Part 3 of a 3-Part Series on Consultative & Relationship-Based Collections
Cash fuels business operations and growth. In any organization, the collections process is the last resort to make good on the invoice before it declares the associated revenue as uncollectable. Hence, it is important to ensure that this process is robust and responsive when something fails in the upstream process.
In this, our final installment of the series, we will focus on the power of domain knowledge and technology in helping to create an evolutionary collections process that effectively remedies the root causes for late payments and returns long-term value to the organization. In our view, the key to success—the right approach—is to keep the customer first, while focusing on the orchestration of knowledge and technology to understand the “as-is” state and correctly define the “to-be” state that promises the desired outcome.
The Power of Data
Data is the catalyst and strategic asset that makes decision-making easy and reliable. EXL’s ability to merge statistical data mining with a consultative approach, artificial intelligence, machine learning, and modeling tools has helped us design future-state operating models that improve collections, while also improving the customer experience. The following defines our view of a modernized, effective collection process built on reliable data and operational experience:
CUSTOMER RISK SCORE:
Risk scores, as received from credit agencies, do provide a reliable base for customer credit standings, however it is not reflective of a customer’s payment behavior, which impacts the cost and effort of collections.
In the B2B space, segmenting customers based on volume, risk and payment behavior is of pivotal importance. Some accounts are selfliquidating, while others require collectors to babysit the account. Delayed payments are not always driven by behavior, hence reviewing customer/payment level data plays a critical role in the journey of customer segmentation
Customer behavior is dynamic. Therefore, it is important to flexibly align strategy to customer segments for best results. Well-defined strategy brings clarity, drives efficiency and promises better outcomes.
Know the right time to contact. It is believed that payment schedules are customer-driven, however data suggest payment patterns differ for customers by industry. Our models don’t just stop at the customer level, but aggregate and compare trends at industry and geography levels to ascertain impact by social and economic issues.
Overlay Technology to Drive Efficiency
Navigating within an uncertain economy requires businesses to work towards digitized and resilient operations. EXL PayMentor™, a digital debt collections solution, enables clients to maximize collections and recovery efficiency throughout the delinquency life cycle.
It requires only light integration with your existing environment to ensure a swift launch to market.
The way to compress collection cycles, reduce the cost to collect and improve collection rates is by improving your analysis of the collection process. This can be achieved with EXL PayMentor as your digital debt collections solution. With it, you can begin to identify patterns for late payments by customer segments, determine the best time to initiate collection calls and adjust business plans to accommodate delayed payments for more efficient operations overall.
To learn more about EXL’s PayMentor solution, please visit www.EXLservice.com.