Promises, Promises

Before you can make money, you have to make debtors commit. These commitments are your “promises to pay”—dates, amounts, and payment methods offered by debtors getting ready to pony up. A collector who doesn’t get promises doesn’t get paid. And one who only gets small promises doesn’t get paid much. You have to measure the number of promises the collector is getting and what their average size is. Your database has those answers, and you know what the standard should be.

While you’re at it, measure the ratio of kept promises to all promises made for that period. A collector who has a huge number or amount of promises but not much actual cashola after the due dates isn’t getting the debtor’s attention—she’s just tying up your phone lines. Time for some monitoring and coaching there.

There’s No Business Like New Business

It’s hot, it’s fresh, and it’s the lion’s share of your paycheck. Why wouldn’t you make sure your collectors are giving your new business all the TLC it deserves?

Use the scorecard to measure the number of efforts new business has received during this period. Is 60 efforts on 30 pieces of new business enough for stuff that’s five days old? Establish a standard and see that your people are jumping at all the “low-hanging fruit”. If they’ve failed to meet the standard, you’ll be perfectly justified in moving the business to someone else that much quicker—to someone whose scorecard indicates a taste for that low-hanging fruit.

And why not measure success on the new business as well as activity? A ratio of the new business collected to the amount placed might be enlightening. Has your collector liquidated 15% of her placements with “earnest money” in the first five days? Maybe she needs some more placements.

An Anti-Money Explosion

You can boast once it posts, but don’t cheer ‘til it clears. Checks can—and do—bounce. Smart debtors like to play the “end-of-the-month payday game”, and not-so-smart collectors take you along for the ride.

Measure the percentage of NSF checks—the amount reversed versus the amount collected for a given period—to see whether a collector’s taking bad checks, pumping AntiMoney through your supercollecting machine. There could be any of a number of reasons for this problem, but at least the scorecard will make you aware of it quickly, and you can coach the collector back into this universe.

Listening In

Good managers monitor their collectors’ calls at every opportunity. In addition, there should be official “phone monitor” scores—at least two per week per collector—that indicate good compliance and good technique. Incorporate these into the weekly scorecard and attach the proper weight to them. Collectors already know management’s listening in. But when they know a negotiation fumble or a legal faux pas is likely to re-emerge on a document tied to something tangible—such as a paycheck—they’ll think twice about letting an unfortunate word slip out.

Getting Dinged

Every agency has its own special expectations that can be easily represented on the scorecard. Is there a certain number of legal referrals required each week or month? A certain number or type of letter that should be ordered? A certain number of Accurint or Merlin searches? Anything that your computer system can pick up as an action or result code can be easily imported into the scorecard and given an appropriate target and weight.

The scorecard’s also great for quantifying other expectations, such as punctuality, personal calls, complaints, FDCPA violations, and anger management problems. These “whole-employee” metrics, listed at the bottom of the scorecard, can act as subtractions to the overall score while providing fascinating topics for conversation when the manager goes over the scorecard with his collector at the end of the week or month.

It’s not enough to look at a revenue or liquidation figure for every collector every day. Let the collectors know what behaviors lead to success, quantify their progress in those behaviors, and then communicate what you’ve discovered. While there may be some griping at first, in the end you’ll have a team that knows how to do the job—and actually does it. You’ll have less turnover, better results, and more skilled staff. This, of course, means more money and a more satisfying environment—for everyone.

Christopher Coelho is the president of VISTA Consulting in Atlanta, Georgia, providing concrete solutions for collection professionals. He’s also the author of "The Complete Collection Manager", scheduled for publication in early 2008. Contact him at chris@vistaknows.com, or visit www.vistaknows.com.