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by Bill Andrews - November 23, 2009

BETTER, NOT BUSIER
MAKING THE MOST OF YOUR COLLECTIONS RESOURCES
By Bill Andrews

“I couldn’t fix your brakes, but I did make your horn louder.” When it comes to Collections call centers, the equivalent of that faux fix would be technology that keeps agents busier but not more productive.

These days there seems to be heightened emphasis on metrics like idle time and talk time and on “brute force” technologies like powerful dialers. Clearly these are not irrelevant matters, but they can also obscure the real key to success in collections.

More than one client has said anxiously, after a campaign that yielded more right party contacts, fewer wrong party contacts, more promises to pay, more promises kept, and more dollars collected, “But my idle time is up. My idle time is up.”

It is true that enforced idleness hinders collections agents and it is sometimes true that a shortage of lines is the culprit. Keeping enough lines available is costly. Three lines per agent is a common standard; recent industry research counsels that seven lines significantly increases agents’ talk time. But aligning the number of lines to peak demand can be uneconomical, with centers paying for the maximum number of lines all the time even though contact rates vary over the course of the day.

Instead, some centers find it useful to install the largest dialers available but then staff them with half the manufacturer-recommended number of agents, so that each agent has twice as many lines to use. Others opt for a hosted dialer to launch huge numbers of calls and then make lines available on an as-needed basis, so that the user pays for only the capacity required. These and other strategies are intended to minimize agent idle time.

Idle time is costly. Our research, captured in this whitepaper, How Much Is an Agent's Minute Worth?, shows that the lost opportunity cost of two minutes of agent downtime per day can easily run to $1.35 million per year.

But let’s take a broader look at the collections challenge. The recession has boosted call center collections volumes to record levels. Harassment suits against collectors are being filed at a record pace. People in debt have become harder to reach, and when reached, more likely to be unable to pay. So collections call centers are in an all-out battle to optimize everything: their agents, their technologies, their analytics, and of course the people being called. In every case the question is, “How can we get the most out of all of these resources?”

Dialers that ramp up the number of calls may reduce idle time, but they can have undesirable side effects. They increase wrong party contacts. They increase answering-machine contacts. They increase the potential for more harassment suits and related fines. Overcalled customers are less likely to pay and more likely to take future business elsewhere.

There are policy-related issues as well. Attempting to stave off legislation and lawsuits, many call centers are setting self-imposed limits on the number of times customers can be called. With high-volume dialers, the limits can be reached early in the day, leaving no accounts to call later in the day when customers are typically more reachable.

One alternative, of course, is to staff to the contact curve. Instead of setting up overlapping morning and evening shifts so that peak staff availability is in the middle of the day when calls are less likely to be answered, it is more productive to staff more heavily at the beginning and end of the day, during prime dialing hours.

Such staffing models are difficult to achieve with full-time staff, but many centers are finding that students and stay-at-home parents make good, eager part-time employees who are comfortable working during the non-traditional hours that are primetime calling hours. In a profession that typically sees a lot of burnout and turnover, it is not surprising that part-time employees whose work hours suit their larger priorities, typically have higher morale, higher productivity, and lower burnout than full-time employees.

Another alternative is to focus on Right Party Contacts (RPCs), making calls made more productive so that fewer calls are required. Recent research by ALI Solutions supports this option. RPC calls last 4-6 minutes, compared to less than a minute for Wrong Party Contacts and a few seconds for Non Contacts. RPCs are also a small percentage of the total calls made – 1-3 percent. Dialers launch many calls to generate the handful of RPCs an agent handles each hour, dialing faster and faster as contact rates drop.

With the call centers in our study averaging about 240 calls per agent hour, an increase of just one RPC per hour could eliminate the need for 24 other calls, saving line expense accordingly and increasing the likelihood of payments collected. This also provides for less negative impact on customers, while employee morale is boosted by the increased effectiveness of their talk time.

How to increase RPCs? Technology that keeps agents busier must be deployed in concert with analytics and tools that are proven to make calls more productive, not just more numerous. These include automated centralized campaign management, better predictive analytics for reaching customers at the right time, treatments carefully aligned to each customer’s predilections, and continual measurement of what works and what does not.

Bill Andrews, ALI Solutions, bandrews@alisolutions.com, (503) 614-0379