It’s Good To Be Crazy, It Opens Up So Many More Options

I have been called many things in my career and crazy was included. I have always looked at problems differently even when I was a child. My first job at age 15 was in a donut shop and I told the owner on the second day of my employment that he should move the machines closer together to reduce the mess on the floor and reduce lost icing which is what was all over the floor that was my job to clean. Of course he looked at me with the eyes of an adult being told what to do by a snotty nosed kid that was working for $2.25 hourly. But two weeks later he moved the equipment just as I suggested.

It was quite crazy to tell your boss how to run his business but thats what I have been doing ever since. As a consultant to the debt collection industry my job is to tell successful business owners how they can be more successful. To tell them how they can improve their processes and strategies to reduce costs and increase collections. You have to be crazy to tell a collection agency owner how he has left money on the table, how he has failed in spite of his success. Its a fine line.

But the truth is doing debt collection the way we were all taught by the masters will no longer work. The business has changed so much that just making the calls will not result in the best results. You have to have a strategy and and great technology in place.

What I find in most engagements is that the agency has the view of the technology they need but they do not have the expertise to set up the strategies. For example most agencies have realised that a self cure strategy must exist so they spent lots of time looking at online payment sites and then picked one because of some features they saw in the demo. But when they set up the technology and begin to use it they do not get the results they are looking for. The problem is in most cases the way they set up the technology. The most common mistake I see starts with the login for the debtor. Recently when looking at a new clients pay site records I noticed that 45% of the people who came to the site abandoned because they could not log in. They agency was requiring that the debtor have the account number to login and many debtors did not have the letter in front of them. Also most of the debtors were on cell phones and the site was clunky on a cell phone interface. I had them change the login to their last name and last 4 of their SSN and the abandonment rate reduced to 8% from 45%.

So todays strategies are outside the box we were taught by the masters. They also include things that the old school collectors never imagined, emails, voice mail drops, messages on hold music, text messages, social media and so much more. Creating all these stratagies to get the debtor to login and pay online are new to the industry and do not fit the methods of normal debt collection. What should the email say and not say? Is it best to dunn the debtor with an email or just lightly push them to login and explore payment options? This is where you need a professional.

I practically invented self cure and I have been helping agencies to set up the surrounding strategies that drive that debtor to the payment site. The wording and timing of emails, voice mail drops and other communications that follow a specific strategy are the most effective. I have been doing this longer than anyone so my failures have now driven my success in this field. I had to get crazy to figure the best strategies as the traditional collection tactics I was taught decades ago were not effective.

The second biggest mistake is not setting up the reporting to evaluate the strategies. If the debtor was sent a letter, received 2 phone messages and a voice mail drop which one was the strategy the made them go online and pay the balance in full? You need to know that to evaluate the strategies. Most pay sites are not connected to your system in a manner that these straggles are identified to a reporting system. I can help you cover those gaps so you can get the data.

Are you getting the best results you can from your self cure strategies? Need a tune up? Lighthouse Consulting is the answer. Just a 5% increase in online payments can mean thousands of dollars of profit more each week for most agencies.

Give Phillip w. Duff a call at 305-853-8773 for more info my services.

Problems with hiring quality staff? This works like crazy!

As a consultant I have my finger on the pulse of the debt collection industry but even a layman can see that hiring staff is the biggest hurdle in the US today. The $12-$15 hourly employee in the US is a difficult group to hire and train. First they really don’t want an entry level job and they feel they already know everything so training is tough.

Many of my clients come to me to solve this issue and I tell them It’s a social issue not a business issue. I can’t fix the world, I can’t fix the way these employees grew up, but I can fix the problem.

Yes I can fix it by inserting a different culture of staff. Now your wondering where in the United States I will find a different culture than what seems to exist in every City and State in the US. Well the new dilute is not in the US it’s in Jamaica. These employees have none of the same sense of entitlement of the US staff. The staff in Jamaica are happy to have a job and want to be trained.

Lets back up some now. Call Centres are the second largest industry on the island of Jamaica. Vistiprint, Xerox, Fingerhut, AT&T, Verizon, Direct TV and hundreds more have call centres here. Why you ask, great labor rates, great staff and English speaking. Honestly its the ROI. So the idea of a call centre here is not a new idea and the staff have been working different campaigns for decades.

So how do you take advantage of this labor pool without having to figure out the new culture and a new country to do business in? Lighthouse Consulting Jamaica can provide a turn key solution to you as cheap as $10 hourly including labor, technology and support. Yes for just $10 hourly you can get;

An employee

Computer station

Hi speed Internet connection

Cubicle

Chair

IT support

HR support

So thats an all in cost of just $1600 a month per seat. So that collector has to collect just $1600 in fee to break even. I bet your number in the US is 3X to that number or closer to $5000.

All this and the staff are really more trainable and more willing to work. This is how you solve your staffing problems.

Now your saying “but my clients won’t let me outsource to another country”. Well its not outsourcing the way I help you set this up its your office, you own it. Lighthouse is just your landlord, IT and HR support. The office is in your name, Ill show you how to set up everything you need to open your satellite office in Montego Bay or Kingston, Jamaica.

Call Phillip W. Duff now for more info at 305-853-8773.

My Life In Jamaica And The Heat Of Summer

Well its July in the Caribbean and its hot, not as hot as it’s been in the Western US but it is hot. In Jamaica air conditioning is a luxury not a expectation. Homes here traditionally have AC units only in the bedrooms. Most locals have no AC as electricity is one of the more expensive things on the island. There are no natural resources to burn to run electric plants so Jamaica ships in natural gas from the US to run its plants.

So since my last post lots has happened and a lot more has just gotten delayed in government circles. I have been trying to get all my local docs such as a drivers licence and it is just a big circle of bureaucracy. So to get a new bank account open I needed to register with the NIS office, the National Insurance Scheme. I gathered my local friend/guide and proceeded to the NIS office to get the simple doc which I was told only required proof of your birth to get. I had had my guide go to the NIS office the Friday before to make sure what was required so as not to waste a trip. The following Tuesday we went to the office and it had moved and no-one knew where the government office had moved to. We kept asking people in Sam Sharpe square in Downtown Montego Bay where the NIS office was located a couple days earlier and got a lead as to the new offices location.

Upon arriving at the address given we found a hardware store that reminded me of a big Ace Hardware or a small Home Depot. We abandoned that search and moved on to the next thing on the list buying a TV that I will use as a computer screen at my home office. While we were there we called the NIS office and got no answer. But the guy in the store had a cousin that worked there and called her cell phone to find out that the office was really inside the hardware store from before. We proceeded back to the hardware store and located the temporary office, they are remodelling the one in Sam Sharpe Sq. but they had no phones or computers and could not help me get a NIS card, they suggested I return in a week or so. Welcome to Jamaica.

I was able to get the card in just 20 minutes while visiting Kingston the next week but the drivers license is still in the works. I am getting used to all the delays and hurdles as well as its now my expectation it will take a long time to complete anything so when something happens easily I am surprised and if it takes all day I am prepared as I blocked out the whole day and brought water and snacks.

I spent lots of time last week listening to recordings of the collectors for a particular project that is about 6 weeks into production and was very impressed with the staffs skills. They are performing very well kudos to the clients trainers that came down from the US.

Well Sumfest http://reggaesumfest.com is starting, its the biggest Reggae event in the world, 7 days of music and partying. Its based in Montego Bay so I expect lots of traffic and crazy US and Canadian tourists. Its good for the city in many ways but I like that everything is getting cleaned and painted for the event. It seems like some of these areas only get this attention annually but it really helps the look of the city. All the businesses have new signage, streets are cleaned and curbs have fresh yellow paint. This years festival is the biggest ever.

So if your following this blog your likely interested in agents in Jamaica and this blog shows how valuable my program is by guiding you through all the government hurdles and keeping your costs level even if things like the electric bill increases drastically. No matter what happens your costs are consistent with my program. Call me to learn how you can have staff and overhead in Jamaica at just $10 hourly.

Where’s the elephant hiding in your business?

When I first began helping my clients open up their collection offices in Jamaica it became apparent that that the obvious is often hidden. The problem its hidden from us by our own prejudices and things we have always been told. About a year ago a girl on the island said to me in answer to simple question something that has stuck with me and fits so many situations on the island. She stated “It’s cheaper to buy 50 paint brushes than a paint machine”.

What was meant by the statement? Well in Jamaica labor is cheaper than a machine and it does not require gas, maintenance and does not break down. As Americans involved in the debt collection business we know that the biggest line item on your P&L is labor. We have always been taught this and we believe it but the truth is “Its the Elephant hiding in your business strategies”.

hidden elephant_4ac1e49e108f3.jpg

Labor is cheap and ultra effective in Jamaica. The call centre industry is booming and has been the number two industry on the island for decades. Tourism in number one of course but Xerox, Vistaprint, AT&T and many more American call centres are based in Jamaica. There is said to be 1 call centre worker for every 10 people. The Jamaican staff that I can help you hire are very trainable unlike their US counterparts. The staff being hired in the US as collectors these days are difficult at best but you already know that.

If you own or run a collection operation in the US you should call me to discuss how you can reduce that labor line item and gain a better staff member at the same time. I can help you set up seats for as little as $10 USD per hour, per seat. That means you just need to recoup $400 in fee to pay the costs for a weeks work and facility charges. After that your in the profits on the total costs. The great thing is that for the $10, I’m including the internet connection, computer equipment, IT, HR and cubes in that cost. It is all inclusive!

Come down and look around. Let me show you other shops. Look and you will be doing business in Jamaica. Ya Mon!

Silence Is Golden And Duct Tape Is Silver

As a consultant to the debt collection industry one of my duties is to create and perform collector training classes. I have been doing this for many years and a few years ago I came to a realization which lead me to change my training.

It was hard to get collectors to embrace this new technique as it was revolutionary to them. They resisted and would revert quickly to their old habits but the first few that listened and got the concept were seeing the results in increased liquidation, more debtors would agree to pay and it reduced time on the phone and frustration.

What was the new thing that was so hard to teach collectors, SILENCE. Yes to try to teach a collector shut up and listen is not an easy task but what they will hear will change the direction of the call quickly. At times when I first started teaching listening skills I wished I could put duct tape over their mouth right after they finished the Talk off. Instead I began to teach them to use the mute button. The real trick is not to get them to push the mute button but to LISTEN.

It was listening skills I was trying to teach but collectors are hired to talk and most can talk your ear off about nothing.  So I had to first just get them to shut up so they could listen and hear. What I had learned many years ago from both my experiences and from others in industry is that if you will listen long enough the debtor will suggest a solution.

Here is what I learned, If you tell the debtor that the balance in full is due today and then hit your mute button the first thing is awkward silence, then the debtor will say he cannot pay the bill in full its impossible, then more awkward silence and the debtor says why he can’t pay “I am out of work” or “I am on disability”. This is followed by more excuses and more silence till finely the debtor says “Well I could pay you $5 a month if that helps”. OK now you have achieved the desired results and now the collector can begin to talk and negotiate an arrangement to repay the debt.

What happens is amazing as most people will follow this pattern if you can listen long enough. Remember your last statement was “The bill is due in full today” so thats starting strong. Even though the debtor is starting very low he is now ready to make arrangements and the skills of the debt collector will get the BPA or best possible arrangement.

So teach this method and try this when you hear the staff not listening go by and put 4 inches of duct tape on their cube to remind them to listen.

Silence is golden and duct tape is silver but listening is where the money comes from.

Does The Santander Supreme Court Decision Change Everything? I think so!

Ok what does the recent 9-0 Supreme court decision in Henson V Santander https://www.supremecourt.gov/opinions/16pdf/16-349_c07d.pdf mean for the debt collection and especially the debt purchase industry? It means it could be the wild west. Does it mean that a convicted felon in N.Y. can buy a spreadsheet of debt for $5k and collect it as first party with no fear of the FDCPA and no need for licensing?

Here is how InsideArm explained the ruling “In this unanimous decision, the Court determined that Santander Consumer USA, Inc. did not fall under the plain meaning of the term “debt collector” in the federal Fair Debt Collection Practices Act (FDCPA) when it purchased defaulted loans originated by another lender and proceeded to collect on these loans because it was not seeking to collect the debts “owed another”. The act of purchasing the loans meant that the debt was owed to Santander—not another entity” . https://www.insidearm.com/news/00043001-industry-association-urges-caution-when-i/

So will this change the face of debt purchase and therefore the face of debt collection? Possibly! So if your a debt buyer and you want to reduce your exposure to the FDCPA then you would have to collect the money yourself in-house. The collection agencies that have always done the work for you are now a possible FDCPA lawsuit liability. Will the third party agencies disappear and be replaced by in-house shops? Will this spur debt purchase again to be a big business? Will the Supreme Court amend the decisions to say something different or re interpret the meaning?

There are many questions and possibilities but on the face it looks like this to me based on the decision. I believe this will change the debt purchase industry by allowing it to grow. If the decision allows for someone to buy debt and collect it as first party then the need for third party agencies will diminish for the debt buyers. The debt buyers who in most cases were already increasing there in-house shops due to the no resale provision in most sale contracts, making the buyer keep the debt forever, will now build those in-house shops bigger and bigger. They will expand offices, build payment sites, buy software, increase head counts and embrace nearshore operations to reduce costs.

What will this do the average collection agency out there? Not too much because only a few agencies are dedicated to working debt buyer business, most are healthcare or banking type collection shops and these accounts will not be effected in the same way as debt buyers. Hospitals will continue to hire agencies, banks will still place the debt with agencies prior to sale. But it will have an effect on the agencies that are dependent on debt buyers for business as they lose market share to the in-house shops.

Many debt buyers will also go on with business as usual because they hold themselves and their third party agencies to standards similar to the FDCPA whether they are required to or not. The biggest debt buyers will continue to place accounts but they may increase their in-house staffing and reduce the outsourced debt volume. But look at the Square2 model which did not work well before this ruling. They had franchisees not third party agencies to collect there debt.  Now this decision makes their in-house shops first party and the franchise idea has much stronger legs.

There are many scenarios but this will have some impact and it is likely to be big in my opinion. Call me if you want to discuss this and how you can protect yourself or find opportunity in this decision.

My Life in Jamaica Continues

Well its been another month in paradise and here is what is going on with Lighthouse Consulting Jamaica and Phillip Duff its CEO. It was a wet week in May on the island which lead to heavy flooding. Most of the interior of the island received hurricane volumes of rain for a 4-5 day period causing many roads to be washed away and lots of flooding. Montego Bay and Kingston were the least effected areas. There was no hurricane it was just a tropical storm with lots of rain.

Following the biggest day of rain in which the entire island was getting inches an hour my internet and TV went out at my residence. The company that I and most of the island get service from is FLOW, think of them as Comcast. I have learned patience from the island already so I waited a couple of hours for service to get restored and then called FLOW to find out what might be the problem. I got the following message;

“Due to heavy rains the Montego Bay area Flow’s service has been interrupted. We apologize for the inconvenience, Also due the inclimate weather in the area many of our service reps were unable to make it to work today so unless your need is a life and death situation please call back at another time.”

Life or death? Internet and TV service that is life or death? HUMMMMMM. Well my service was restored later that night but that was an interesting message.

So the last week of May has been challenging as I had 1 new collection agency client in Kingston training 24 collectors to work on their system and at the same time had 5 guys in Montego Bay as prospects. The two cities are a 2.5 hour drive apart. Thank God I have a strong partner and team, Karl my partner was able work with the new client in Kingston while I entertained the prospects in Mo Bay. Both of us did make the trip back an forth to see the other but it went very well over all.

I was able to experience a new thing on the island by flying to Kingston and back to see the new client. The experience was a great one and this will be a common travel method for me. The flight was on a 24+/_ seat Inter-Carribean Airlines Turbo Prop plane that made the trip in 22 minutes a great improvement. It allowed me to meet with the new client and have lunch before I headed back to Mo Bay to sleep in my own bed that same night. The trip was easy and I will repeat it many times in the future.

While the new client training was happening in Kingston I had 5 executives from a large collection agency in the US at Half Moon the most wonderful resort on the planet in my opinion. Half Moon in Montego Bay has hosted every US President since the 50’s and every British Prime Minister as well. Jackie Kennedy wrote her will at Half Moon on Half Moon stationary. There are images of many famous people in the lobby such as Richard Branson, Prince Harry, Prince George, Usain Bolt and many more.

The prospects fell in love with the island and were ready to do bussiness here even before we went and visited the call center in Mo Bay. I know the CEO of this company very well and told him the 5 day visit “would change his life” and it did. He found a way to turn off the cell phone and relax in the private villa with a pool and a maid and butler. He also clearly saw the opportunity of doing business here. The great English language skills, their understanding of the US culture, the low cost of start up, the overall ROI, the reduced cost and the ability to have staff that want to work. He signed on the bottom line to start with 88 agents, 🙂

As this business is growing at a pace faster than Usain Bolt I have had to completely give up my US residence and be on the island 100% of the time. I have 10 new prospects a month and 5 of them are signing contracts so I have to be here to make my clients and myself successful.

If your reading this blog your interested in either just want is happening or being part of it, let me suggest you come to Jamaica and let me show you what you can do here. Let me show you just how easy I can set you up to have your own office collecting your debt in Jamaica at half the cost your paying now. “Come to Jamaica, you’ll do business in Jamaica.”

It’s not how you skin the rabbit, it’s how the rabbits fur grows back.

Well first of all I do not suggest you try to skin a rabbit thats alive so don’t send me letters. But there some meaning in this statement like many folk sayings across the US. If you are in the debt collection industry this relates to your business like this.

The biggest change in the debt collection industry over the last few years are the strategies used to collect the money. In the past the industry had 2 clear channels to get payments from, mail and phone so they sent letters and made phone calls. Well anyone in the industry today knows that letters do not collect near the numbers that did even 10 years ago and phone calls have so many compliance issues its hard to justify making that outbound call to a debtor.

So we have created more ways or channels for the consumer to pay. We have changed how we skin the rabbit because we need a sustainable business model. The debt collection industry has adopted self cure options to allow the rabbit to skin itself. So with a website that allows the consumer to go online 24/7 and pay their bill without any human interaction has allowed the consumer to skin themselves. And if we have done a good job they will continue to enjoy the experience of self skinning and will do it again and again. The self skinning allows the consumer to grow back the fur and then come back again for a trim without all the phone calls and letters.

So now if you want to be the most successful you can be you must perfect your self cure strategies so the consumer returns or so the consumer completes the transaction. Your payment site and all leading up that first consumer log in have to all be the best strategies possible these days as you may only get one chance to get this consumer to self cure.

Lighthouse Consulting created self cure and has the industry embrace it. If your interested in how to build a best rabbit self skinner in the industry you must talk to Lighthouse Consulting. Call Phil at 904-687-1687 now.

If there is an elephant in the room, I brought it

As a consultant to the debt collection industry I spend lots of time looking at other peoples businesses and telling them what they are doing wrong. Its quite a balancing act to tell a successful business owner how they have screwed up. It has always reminded me of the old statement about a elephant in the room and no one notices it. The problems in most businesses look so obvious to me I am wondering why they can’t see it of even if they do see it why they don’t fix it.

Well this is what drives my consulting business so I should be used to it now. So how do you see the elephant in your business? Try these 3 things to help you see the elephant in the room.

The restaurant business consists of 2 primary factors that will gauge the success of the concept, food and labor cost. The rent and the cost of utilities stay fairly steady but labor and food costs will fluctuate with the seasons and with the volume of customers. If you want to be successful you always keep a eye on these two areas to be successful in the restaurant business. Debt collections has similar key factors as well.

The first checkpoint is your cost per seat if your cost to do the business is high then all your unit yields have to be high and this is a hard thing to do these days with the low liquidity of most placements. If you want to explore how to calculate your cost per seat then give me a call.

Next is your unit yields or the actual dollar value you collect per account placed. In other words if you got 100 accounts that equaled $10K in face value and you collected $1000 in total then your unit yield would be $1000 divide by 100 accounts or $10 unit yield. So just like your cost per seat if your unit yields are too low then its another sign you have a problem. A good unit yield is $13 but some companies that work very lean and have lots of volume can make money with $8 unit yields. If you want more info on your unit yields call me at 904-687-1687.

And third KPI is the processes you are using. This is not a easy thing to measure like the cost per seat but it will highly effect your cost per seat and the unit yields. If you not using the best and most efficient process to collect the debt your wasting money and leaving money on the table both at the same time. My consulting services can help you get the most out of your business give me a call.

My Thoughts From The NARCA Conference

Well as always after a major conference I recap MY experiences and share them with you. Well the Spring 2017 edition started with a great reception on Wednesday night in Orlando Fl. The JW Marriott is a great hotel though it is quite pricey. It seems as most of the attendees were staying on the property which always makes for a better conference as the people you want to talk to are more available.

The bar was hopping when I arrived at 5PM on Wednesday straight from Montego Bay, Jamaica. I flew into the Orlando airport at 3:30Pm and was at the Marriott at 5PM ready for a drink. Thats when the high prices became apparent as my drink was $17. The bar was packed with NARCA attendees all talking loudly, well dressed and ready for the conference to officially begin at 6Pm with the Cocktail reception. As I looked around the room I realized that there were a lot of new lawyer looking people in attendance. New people in the debt collection industry in 2017 I ask myself, yes was my answer as most of the newbies looked to be young. Another glance and most of the old guard were also there but sitting and not so loud. I saw old friends and past clients like Sam Tuchman, Brian Williams, Richard Alpin, Ron Canter, Fred Daniels, Juan Andreau, Andy Hall and so many more.

So I began to mingle and listen to find out what everyones attitude was like, in past years it has ben about of doom and gloom. As I spoke to the old guard, the only ones I know, as I guess I’am the old guard also I learned that the attitude was upbeat. Client meetings which had started earlier in the day had went well and that can set the tone for the conference in many ways.

Next I headed to the Exhibitor hall and was impressed with its size and layout. About 50+ vendors were in attendance and though there were a few new vendors most were the old guard as well. My friends at Quantrax had bought me a badge so I first headed to meet with Mark and see the new booth. Quantrax had a nice location and the new booth was much better than the old one. I proceeded to view all the booths and nothing stood out it was payment providers, software vendors, asset location and process servers just like every NARCA Conference.

As the food and alcohol began to flow it was apparent that the quality of food was high, in fact much higher than the previous 5 or 6 NARCA events. I attribute most of this to the Conference location, the JW Marriott was expensive for a reason, it was really good. The food was noticed by everyone and most were making it dinner not just a snack. This was also good for networking as attendees stayed in the hall and mingled till the very end. I was exhausted after international travel and went back to my room for some well needed rest.

Day 2 started with Starbucks and lots of work to catch up for me. At 8AM the exhibit hall opened and breakfast was served, once again great food. So I got coffee and occupied a table and proceeded to do some work. As I did I listed to the attendees and booth personal around me and everyone was having a “good show”. The booths seemed to be getting great traffic except for the 5th row by the wall and the flow did not ever get to them. They did put the seafood on that side to create some flow but that side got much less traffic.

As the day progressed and I spoke with more and more people and saw the attitude was positive and there were no big topics as in recent conferences. The younger attendees seemed to be setting the mood and they are all hopeful and jolly. The old guard was still very guarded in their attitude and their conversations. They are hopeful as well but much less likely to say its getting better.

The attendees did seem interested in new technology as several were coming by the Quantrax booth and asking about the product. I was also talking with Missy and John at the Microbilt booth and saw many people looking for technology solutions there as well. Many people ask me about my new operations in Jamaica which was very good as it proves that my blogs are still very powerful and well read.

Overall I would say it was a “good show”.