Data and scores are nothing new in the ARM industry — we’re all doing it on some level, spending time and resource, and many are left wondering if it’s really working.
Sitting in on one of many recent ARM industry webinars about the role of data and scoring in the ARM industry, I was really disheartened to hear some of the conversation around leveraging your data. The presenters implied that to be truly data-driven you need resources like data analysts and a data warehouse. They detailed the steps to investing in infrastructure to be best in class. How overwhelming this must sound to most agencies? How many people really have the resources available to build out massive data teams and infrastructure?
We already know the answer, not many – and even agencies who are “big” enough to build out the infrastructure are finding ways to work smarter and scale down without the “big” investment.
With all that in mind, let’s back up a bit and start with a quick (and common) scenario we face in this industry when thinking about WHY and HOW data matters.
Frank and Melanie
Your collector is working two accounts on their screen: 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.
Let’s think about how this might look to a collector who’s sitting behind that screen. They’re going to see Frank and they’re going to see Melanie on their screen and they are going to call up Melanie (accountants are good with money, right?).
Let’s wave the magic wand and bring in data now. What data tells us is 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.
If we are giving collectors limited amounts of information we are hurting their ability to be successful. So, we can all agree there is benefit in supplementation of data and information.
Data Enrichment as a Strategy
Even though it’s easy to see that data makes us work smarter – it is much harder to use in a practical setting. Why is that? Well you typically require a few things of your data:
- Integration in your collection system
- Presented in a clear, consistent way
- Intelligent enough to predict payment
That’s when things start to fall apart. Your data scrub provider can send you a file – but what they don’t tell you how to use it (because they specialize in data and not workflow). Sometimes it’s integrated with your system, but those integrations have frustrating limitations.
Then, you’ve got to worry about the entire science behind the data attributes. What story is this really telling? Even with a score, all you know is how to rank accounts – not how to work them to maximize return. And how do you integrate this into your collector’s workflow?
One of our customers, Curt Jennings, Director of Operations for Health Services Asset Management, LLC, said this about his experience working with data:
“We were dialing the same accounts, given the same work effort, same letters, same notices, across our entire inventory, so when Intelitech did their data analysis and scrubbed our data and showed me that the bottom third of our business only represented 3% of our overall recoveries, it told me that we weren’t maximizing our opportunities, nor were we really leveraging our staff to maximize the dollars based on the inventory that we had. We were throwing darts at the dartboard but weren’t trying to hit the bullseye. We were just repeating our efforts but really weren’t maximizing the results.”
How many of us get stuck in a similar rut?
So, back to the beginning. An industry educational webinar where the discussion is that people are expected to make a massive leap into an entirely data driven collection strategy might actually be scaring people away from wanting to embrace data. The good news that needs more industry attention is that data, scoring and workflow optimization fits well into a great partner strategy. In other words, outsource the work at a fraction of the investment and save your money for other growth levers. There are vendors eager to help from data hosting, to data scrubbing, to workflow consulting.
In Part II of this blog series, we’ll dive more into scoring models and how you can predict payments and return on work effort (subscribe to the blog if you want it in your inbox).
In the meantime, check out a special program we are running: We are gathering helpful bench-marking data in the industry, and in exchange for 5 minutes of your time, we’ll provide you a detailed analysis of your data health, delivered to you by an experienced ARM industry consultant. Take the survey.
Our primary mission here at Intelitech is to apply analytics to help our clients attain clarity and overcome constraints. We work with hundreds of agencies across the nation to optimize effort, improve customer reach, avoid risk, and evaluate performance. What we have found in common with the clients that we work with in this area is that everyone has their own secret sauce and how to work the debt assigned to them. While this art of collecting is certainly important, our experience in working with our clients has shown that art alone is not enough to make you competitive in our industry today. There’s no question you need good data and experience to make good decisions, but it’s really about having the right data. And once you have all the facts, it’s much easier to make informed decisions.