Creating or refining a plan for assessing collection vendor partnerships is easily achieved, can be quickly implemented and will produce positive, short- and long-term effects. Here are three main areas to consider when evaluating your current and future partnerships:
1. Performance Scorecards
How do your agencies compare? Are there trends in performance? What performance metrics are important to you? To them? If you partner with more than one agency, scorecards are a must. Creating a platform to consistently compare key statistics will allow you to make future adjustments and decisions that create a positive impact on your bottom line. Implementing a formal scorecard process will not only boost competition – and in return performance – it will also help your agencies better understand what metrics are important to you and how they can adjust strategies to improve overall performance.
2. Net Back
What is the ROI of your collection agency investment? What factors affect net back? In today’s world with cost pressures coming from every angle, it’s important to realize that lowest price isn’t always the best. In many cases, the old adage is true, “You get what you pay for!” Instead, the best option is best overall value. Calculating and monitoring this key statistic will allow you to best understand the value of your collection partner’s performance. It will open the door for communication with your agency partners on ways both parties can make adjustments that generate an increase in net back.
Are your agency partners able and willing to take the extra step to assist your customers? How do they accommodate them and their ability to pay? Do your agencies hurt your brand or do they promote your reputation in the community? Customer advocacy is more than being nice. It involves taking the time to listen and understand, as well as to create win-win solutions, convenient payment and communication options. Conduct random monitoring sessions with your vendors’ associates or ask for call quality analysis. Compare the availability and ease of use of communication portals and payment options. You may even ask returning customers for feedback on their experience.
Agency scorecards can be a simple process to implement that will yield many benefits. I’ve seen this not only increase performance overall, but provide a way to systematically measure your agencies and make informed decisions on how to manage your collection strategies. Our experience with clients’ performance assessments range from third-party agency comparison services to self-managed spreadsheets and charts. We have even helped several clients establish their own agency scorecard. Either way, they achieve the same outcome – increased ROI that impacts the bottom-line.