25 Minutes | Collections

ACA Webinar Summary: Conversation Drip – Where Collectors are Leaving Money on The Table

 

Chris Kontes

COO, Balto

On Balto’s recent webinar, titled, Conversation Drip – Where Collectors are Leaving Money on The Table, Balto asked over 100 agency owners to pick the areas where their collectors are leaving money on the table. Participants were asked to choose from the following challenges:

  •      Collectors settling too quickly
  •      Collectors failing to ask for payment
  •      Collectors failing to use probing questions to understand consumer situations
  •      Collectors forgetting to discuss sources of funds
  •      Collectors failing to set up pay plans with consumers
Where Do collectors leave the most money on the table? Conversation Drip

The results are pretty interesting. “Not probing to understand consumer situations” was the most frequently cited challenge at 18% and “settling too quickly” and “forgetting to discuss sources of funds” tied for second at 12%, respectively.

Each of these options, or drip points, represent points in the conversation where collectors leave money on the table. So how do you address it?

Let’s imagine the best collector in the world. She is quick on her feet, able to empathize with callers, and has the best numbers of everyone in her organization. Even for her, though, there are calls that she won’t collect on. On some calls, consumers simply hang up before she can get to the talk-off or go through consumer identification. Maybe the consumer’s financial situation is so dire that even the most brilliant negotiator couldn’t change the outcome. Either way, the simple reality is that some calls are just unwinnable.

When we look at our internal data, liquidation rates generally fall between 25% and 55% depending on the organization.

Now, you might think 55% is impressive, and it is. But even here, 45% of potential collectible revenue is lost. If you are capturing 25% of funds, the number of uncaptured funds skyrockets to 75%. It’s the uncaptured funds that often don’t get talked about – but is the most impactful to your organization.

In the first case, out of the 45% of uncaptured revenue, how much would a collector have won if they did everything right?

Conservatively, let’s say only half of the calls of are winnable. Of the 45% of revenue not collected, 22.5% is collectible if everything goes perfectly. That’s 22.5 points you can get back!

So collectors are leaving a lot of revenue on the table. We know that. Now what?

Well, in most cases, the winnable but uncollected revenue is more significant than revenue actually collected, meaning there is usually room to double revenue simply by focusing on winnable calls. Discovering and targeting these areas underpin the concept behind Conversation Drip.

Calculating Conversation Drip

Take a minute to consider out the following chart:

Skill Percent of Right Party Contacts Where Necessary Percent of Time Done Wrong Percent of Impacted Calls

In the left-most column, select three of the points mentioned above. As a reminder, they are:

  •      Collectors settling too quickly
  •      Collectors failing to ask for payment
  •      Collectors failing to use probing questions to understand consumer situations
  •      Collectors forgetting to discuss sources of funds
  •      Collectors failing to set up pay plans with consumers

In the next column, titled “Percent of Right Party Contacts Where Necessary,” fill in the estimated percentage of calls where the point comes up. For example, collectors may need to ask for payment in 100% of calls, but the chances to discuss sources of funds may only occur on 20% of calls.

Next, in the column titled, “Percent of Time Done Wrong,” estimate the percent of time collector’s don’t do the particular skill properly. Based on the results from the survey, the chart might look something like this:

Skill Percent of Right Party Contacts Where Necessary Percent of Time Done Wrong Percent of Impacted Calls
Not using probing questions to understand consumer situations 80% 20%
Settling Too Quickly 60% 30%
Not Discussing Source of Funds 50% 50%

Finally, multiplying rows 2 and 3 yields the Conversation Drip of that particular skill, like this:

Skill Percent of Right Party Contacts Where Necessary Percent of Time Done Wrong Percent of Impacted Calls – Conversation Drip
Not using probing questions to understand consumer situations 80% 20% 16%
Settling Too Quickly 60% 30% 18%
Not Discussing Source of Funds 50% 50% 25%

The final column illustrates where you should focus their coaching. In this case, instead of coaching collectors in groups (Like A players, B players, for example.), you should coach by skill. If your top player is doing a great job but is rolling over in “settling too quickly,” then your top player is losing just as much revenue as your bottom players doing the same thing.

Coaching on the most impactful skills yields better results than coaching people by skill level.

Second, you may notice that seemingly essential skills aren’t as impactful as they initially appeared because they don’t occur on a high frequency of calls. Conversely, some of the things that seem most basic, like asking intelligent probing questions or understanding consumers’ needs have an outsized effect because they come up most frequently.

A Real Life Example:

Balto tracks all kinds of variables, but one recently stood out – interrupting. Here is how the data for 48 real collectors:

Call Coaching Opportunities Aren't Spread Evenly Across collectons teams
  •  12 collectors had coaching opportunities for interrupting
  •   36 collectors didn’t
  •   4 collectors produced 54% of the interruptions!

In this case, only about 33% of collectors struggle with interruptions. In particular, 4 collectors were responsible for over 50% of all interruptions. If you focus training on those 4 collectors, it will yield substantially better results than if you trained all 48 people on interruptions and would require a lot less effort. Coaching opportunities just aren’t spread evenly across all individuals.

Your Action Item:

Use the scorecard above, identify your most substantial points of Conversation Drip and coach whoever is struggling in those areas. That way, every minute you spend coaching is directly tied to revenue.

Plugging Conversation Drip

In our 8,000+ hours of coaching, here is what we’ve found to be the most helpful in plugging Conversation Drip:

1)    Identify Drip by using the Scorecard above

2)    Coach Conversation Drip Points in Order of Magnitude by focusing on the drip points that occur on the largest number of calls, even if your collectors are generally good at them.

3)    Reinforce Coaching frequently to ensure habits actually stick

4)    Monitor for Recurrence by checking periodically to see if the drip point has been affected.

The Forgetting Curve:

We’ve talked about the first 2 points in detail, but point 3, Reinforcing Coaching, is just as important. Talk a look at this chart:

Ebbinghaus' Forgetting Curve - How much of something do we we forget each day?

This chart is called Ebbinghaus’ Forgetting Curve and it outlines the rapid pace in which humans forget information. Though the complexity of the information plays a role, the general results look something like this:

  •       Roughly 25% of information is lost in a few hours
  •       Roughly 66% of information is lost in one day
  •       Roughly 75% of information is lost after six days

It’s the same principle for your collectors which is why reinforcing their learning is so important. Otherwise, they will get right back on the phones and go back to their old habits. It’s not because they are bad people, its because they are human. Call Coaching is a battle against time.

Finally, Monitor for Recurrence:

When it comes to the skills you’ve identified in your Conversation Drip scorecard, make sure you coach them in a cadence. It might seem like beating a dead horse, but it’s absolutely necessary for optimizing call results.

Once collectors start using coaching naturally, you can reduce their training around that particular skill. Remember, though, that collectors are forming habits no matter what, and one of the toughest situations is trying to help a seasoned collector break bad habits. Aside from the fact they often don’t want to, you are simply trying to change something deeply ingrained in their operations.

That’s why catching recurrences early is so important. It’s often the only time that you can reasonably fix the problem.

Three Call Openers for Your Collections Team

The call’s introduction is crucial because it lays the groundwork for the entire conversation. In many calls, the first moments of the call dictate the direction of the middle and the end of the call, too.

With all of this in mind, there are three call-flow strategies we see most frequently. They occur immediately after the collector has confirmed identity and read the Mini-Miranda.  They are:

1)    Open-Ended Intro

Ex. “Now that we’ve taken care of all that information, how can we help you resolve this situation?”

Ex. “Now that we have everything squared away, what caused you to fall behind on your payment?”

Open-ended introductions get the consumer talking which provides the collector with helpful information. This strategy has a lot of pros; namely, it shows that you are helping and empathetic. Consumers appreciate when collectors don’t go right for the money. It gives them a chance to share their story and share the details they feel are most relevant. Conversely, it provides an opportunity for the cal to go off the tracks, calls tend to run a little longer, and collectors sometimes feel like they are losing control of the conversation.

For this call strategy to work correctly, collectors need to listen, pivot quickly, and demonstrate outsized empathy. On average, though, this strategy seems the work best.

2)    Closed-Ended Intro

  1.     “Now that we’ve taken care of that information, can you pay the balance in full today?”
  2.     “Now that we’ve taken care of that, are you currently employed?”

Closed-ended introduction questions are direct and get everyone on the same page. They are focused and controlled and let the collector set the conversation’s direction. Of course, it means that collectors hear a lot of “no” from consumers. Collectors need to assume the “no” is coming and be ready to pivot. Calls structured like this tend to be shorter, yield a higher number of calls in which a collection takes place, but have lower average amounts collected per call. Examples include,

  1. a)   “I understand you can’t pay the balance in full. What portion can you cover?”
  2. b)   “I understand that you aren’t currently employed. When do you expect to be back at work?”
  3. c)   “I completely understand, what sources of funds do you have available?”
  4. d)   “Thanks for letting me know, would a discounted payment plan work for you?”

Conversely, the drawbacks of closed-ended openers are that they limit the collector’s initial ability to obtain helpful information. They can also come off as abrasive and set the call off on the wrong foot.

3)    Info Gathering Intro

The info gathering approach is a slow buildup to one of the other two openers and focuses on fact-finding. Examples include,

  1.  “Let me make sure your information is updated – is this still correct?”
  2.  “Are you currently employed?”
  3.  “Do you currently have a 401k?”

The massive benefit to the info gathering approach is that it gives the consumer time to settle, get used to the collector, and get used to the conversation. It doesn’t sound like the collector is just going for payment, which often makes consumers antsy – particularly on outbound calls.

The drawbacks of the info gathering introduction are similar to the disadvantages of the closed-ended approach. The collector is simply going through a set of questions that may or may not get to the actual heart of what the consumer cares about.

If you are going to pursue and info gathering approach, it’s a good idea to end your talk track with an open-ended question. That way, consumers can address the elephant in the room if it hasn’t yet been discussed.

So which should you pick? It depends – you need to evaluate each one for your organization. Indeed, what matters most is that you have a strategy, not which one you pick. Every collector should have a talk track that aligns with one of these three strategies.

Three Quality Assurance (QA) Strategies for Your Team

So how do you listen for the essential elements in your calls? Here are the three we see most frequently, along with their pros and cons.

1)    Random Sampling & Call Scoring

Random Sampling and Call Scoring is the most common strategy in the collections industry. In this case, managers have a list of randomized phone calls from each collector that they regularly listen too. Often, it’s between 4-10 calls per collector per month unless a collection agency has a particularly robust QA team.

In these instances, it’s best to keep an open mind. Don’t listen for anything specific, unless you are following up on a particular complaint or comment from a customer. Try to be honest about the strengths and weaknesses of each phone call and the collectors making them.

From this grouping of calls, managers can get a pretty good idea of collector performance and should start to recognize patterns for possible coaching.

The pros of this approach are that – with enough call volume – managers can get an aggregated picture of how the collector is performing, in both good and bad scenarios. Keeping it randomized is critical – if a manager only focuses on good calls or bad calls, it doesn’t illustrate the full picture.

2)    Selective Call Sampling

Selective Call Sampling is another fairly common method to evaluate phone calls, particularly when managers don’t want to listen to randomized conversations. There are often legitimate reasons for this, the most common being a high volume of calls with brief connects or no actual conversations. Similarly, managers often don’t see value in listening to calls that aren’t with the right party contact.

As a result, managers can start to filter calls. One real filter we noticed recently was the “just came back from lunch” filter. In this case, the manager felt that the time immediately after lunch is when collectors sound the most sluggish and most likely to struggle on their calls. Similarly, we sometimes see filters for reps who seem to be having an off day or haven’t been performing up to standard recently.

As a benefit, selective call sampling yields more relevant calls in less time. The drawback is that it’s easy to reinforce manager bias or listen only for particular mistakes which don’t give the full picture, either.

Remember, it’s challenging to manage effective call scoring if calls a pre-selected by a manager. In this case, managers may unfairly evaluate collectors based on isolated incidents. Calls must be randomization call scoring to produce legitimate results.

3)    Go to the Right Problems

Finally, managers sometimes elect to listen to calls that only have a particular problem. For example, it’s relatively common for managers to only review calls in which a consumer (or lawyer) complains. By only listening to calls where compliance issues may have taken place, managers can optimize their time around the most substantial risks their team faces.

 

How Are Collections Agencies Spending Their QA time?

This chart reflects a real example of a particular collector working with Balto. During 9 calls representing 52 minutes of talk time, there were 12 different red flags. Specifically, the collector is flagged for using the phrase, “Let me talk!”, which indicates combative language.

In this chart, the squares represent potential compliance violations can take place on each call. These including things like rudeness, threatening language, or simply talking too fast. If you use either a random or even selective approach, you encounter a lot of dead time, since most calls don’t have any issues. Dead time and irrelevant calls are a primary reason why speech analytics solutions like Balto can be helpful – you don’t have to throw darts at a board and hope you hit something vital.

Conversation Drip Summary

  • Conversation Drip presents massive revenue opportunities. In most cases, it represents a more than 100% increase in revenue attainment.
  • The skill that comes to mind isn’t always the one that drives revenue. In many cases, the skill that comes up most frequently on calls has a more substantial impact than the talent in which collectors are weakest. In practice, effectively asking for payment and empathizing with the consumer are the two most impactful coaching areas.
  • Coach opportunities, not people. When you focus on individual groups of performers (A players, B players, etc.), you are bounded by that group’s potential output. Conversely, by identifying the skills that drive results across your team, you’ll have more impactful results
  • Coaching is a battle against time. Reinforcing the things you’ve already coached on is difficult and time-consuming, but it’s necessary since the unfortunate reality is that immediate reinforcement is the only way to ensure coaching actually sticks  (tools like Balto help).
  • Call Flows, coaching and QA require a cohesive strategy. The particular approach you use can be specific to your business so long as you have a coherent plan in mind. Too often, call coaching is an afterthought. Managers need to identify the things they are coaching on and with what frequency before doing anything else, not after.

Call Us Now: 855-GO-BALTO

sales@baltosoftware.com

Proudly Made in St. Louis

© 2019 - Balto Software Inc.