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Let’s Test That: Integrating Strategy Testing into Your Collections Platform

Matt Butler
September 14, 2023
strategy testing

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“The best way to predict the future is to create it, and the best way to create it is through strategic testing and refinement.”

This quote from Peter Drucker, a management consultant called “the founder of modern management,” sounds good in theory. However, testing a strategy isn’t always practical, or possible, especially prior to implementation. For collections and recovery organizations, testing new collections strategies consists mostly of trial and error. They go live with a strategy, then study the results.

However, it is now possible for collections and recovery agencies to test these strategies prior to implementation through their current debt collection software platform. And that’s more important than ever in today’s frenetic collections landscape.

Industry influences

The world of collections and recovery faces numerous obstacles, leaving organizations struggling to maintain business operations.

It starts with debt. The amount of consumer debt continues to rise. Total consumer debt in the U.S. grew to a staggering $17 trillion in the first quarter of 2023. Delinquencies are beginning to trend upward as well, with credit card delinquencies exceeding pre-pandemic levels this summer.

The global workforce shortage hasn’t left this industry untouched, either. Collections and recovery organizations require workers to have specific skills and competencies, such as communication, negotiation, problem-solving, and customer service. However, these skills may be in short supply or high demand in the current labor market. In addition, collections and recovery organizations face competition from other sectors that offer higher wages, better benefits, or more flexibility for workers. For example, some workers may prefer to work in the e-commerce, delivery, or gig economy sectors. These industries have seen a surge in demand since the pandemic.

See what sticks

These factors, and a host more, make it more important than ever to increase efficiency and productivity. Organizations can ill afford to waste time, money, and effort these days, especially when it comes to collection strategies. These are the lifeblood of collections and recovery agencies. As you would expect, some of these strategies are not as effective as others or as productive as they could be as organizations are unable to test these strategies prior to implementation.

Most collection and recovery organizations work by trial and error. They implement new strategies, then closely monitor the results to determine if the new approach was effective. These approaches require much manual effort without producing the desired or needed results. They are also a highly inefficient, and ineffective, way of doing things.

Smarter strategies

Collections and recovery organizations can now test these strategies prior to implementation through the collection platform they are already using. This gives organizations the capability to rapidly adjust collection strategies on the fly (without the need for developers or code changes) in response to what the data is showing. With testing capabilities integrated into your collection platform, organizations remain nimble, agile, and more efficient.

Before going live with any new strategy, organizations are able to evaluate how different accounts fit within that strategy. This helps the strategy team understand the likelihood of the strategy achieving a desired outcome. This integrated platform can digest critical information already stored in your system, including any enrollments or changes in payment plans, then tie the strategy back to the data to analyze its potential performance. This gives teams the power to validate the tests, take the results and adjust the strategy as needed. In short, organizations can preview results before launching any bad strategies.

As these capabilities are integrated into your collection platform, organizations can tap into details on how customers communicate, how much they owe, their payment patterns, and more, to design personalized customer experiences. Organizations can develop workflows based on this deeper understanding of the customer. Then they can use the strategy engine to design those customer experiences.

Better results

Testing collection strategies is a time-honored best practice. However, in the ever-changing and chaotic collection landscape, collections and recovery agencies don’t always have the time or resources to properly test these new strategies.

Therefore, collections and recovery organizations must embrace solutions that enable agents to develop and test different strategies from a single platform. This will drive the best results and improve the overall efficiency of agents and the entire organization.

Using an integrated platform to test collection strategies optimizes the effectiveness of debt recovery efforts while ensuring compliance with relevant regulations.

Now Mr. Drucker’s quote more accurately reflects the realities of collections and recovery organizations.


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