Collection Analytics: How to save money with counterintuitive data

One of my more interesting jobs was as a manager of a credit card collections analytics group. We were tasked to produce all sorts of cool analytics, from when to schedule collectors to how to segment the delinquent customers to how to manage the collections dialer. It was fun.

Being someone who hadn’t grown up in collections, I was able to ask all sorts of stupid questions — to challenge the “traditional” way of operating. And we found some cool “traditions” that should be re-evaluated. One of the more nuanced piece of analyses we performed was to determine the priority of contacting different segments of the population.

In general, the industry had a rule of thumb when it came to prioritizing contacts: Always attempt to contact those most likely to pay. The thought went that, given that we had a limited number of resources (collection agents), we should put them on the highest odds of success.

The graphs below illustrate the point. It represents the probabilities of getting a payment from two different segments of the delinquent population. In this representative example, Segment A has the highest probability of payment, and hence should be prioritized in the dialer, right?


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Well, according to our “tradition,” we would prioritize Segment A and leave Segment C as a lower priority in order to maximize the number of payments.

But here is the rub: When determining who to call, we want to judge the effectiveness of the interaction between the customer segment and the collections agent. In our made-up example, as I turn up the calling intensity, we measure the effectiveness of this interaction with the slope of this curve. As I call each of the segments more times or fewer, I can measure the effect—in payments—of the new resource allocation (more calls).

By looking at the problem this way we get a different answer. Segment C has a higher propensity of being influenced into making a payment. Because Segment A is more likely to pay without a call, it makes more sense (and makes the company more money) to call those customers who are likely to respond with payments to our contacts — not those most likely to pay.

Back in my old days, we were able to determine many of these types of segments in our customer file — the most interesting being a segment of customers who were hard to get on the phone. What we found is that these customers had never heard our collections pitch (because they were hard to get ahold of) and hence didn’t realize that our collectors were there to help. When we actually spoke to them, they reacted surprisingly well. Our data analyses showed them to respond very similarly to the Segment C group in our example.

Dan Mahon and I recently presented these sorts of ideas in a webinar “Collections Analytics: Stories about Data, Segmentation, Treatment and Scheduling,” which is now available on demand. Feel free to drop by and have a listen!

Want happy customers? Get intentional about your experience

With today’s technology, feeding customers’ multi-channel expectations isn’t about enabling many channels of communication; the struggle lies in managing the people, processes, and technology that deliver the experience to your customers.

If you boil it down to its simplest terms, the customer sees and experiences you as one entity. They do not think of your marketing team or your customer service department; they think Disney, Apple, Google, Comcast, and Verizon. Every interaction with every employee, product, or service combines to create that customer’s “experience.”

Whether you define the experience you will deliver or not, customers will have expectations. If you […]

Lessons from Lego: Confessions of an enterprise collaboration addict and toddler mom

As first-time parents, my husband and I try to be wise in our toy purchases. (Experienced parents: please stop laughing.) But it’s become clear that most toys aren’t designed with both parents and toddlers in mind; most seem to fall into one of several categories. As I began to define the different categories of toys in my head after cleaning up a particularly rowdy play session, I realized they looked surprisingly similar to the enterprise collaboration and communication marketplace (but more on that soon):

Best of Breed – This toy does one thing well, but that’s it. You can’t expand […]

Why Contact Centers Need a Workforce Management Team

Every contact center needs a Workforce Management (WFM) team. Seriously, you do! I spend a lot of time evangelizing why WFM planning is so important when creating a consistently performing operation. Because I have seen this play out many times in my job as a consultant, I’m highly confident that WFM practices can help any business improve. After all, isn’t it better to be prepared than surprised?

One of the best predictors of future behavior is past behavior. WFM software allows us to gather data from the past so we’re able to prepare for the future. Learning from the past […]

Top Three Tips for Improving Patient Engagement

The topic of “patient engagement” is very hot in the healthcare industry right now. The idea of transforming customer experience has taken almost every industry by storm, and the healthcare customer experience is no exception. What is it that sets certain providers’ customer service experiences apart from others?

In a recent webinar, we teamed up with CareCentrix, a leading provider of at-home health solutions, to help outline some key initiatives for healthcare providers. Here are three tips they shared:

Know the patient. Many providers try and implement patient service strategies based on what THEIR goals and initiatives are. When the […]

Unlocking the Mystery of First Contact Resolution

Contact Centers seem to be turning some of their focus away from the “old school” metrics of service level achievement – e.g. percent of calls answered in x seconds, average speed of answer and average talk time. Don’t get me wrong – I am not saying these goals are not on company’s radar. I am suggesting that resolution on the first try or “one and done,” might be becoming more important than standard SLAs.

Think about it. When I call my bank, doctor, etc., I don’t care as much about how long I have to wait, but I do care […]

Creating Loyalty through Seamless Customer Experiences

Looking at your service experience from the customer’s point of view lets you balance your contact channels, improving navigation from SMS to Web to speaking with a live agent via chat or phone. What happens when you don’t create a good omnichannel experience for customers? Let me share a recent experience I had to paint a clear picture.

I recently tried to make a purchase online, and while I found what I wanted, I wasn’t sure if it would really work for me. Their site offered web chat, so I initiated a chat session to get some additional information. The […]

Metrics Can Lead to Operational Dysfunction

When you spend a lot of time on the road talking to customers and prospects, you start collecting stories, and the stories I’ve gathered usually come from the mouths of contact center planners and workforce managers. And these stories are often about how things in call centers can get messed up.

Organizations and operations can become dysfunctional for a lot of reasons. I’m always fascinated when the dysfunction is brought about because of the metrics we use and how executives are compensated.

Here’s one story that I’ve heard several times.

A common business practice is to manage an operation to […]

Contact Center Economies of Scale

Call centers exist for one very important reason—it’s more economical for a large group of people to answer customer phone calls than smaller groups of individuals to answer those same calls. For example, retailers or hoteliers often send the calls from their stores to call centers because it is cheaper (and often provides better service). What’s the magic? It’s the economies of scale.

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Economies of scale are the savings that larger operations get as they spread their fixed costs (the call center infrastructure) over more and more output (calls answered). Larger centers have lower costs per call […]

C3 – IT’s Ticket to a Bigger Seat at the Table

Confessions of an IT Director – “Initial cloud anarchy caught us by surprise…”

Here’s the good news: IT professionals have evolved and are well positioned to lead as the next wave of cloud innovation addresses increasingly empowered customers and business users.

The next wave is called C3. Interactive Intelligence defines C3 as the next generation cloud platforms that offer comprehensive collaboration, communications and customer engagement services.

Dr. Don Brown, CEO and chief visionary of Interactive Intelligence, explains:

“Companies are going to try to reduce the number of vendor relationships they have. This is not a new trend, but we believe, […]