next metric that we can measure that no one else has?” The answer … there isn’t one. They are all good and they all matter, so break them down into not what, but where they matter.
Anyone who’s known me in this business for any amount of time knows about the five metrics. It’s not a secret and I’ll list them for you below. Each time they are introduced into an organization, the first question is, “Well, do you know what is causing it?” It’s a good question, but where does it belong. At the senior level … not really. At the director level … some parts belong. Truly, the diagnostic side of the five metrics belong at the manager, supervisor and associate level. Our job as directors and VPs is to provide very clear and easy to understand measures, teach people how to diagnose themselves and rely on our teams to govern the diagnostic reasons why something isn’t happening. You’re not going to win a prize for the next best metric because thousands of them already exist and can be used in so many different ways. Anyone who knows me in this business has also heard me say, “I can make 2+2 not equal four, too!” So use your measures and metrics to show and outline whatever trends you need to, but drive the behavior, not the cause. It may sound like I’m writing with a “forked pen” here because I’ve written before about finding the root cause. That’s still true, even with this. But teach to find the root cause! If you do it each time, you will do it each time!
The 5 metrics
They are easy and really very simple because if its agent performance you’re measuring in a collections environment, KISS (Keep It Simple Stupid … I say it to myself all the time!)
- Attempts/hour – How many calls are the associates pushing out per hour?
- RPC/hour – How many right party connects are they talking to per hour?
- PTP/hour – How many promises are those right party connects resulting in per hour?
- $s/hour – Are they getting any money during those promises per hour?
- Productivity – Are they being efficient?
Now … diagnose and overanalyze away, but how you use these is up to each person. I can talk all day about all of them and how each one can help and how each one can be unique to an individual associate. One thing is for certain, when you publish it and each associate sees how they perform against their peers, the diagnostic side becomes much easier because we are a competitive bunch of people.
I introduced this to a vendor of mine years ago that went from last on the scorecard to first in about two months because all of the sudden his associates were now competing and he saw how inefficient everyone was being. He held them accountable and revenue increased. Another example happened with my own team. We introduced the five metrics, taught people how to use them (just some of the many ways) and gross collections increased from July to November (declining seasonality each month) AND with a declining staff.
In each situation, we changed one thing … we changed the environment and competitive landscape! All of the metrics that have been developed over the years are good and they all make sense, but be careful how they are being used. Break them down into overall trends and diagnose along with where they belong. It will make your life and your environment that much better because now you’re leading, not dictating.
If you’d like to know more, please reach out me and we can set up some time to discuss.