ARM Firms Leverage IVR Technology to Lower Costs

Companies that provide interactive voice response (IVR) devices and services tout them as ways that collection firms can be more efficient and can weather some of the difficulty of increased placements with a tougher collection environment.

Most basically, IVR is interactive technology that allows a computer to detect voice and keypad inputs. In the collection context, IVR allows companies to broadcast a large volume of calls at one time with no operators. If the call connects to the correct live person, the call is routed to a collector. Calls can also route to other automated systems.

The central argument for IVR is cost reduction. When combined with dialer campaigns, IVR can accept collections automatically, expanding the amount a firm can collect without the need to expand human collectors.

Darrin Bird, executive vice president of Mays Landing, N.J.-based Global Connect, said that one firm made more than $30,000 in collections by spending only $20 on the firm’s hosted IVR solution. The collection agency was already a Global Connect payments customer, so it only had to pay for the per-minute rate for the hosted solution. Firms using only the IVR and none of Global Connect’s other services would pay more.

Bird also pointed out that the success of his customer or any others using IVR technologies is largely dependent on proper analytics, a sentiment that many of his competitors echo.

“Using analytics and scoring can help you segment your customer base,” Bird said. “IVRs work best with certain select segments.”

Often an IVR is good for making the next contact after a letter has been sent, according to Bird. But the best way to know when an IVR will be the most effective, and produce the best return, is to look at the collection firm’s own history with customers, campaigns and other metrics.

“Not every [debtor] is comfortable using an IVR,” Bird said, adding that first-time contacts and low payment amounts (e.g., cable bills) tend to offer the best response rates for automated calls and collections.

Bird also said that he augments his firm’s own IVR offerings by asking employees how they would respond to certain scripts, options and other changes.

As part of analytics, collection firms should look at key words and sentiment (e.g., tone of voice) used by both the collector and the debtor to tweak collection campaigns and techniques, said John McNamara, chief marketing officer for LiveVox, Inc. in San Francisco.

“Listening to key words and sentiment will give you a road map to understand what works,” said McNamara, explaining that collection firms should constantly be analyzing techniques and refining them as the analysis dictates.

“We are seeing wider, faster adoption [of IVR-based technologies],” McNamara said. “There is a larger percentage of the population willing to self-pay.”