Most collection agencies, at their cores, do the same thing. That shouldn’t come as a huge shock to anyone in the ARM industry. Collection agencies attempt to locate and contact individuals with unpaid financial obligations, then work to persuade those individuals to pay for those obligations until such time as the entity that owns the debt is satisfied. Most commonly, the collection agency is paid a percentage of whatever it collects for those services.
So, if all collection agencies basically perform the same service, what determines which collection agency a hospital or utility or credit card company will hire?
This, as you will read, is where the proverbial rubber meets the road. You know, where the masters are separated from the apprentices, the wheat from the chaff, the fish from the fry, and the cream from the curd. I could go on, these metaphors are endless.
Look, Judge Judy thinks I'm a dork. (via GIPHY)
For the past several years, compliance has been at the forefront of most decisions to engage or eliminate a collection agency. Ensuring that the collection activities will comply with all local, state, and federal rules and regulations, to say nothing of making sure not to run afoul of plaintiff’s attorneys or professional plaintiffs who make their livings suing agencies. While compliance is still incredibly important, one overlooked area that is becoming more and more of a priority to clients is technology.
Clients are looking for collection agencies to be able to meet certain technological requirements, such as providing client portals that allow them to review performance results or add/remove accounts. The forward-thinking collection agencies are now turning to technology and using it as a competitive differentiator when looking to win new clients or just keep the clients they already have. The ARM industry has been loathe to invest in new technology, fearful of painting regulatory or legal targets on their backs while also worried about whether the return on investment is high enough to justify the expense. If it ain’t broke, many don’t want fix it - which is a completely understandable perspective. Conservative approaches to this business are what have kept many agencies around for generations.
But those agencies are now starting to lose market share to other agencies making those investments in technology. The market for winning new business is incredibly competitive and collection agencies need to stand out and stand apart from their competitors. While this is still very much a relationship sale, there are growing instances where all the flashy presentations in the world can not compete with an agency that has the systems in place to meet the demands of a 21st-century client.
Technology is not something that collection agencies can avoid or postpone any longer. The agencies that will survive and thrive will be the ones that understand the importance of technology and make it part of their operational DNA.