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Collection Agency Relations

Learn how to establish mutually beneficial relationships with collection agencies to optimize debt collection results and client satisfaction. Understand the key factors, communication strategies, and portfolio statistics during RFP evaluation to ensure a successful partnership. Explore performance models, implementation processes, competition analysis, and other important considerations to attract and maintain positive relationships with collection agencies.

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Collection Agency Relations

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  1. Collection Agency Relations Creating WIN/WIN Relationships with Clients and Collection Agencies Randy Kamm The CBE Group, Inc. rakamm@cbegroup.com

  2. The CBE Group, Inc.Defining the future of debt collection™ • Iowa-based collection firm currently employs nearly 1000 people celebrating 76th year of service • With more than 850 clients, CBE represents many of the nation’s most respected organizations in government, healthcare, utilities and telecom, financial services, and education • Corporate headquarters located in Waterloo, Iowa, with additional facilities in West Des Moines, IA; Overland Park, KS; and Atlanta, GA • Visit our website at www.cbegroup.com

  3. Creating a Win/Win Relationshipfrom a collection agency perspective • What factors do PCAs consider when forming a client relationship? • Solid, clear and positive two-way communication of expectations and requirements • Sufficient volume/revenue to assure long term continuous investment in client satisfaction • Ability to employ best practices and cost effective administrative procedures that lower PCA operating costs and expenses • Each PCA is different – No two are the same • seek agency that best fits your size, scale, performance objectives & collection philosophy

  4. Communicationis the key • Timely, clear and proactive communication • Two-way, positive communication based on win-win philosophy – not “we are the client, you do what we want or we'll find someone else” • Timely sharing of changes in assignment volume, procedures, reporting requirements, etc. • Regular and frequent communication channels • Permits PCA to make orderly adjustments in staffing, programming and other key resources

  5. Portfolio StatisticsDuring the RFP Q&A Stage • Qualifying the opportunity • Monthly placement volumes (# and $) • First, second, third placements, legal • New forward flow vs. backlog • Work standards and current collection efforts • Average balance and age of accounts • Current contingency fee schedule • Historical liquidation rates • What is the formula? Batch, cumulative, annual, etc. • Does the prospective client fit the agency’s financial model?

  6. Performance ModelIs it a good fit for the PCA? • Each PCA has its own ‘sweet spot’ where it excels • High volume/low balance • Low volume/high balance • High volume/high balance • Low volume/low balance • Consistent ‘forward flow’ of new business permits PCA to plan and continuously invest in performance on your behalf

  7. ImplementationHit it or miss it • Getting off to a good start • Client and PCA have same understanding of the implementation process, key deliverables and implementation timeline • Get all affected departments ‘on board’ up front • Key support departments: Information Technology, Accounting, Audit and Compliance, Legal Counsel • Frequent stumbling blocks • Electronic interfaces and coordination, security standards, remittance process and procedures, standard administrative rules and procedures

  8. Competition and Critical MassDoes the relationship make economic sense? • Does client employ well-defined and effective Performance Evaluation model? • What are goals, objectives and incentives • How many vendors are used and is the number of vendors appropriate for the volume of account assignments? • What is the right balance? • Is there sufficient volume of accounts for PCA to plan and invest in client’s business?

  9. Other factors of importancethat make you attractive to a PCAs • Target Rate Pricing vs. low bid situation • Takes pricing out of evaluation and permits you to focus on PCA’s ability to perform • It’s true: You do get what you pay for • Ability to add collection costs, ‘convenience’ or transaction fees • Streamlined, paperless and cost effective reporting and remittance processing • EFT/ACH vs. Wire Transfer • Electronic vs. paper invoice/reporting

  10. Thank You! Any Questions or Comments? Randy Kamm, Vice President The CBE Group, Inc. 513 478-2096 rakamm@cbegroup.com

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