Collections divisions at companies across industries are in the spotlight these days. And with the recent housing downturn and economic slowdown, collections needs are increasing at a staggering rate. According to Kaulkin Ginsberg, a Maryland-based market research firm, the U.S. now has more than 6,000 debt collection companies. According to the Federal Reserve, the consumer credit industry increased from $133.7 billion of consumer debt obligations in 1970 to $2.5 trillion of consumer debt obligations in November 2007, a compound annual growth rate of 8.2%. And the amount of outstanding revolving and non-revolving consumer credit increased at a compound annual growth rate of 6.4% from $1.3 trillion in June 1997, to $2.5 trillion in June 2007.
Most people see collections as a negative and thankless process. It is typical in the unsecured lending arena that 15-20% of customers’ first contact with their service provider will be in Collections. That being said, it is one of the key moments that you can turn customer loyalty to an all time high - you have to make sure you understand the value of the customer and in real time decide how to treat this customer as more than a Collections account. Companies are realizing that there are technologies out there that can help turn collections into a positive and profitable customer experience opportunity as debt collection is climbing. There is software that can minimize losses and support good customers through difficult financial times, producing a positive, ongoing and optimized customer revenue stream out of collections. Solutions that include real-time predictive and adaptive decisioning are available to help high-volume customer interaction organizations make the collections process as positive and profitable as possible.