You hired them and trained them. You gave them a desk, a telephone, and a seat on your collection floor. They sounded great in the interview, had plenty of experience, and their references checked out.

So why aren’t they producing?

Some managers think it’s enough to look at the revenue numbers every day and just replace the people who don’t make them money. But that’s a hit-or-miss approach that guarantees only one thing—turnover. Smart managers know what aspects of collector performance to measure and they have a tool for doing it regularly. This tool is called a scorecard, and without it, you’re in the dark about why a collector is failing.

A collector scorecard is a summary of a wide variety of collector statistics in a single easy-to-read document. It specifies standards for various collection activities, makes collectors aware of what those standards are, and measures performance against them. If reviewed weekly or monthly with the collector, and attached to some tangible benefit, it’s a powerful tool for identifying and correcting problems with collector performance.

A scorecard should be an Excel spreadsheet, into which numerical values can be imported. You should be able to query your computer system’s database for the data required in most of the measurements discussed here. See your IT whiz to get help writing the statements if you need it. The more automated the scorecard is, the likelier you’ll be to use it consistently, and that’s essential to getting a real benefit from it.

In Black and White

The scorecard doesn’t measure revenue or liquidation. Those figures should be published daily in a separate report to the collection staff. Rather, the scorecard measures a collector’s activity over a specific period of time, such as a week or a month. It lists a dozen or more specific performance criteria and the expected and actual results for each one—hard, numeric values that can’t be disputed. Each criterion is weighted, that is, has a specific value in the overall scorecard.

At the bottom of the scorecard is a final score—a numerical indicator, or “grade” for the collector’s work efforts that week. This grade can be tied to compensation through bonuses or other “fringe” benefits, such as flex-time. Even better, the scorecard identifies exactly what work efforts are lacking, and this can be used as the basis for specific coaching. All of the criteria are in black and white—the collector knows what’s expected and how she performed. There’s no room for dispute.

Reach Out and Touch Someone

Your first set of criteria involves telephone work efforts. How many work efforts overall did your computer system record for this collector over this five-day period?

Your debtor database has this answer; it’s the number of “result codes” the collector entered into the system during that period. Like most other statistics, it can be pulled up in a separate report and entered manually into the scorecard or queried directly into Excel.

You can obtain the number (and thus the percentage) of inbound and outbound contacts and “left messages” in the same way. Simply specify which result codes constitute a contact and which constitute a left message. In any case, there’s a certain percentage of contact you can expect on your portfolio—as the manager, you should have a good idea of what that percentage is. If you’re collector isn’t getting that contact, then she’s not managing her inventory properly. Likewise, if she’s not leaving a high enough percentage of messages, then she isn’t giving you 100%. And you’re not going to let that happen.

Your call analyzer program can tell you how many calls your collector made or took and how much time she spent on the telephone. Does the number of calls match closely enough with the number of work efforts, or “action codes”, recorded by the database? If not, you may have a “pencil-whipper” on your hands—a collector who documents efforts that never occurred. You can’t collect money that way. In any case, you should have an idea of what percentage of a collector’s time should be spent on calls, and how many calls she should make or take in a given week. Include those figures on your scorecard and give them the proper weight.

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.