What has the power to improve collector performance, employee turnover rates, client retention, overall collection performance AND your effectiveness? It’s not a riddle – it’s data and scoring.
Most agencies are using data and scoring today, but it’s not always clear if it’s doing its job. So, we are left wondering if that data investment is giving us positive ROI or if our scores are performing as expected. That’s why we recommend evaluating your data and score performance on a regular basis and constantly adjusting workflows for optimized return.
There are three main areas where data and scores can have the most significant bottom-line impact: Data Enrichment (aka skip tracing), Propensity to Pay Score, and Portfolio Optimization Scoring. Here is a quick dive into the scores, data, and workflow optimizations that can change your performance almost instantly:
Hopefully, you’ve discovered ways to enrich your account data that improves outcomes for right party contacts and compliance. On the most basic level we look for phones and addresses, but what might we be missing if we only look that deep?
The answer: a lot. Data enrichment should include scrubs for bankruptcy, litigious consumers and deceased records. Identification and shelving of these risky accounts can save you not only from legal trouble, but also save you dollars from unnecessarily working accounts that won’t pay. In addition, your data should come with a confidence score, so you can understand how well matched it is to the original record. Data insights should always be returned – everything from knowing if a phone number is mobile to whether an address is military.
But more than any piece of data will change your outcome, workflow automation will. When you are introducing data into your systems and processes – taking the time to make sure the data can automatically adjust workflows, prioritize accounts and make intelligence decisions will truly change the way you look at the value of the data itself.
In addition, if you are not monitoring your accounts, you should be considering it. Not only is it great for compliance and customer service/differentiation, it can have a positive ROI when you use it to make important work effort decisions.
Propensity to Pay Score
In a recent blog post we gave an example of a collector working two accounts: Frank and Melanie. Frank and Melanie both visited a hospital or medical facility for a broken leg. Frank is 29 years-old, he’s single, he’s unemployed. Melanie is 38 years-old, she’s married and she’s a full-time accountant. But that’s only part of the story, and not the part you should be paying attention to.
When you bring in the data attributes for modeling a score, we see that Frank owns a home. He has two cars. He’s a lottery winner and he’s been current and dependable in all of his obligations, versus Melanie who has no assets and she’s frequently delinquent in her payment schedules that she has had with creditors.
A propensity to pay score is the numeric probability that an account will be paid. A good score will incorporate not just market data and public record attributes but also historical data within your collection software.
In our example with Frank and Melanie, Frank attributes would mean he has a higher score than Melanie and your strategies can react accordingly.
Portfolio Optimization Score
Many agencies stop with a propensity score and believe that’s the best way to determine workflow. However, we find that the propensity score is not necessarily the best score to rely on in terms of optimizing performance.
In the example above, we might see Frank on the higher end of the propensity score. But let’s say that Frank only owes a $30 copay that was left over after his visit. How much effort ($$) can we afford to put toward that account? He’s likely to pay but it’s a low balance – with a low return for your business.
That’s where a portfolio optimization scoring model can really change results. By prioritizing accounts based on an optimization score that accounts for propensity AND opportunity, you can use the combined intelligence to build an effective workflow strategy.
The key to realizing the return on your data and scoring investment is in the application of the intelligence.
Your data and scores should:
- Drive workflow automatically
- Make intelligent decisions based on business rules
- Be easily tracked for performance and ROI
If its time to revisit your data and scoring strategy – check out our buyer’s guide. It’s a helpful tool to evaluate any data provider.