The ABC’s of Collection Agency Management

Don’t ever let anyone tell you that agency management, or communicating with your agencies, is as simple as “ABC.”  Managing your agencies for maximum return takes knowledge, dedication, perseverance, patience and consistent effort.

Agencies are not always managed to their full potential. 

Myths like:  “They work on commission, so they have every incentive to collect the debt,” or, “They are the experts; I can’t tell them what to do,” or, “As long as they get the recoveries I need, I’m sure they are doing everything right,” still abound. 

The only way to truly manage your agencies to their full potential and know what is occurring on your portfolios is to communicate, communicate, communicate with your agencies.  Here is an alphabet soup of agency communication ideas.

ACT instead of ARGUE – ACT as soon as possible upon their account queries/questions, and any account commission eligibility questions.  Don’t ARGUE over the “small things.”

BUILD instead of BOMBARD – BUILD a friendly, yet professional, two-way rapport with the agencies, which will improve the recoveries.  Don’t BOMBARD the agencies with work requirements that are not cost effective under your commission fee price.

CRITIQUE instead of CRITICIZE – CRITIQUE each of your agency’s performance by conducting (or having a vendor conduct) objective audits or reviews which point out the positive as well as the negative agency findings.  Don’t audit your agencies just to CRITICIZE or “find fault” with their actions.  Work together with emphasis on strengths and corrective plans.

DIG instead of DEMAND – DIG into problems for solutions that would present a “win-win” resolution for both you and your agencies.  Don’t DEMAND solutions until you have conducted the research to understand the problems and know how/if they impact you and/or the agencies.

ENCOURAGE instead of EMULATE – ENCOURAGE your agencies to properly respond that they need time to add additional collection staff when you ask if they can handle additional account volumes.  Don’t EMULATE a poorly informed creditor that thinks an agency can immediately accept additional account volumes without the agency’s recovery being affected.

FIGHT instead of FAINT – FIGHT to protect your company’s recoveries against your company’s misinformed or “old school” managers that believe all agencies know how to collect and will collect your uncollectibles without audits or reviews, or they have the attitude of slashing rates instead of evaluating net-back.  Don’t FAINT and give up your potential recoveries by not auditing or reviewing your agencies.

GIVE instead of GRUMBLE – GIVE your support to your collection agency management staff.  Don’t GRUMBLE over the time and expense they incur in auditing, reviewing and managing your agency process.

HELP instead of HINDER – HELP your upper management to understand the full ramifications of your agency process.  Don’t allow upper management to HINDER company recoveries by not understanding outsourcing.

INVITE instead of IGNORE – INVITE your agencies to join you on monthly or quarterly conference calls to discuss recoveries, policy or procedure changes, etc.  Don’t IGNORE any opportunities to communicate your needs or requirements with your agencies.

JOIN instead of JEER – JOIN with other progressive credit grantors in building a world-class collection arena with your agencies.  Don’t JEER at progressive credit grantors without really examining the changing directions in the collection world, i.e., a partnership attitude rather than an “I told you so” attitude.

KICK instead of KEEL – KICK off the year by conducting OCA Workshops with mandatory agency attendance.  Don’t KEEL over (because of the volume of work to accomplish a workshop) and put off scheduling an OCA Workshop.

LISTEN instead of LAMPOON – LISTEN to your agency’s “silent messages,” i.e., mergers, changes in management staff, changes in collectors, address changes, etc.  Don’t LAMPOON your company and your recoveries by ignoring agency changes.

MOLD instead of MOVE – MOLD your agencies into world-class collection agencies by objectively and with foresight changing their account volume placements; thereby, assisting them in becoming/staying top recovery agents for your company.  Don’t just MOVE account volume placements without forewarning or the agency’s recovery will automatically drop.

NURTURE instead of NEGLECT – NURTURE your agencies by knowing their good points and their weaknesses.  Don’t NEGLECT the needs of your agencies because to do so would NEGLECT your own recovery needs.

OFFER instead of OBJECT – OFFER a handshake to your agencies in order to jointly work on improved recoveries.  Don’t OBJECT to changes, requests or suggestions without total examination and resolution.

PLAN instead of PITY – PLAN ahead and stay ahead of your upper management and your agencies so that your agency management process stays first class.  Don’t PITY yourself and think that budget constraints, personnel constraints and system constraints will always stop you in your tracks.

QUALIFY instead of QUIT – QUALIFY your company, yourself and your agency management staff (if applicable) in developing, implementing and maintaining a “World Class Collection Agency Environment.”  Don’t QUIT seeking improvements in your collection agency process because of “so called” restrictions out of your control, i.e., budget, systems, personnel, etc.

RESCUE instead of REMOVE – RESCUE those agencies that have minor but correctable problems or discrepancies in collecting your accounts because a termination is expensive to your company (price-wise and recovery-wise).  Don’t REMOVE (or terminate) those agencies that are worth “rescuing,” but do REMOVE (or terminate) those agencies that have proven themselves unworthy of conducting your business.

SHOUT instead of SHRINK – SHOUT out your agency results monthly so that each agency stays aware of your comparative results and expectations.  Don’t SHRINK from demanding that your realistic expectations must be accomplished.

TRY instead of THREATEN – TRY to manage your commission fees comparative to agency performance, i.e., raising the fees or using bonuses for the top performer(s), and lowering the fees for the poorest performer(s) as a warning.  Don’t take the easy way out and THREATEN to lower all of your agency fees en masse.

USE instead of UNDERMINE – USE your negotiation and facilitation skills to obtain agency “buy-in” or “ownership” in your work standards and portfolio requirements.  Don’t UNDERMINE the working professional relationship by “surprise” system or procedural changes.

VALUE instead of VETO – VALUE your agencies as profitable extensions, which positively impact your company recoveries.  Don’t VETO agency suggestions or recommendations without fully examining all of the possibilities.

WELCOME instead of WITHDRAW – WELCOME valid, informative and professional communications from your agencies.  Don’t WITHDRAW from your agency’s communication attempts, unless they appear to be more “social” attempts rather than “professional” communication attempts.

X-RAY instead of XYSTER – X-RAY the agency collectors for full FDCPA compliance with regard to harassment, profane language, threats, etc.  Don’t XYSTER (or SCRAPE) through an audit or review without listening/observing the collectors.

YOU instead of YIELD – YOU are the client and YOU should act like a “verb” —- action – action – action.  Don’t YIELD your values, principles and concern for your company.

ZIP instead of ZIGZAG – ZIP immediately into the “communication mode” with your agencies.  Don’t ZIGZAG, stay on a straight and profitable course for your company

In conclusion, managing your agencies for maximum return is a bit like mastering the ABCs – it takes a mix of knowledge, dedication, perseverance, patience, and consistent effort. Just like learning your ABCs opens up a world of possibilities in literacy, effectively managing your agencies unlocks the door to success in the financial realm. So, let’s embrace the journey, remembering that every step forward is like progressing through the alphabet – essential, rewarding, and ultimately leading to greater proficiency and achievement. Keep practicing those agency management ABCs, and soon enough, you’ll be collecting your way to success!