Collection Best Practices

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Collection Best Practices

• NCHELP Conference
• March 30, 2009
• 315 PM

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Todays Panel Presentation

• John Adonnino NCO - How to leverage technology
• Phillip Cervin TG - Back to the basics in
  Collecting
• Tom Cox FAMS - Incentives for collectors
• Bill Cantalope  ERS - Culture changes in call
  center

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How to Leverage Technology

• Times Have Changed
• Account Segmentation
• Scrubbing, Scoring Segmentation Value
• IVR (Interactive Voice Response)
• Productivity Measures

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Times Have Changed

• Agencies have always utilized automation
  technology.

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Times Have Changed

• More critical now, than ever, in todays
  challenging economic climate to utilize and
  leverage all types of automation and technology
  to meet these goals
• Perform Competitively
• Remain Compliant
• Operate Efficiently
• Increase Profitability

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Account Segmentation

• Segmentation Proprietary automated tool that
  leverages internal and external (credit bureau
  and public records) data to help predict account
  repayment probability with a high degree of
  accuracy.
• Objective - Accounts are sub-grouped based on
  expected recovery rate or unit yield.

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Account Segmentation

• Segment Treatment Operations management applies
  the optimal treatment for each value segment.
• Remain in compliance with clients work
  standards.

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Account Segmentation

• Examples of Sub-Groups in a Segmentation Model
• High Value
• Medium High Value
• Medium Low Value
• Low Value

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Scrubbing, Scoring Segmentation Value

• Integrated into new business load process
• Credit Bureau Scores Attributes
• Bankruptcy and Deceased Accounts

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Scrubbing, Scoring Segmentation Value

• Provides Detailed Skip Information
• Cell Phone Identification
• Preparing for global cell phone purge
• Currently, flagging and usage determined by client

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Interactive Voice Response

• Technology that allows a computer to detect voice
  and keypad inputs.
• Objective Increase borrower reach. Campaigns
  and message content are centrally controlled and
  consistent to ensure regulatory compliance.

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Interactive Voice Response

• Current Usage IVR technology used as both an
  auto-message platform, as well as a method to
  drive authenticated right party contacts to
  collectors, enabling our staff to be more
  efficient and productive.

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Productivity Measures

• Employee Metrics
• Objective Improve financial performance by
  tracking agent level productivity, improving
  accountability and identifying areas of
  opportunities for re-training. Initial focus on
  efficiency (occupancy) and effectiveness (dollars
  collected).

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Productivity Measures

• Key Performance Indicator (KPI) Reports
• Objective - The KPI report allows monthly
  performance tracking by client and segment.
• Operations Managers can make treatment
  adjustments by each segment as needed.
• Analysts can monitor the performance of
  segmentation models and adjust / redevelop as
  needed.

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ADDITIONAL PANEL REMARKS
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Back to Basics in Collecting

• Todays Market
• Different market
• Future market
• Impact on rehabs to GAs, Collection Agencies
  borrowers
• Revenue and cost impacts

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Strategies

• Absence of rehabs for some GAs
• Cash collections
• Is payment in full gone
• Loss of home equity loans
• Flexible payment plans due to current economic
  conditions
• Consolidations
• AWG

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Strategies Continued

• Continue rehab pipeline
• Pros available accounts when loans will be
  purchased
• Allows borrowers to continue demonstrating
  ability to pay
• Cons borrowers expectation in getting out of
  default

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Strategies Continued

• Impact to Collection Agencies
• Cash flow
• Cost implications
• Consolidation 45 rule FY10
• Use of other tools
• Virtual Office

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ADDITIONAL PANEL REMARKS
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Incentives for Collectors

• Paradigm Shift
• What is a paradigm?
• When do new paradigms appear?
• What kind of person is a paradigm shifter?
• Who are the early followers of the paradigm
  shifters and why do they follow them?
• How does a paradigm shift affect those who go
  through it?

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Incentives for Collectors

• Alignment of goals
• Understanding Client Goals and Objectives.
• Applying Nucors Incentive System
• Collector Incentive Plan.
• Collection Manager Incentive Plan.
• Non-Collector and Non-Collector Incentive Plan.
• Senior Manager Incentive Plan.

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Incentives for Collectors

• Non-Monetary Rewards
• Physical Environment
• Collector Recognition
• Company Newsletter
• Daily, Weekly, Monthly Contests
• The Gold-Room
• Anything to do with FOOD or FREE
• Use your imagination!

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Incentives for Collectors

• Creating An Environment Conducive to Success
  (Or, if at first you dont succeed, keep on
  sucking til you do succeed!)
• Importance of Human Capital
• Proper Span of Control
• An Even Playing Field
• Path-Goal Leadership Process
• Eliminate Toxic Policies Employees
• Secret of Management

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ADDITIONAL PANEL REMARKS
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Cultural Changes in the Call Center

• Today I will provide a brief summary of our ever
  changing call center environment, the cause and
  effect.

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Cultural Changes in the Call Center

• As a matter of Fact, it is changing right now.
  Some one, some where is developing a new
  technique or product that will make the call
  center environment more efficient.

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Cultural Changes in the Call Center

• Hiring Practices
• Security and Background Checks
• Contract Specific Training
• Scope of Business

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Cultural Changes in the Call Center

• Collection Techniques Collection Systems
• Calling Strategies ( Dialers, Texting, E-mails,)
• Scoring Models
• Skip Tracing Techniques Face Book My Space
  just a few examples.

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Cultural Changes in the Call CenterDoing More
with Less

• Competition and Set Pricing has forced agencies
  to develop techniques that provide better results
  using less time, manpower and expenses.
• We are able to handle more business with less
  employees due the technology changes in our
  industry, we are able to do this without
  jeopardizing results.

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ADDITIONAL PANEL REMARKS
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QUESTIONS ANSWERS
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EMAIL CONTACT INFORMATION

• JOHN ADONNINO john.adonnino_at_ncogroup.com
• PHILIP CERVIN
• phillip.cervin_at_tgslc.org
• TOM COX
• t.cox_at_fams.net
• BILL CANTALOPE
• bcantalope_at_ersinc.com
• CARL PERRY
• carl_at_progressivefinancial.com