Information quality in collections
To
run an effective collections operation there are a number of key components
that every business has to consider.
One aspect that runs throughout the customer lifecycle and is critical to effective collections is the quality of information held at a customer level.
What is Information quality?
Marketing departments are historically used invest to in systems and information that allow them to target customers with specific buying attributes, aligned to their commercial objectives and business plans. From this point forward the information obtained in relation to that customer assists in verifying and validating who the customer is and where they reside, making acquisition decisions, identifying risk factors, minimising fraud, confirming ongoing communication channel preferences and generally helping a business to manage the overall customer relationship.
Organisations are increasingly turning to their data and the information they hold - possibly their most important corporate asset, to help them:
• Increase customer satisfaction
• Improve performance and productivity
• Collect more revenues
• Maximise returns on investment
• Leverage significant efficiency gains
• Reduce risk
• Reduce losses
• Increase top line growth through better targeting
Application processing, scoring, decision tools and collection systems all use key information to determine and deploy effective collection strategies. If the quality of this information is poor then the effectiveness of the collection activities applied diminishes. This should be avoided from both a strategic and tactical collections perspective; it impacts operating expenditure and staff morale where levels of information are insufficient to complete a task.
Information quality is improved where a business invests time and effort in maintaining and augmenting its data, ensuring contact opportunities are used to enhance details wherever possible. The internal sources are further augmented through external bureau sources, sometimes facilitated through third party suppliers.
Information quality in collections
Organisations deploying leading collection practices in bureau information-rich territories will use bureau data and trends to aid identification of accounts with a high likelihood of becoming delinquent. The use of these ‘triggers’ allows businesses to apply pre-emptive or pre-delinquency actions that can support the customer in making appropriate arrangements to assist them through any difficult period.
Introducing strategies which use external sources to support internal data can also be highly effective in identifying potential self-cure cases which need little operational involvement or, conversely, those cases where the likelihood of payment is very low, and accelerated recovery action may be warranted. Handling both of these populations appropriately can generate operational savings and release expensive resource to situations where it would be more effective.
Up to date contact information enables contact via the preferred and lowest cost channel, allowing escalation to telephony and written communication when necessary via numerous accurate contact numbers and an accurate and complete address.
However, many organisations need assistance fostering information quality best practice. Many have no idea how 'good' their information is, or know how to use it to best effect within the consumer collections environment.
This paper outlines the area where information is critical in the collection lifecycle and why its quality is up most importance to effective and successful actions.
Terry Franklin
Business Consultant
Decision Analytics
Experian
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