“The less you pay upfront the better service you will receive on the backend”

This is a quote by Doug Llewellyn from the People’s Court

How do you know that the service you are receiving will be worth the money? Doug Llewelyn from the People’s Court says, “The less you pay upfront the better service you will receive on the backend.” What does this really mean? I think the jest of this quote is that the more the person servicing you is willing to invest in the product or service the better it will be in the long run. So how does that relate to the debt collection industry?
First of all the industry was built on contingency based services and that is still what drives it. Agencies and law firms have been taking on all the cost to collect the monies owed to their clients in hopes of having profits left over after all the expenses. Debt buyers also work on this principle as they buy debt for a percentage of what they think they can collect from it. But just because a collection agency has the same contingency rates does not mean they will perform at the same liquidation rates.
It’s the investment made that determines the “backend”. The second and third placements of debt portfolios with collection agencies was created based on this theory, at some point in the 60’s a man by the name of Ruvin Schwartz in NY talked one of his clients into paying a higher rate on uncollected accounts so he could invest more efforts in skip tracing or locationing the debtors. He promised the bank that he could increase their ROI if they paid him a bigger contingency rate which would allow him to invest money to collect more money. ****Read more about Ruvin Schwartz here https://www.lighthouseconsultinginc.com/2013/02/an-interview-with-the-man-that-invented-credit-scoring-the-second-placement-and-automation-ruvin-schwartz/ 
Many vendors have spent countless hours and dollars developing their product or service. The software vendors spent millions in development of their product and continue to develop the products just to invite business in today’s ever changing environment. The vendors who have spent the most money to create and improve their products are often the best investors.
How do you show your clients that you’re the best investment? If a creditor, debt buyer or hospital wants to do business with you, how do you show them that you will be the right partner, the partner that will invest the most in the work to get the most out of it? The answer is you have to differentiate yourself from your competitors. You must do things that are slightly different and you must communicate those differences to your clients and prospective clients in a manner that leads them to believe that you have superior processes.
You must also show them that even though you are performing the same service, you are providing better service by doing things like deeper skip tracing, deeper portfolio penetration, voice analytics and more. You must make sure that they feel like they are getting more than their money’s worth. If you are looking for further guidance Lighthouse Consulting can help.


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