Hey Phillip, How do I become successful in the collections field? This was a recent question posed to me recently.

Years ago that was easy for me  to answer and hard to do, now its hard to answer and even harder to do. But there is a clear path to success in 2017 in the debt collection industry its just a big wide, steep road with lots of pot holes that can swallow your whole company so pick the correct lane and do not just follow the car in front of you.

So as a consultant to the ARM industry people ask me often why I do not open my own collection practice and the simple answer is people. Managing people is the biggest problem of every client I have ever had with more than 2 people. But I do believe I have the blueprint to  be successful in 2017 in the ARM industry as a collection agent.

The first thing imperative to success is the people, second is the technology and lastly is the consumer experience. Yes, the debtors experience dealing with your agency or law firm is very important these days.

The People

The staff in a collection operation are very important even though in most cases they are not highly paid. The staff that are actually talking to the consumers are task with producing all the revenue in the old collection strategy. A company of 20 had 12 collectors who had to generate all the revenue to pay the 20 staff, overhead, vendors and the owners profits.

In a newer strategy the collection staff are still burdened with producing most of the revenue but now there is a silent collector who ask for no wages, the payment website. (More about this in Technology)

The collection staff are also task with compliance which is a big task these days one that technology can help immensely. But the support staff are very important in the new and old strategies as every dollar spent by the support staff must be recovered 5 fold by the collection staff and technology.

The biggest problem I see with companies is a lack of training and development programs by the company. The second biggest problem is a person with a golden umbrella within the organization. This can fall into two categories 1) the person is a relative, friend or some connection that the owner refuses see all the faults in and even when confronted with the damage they create still refuses to even discipline the person, much less fire them. 2) Or is a person who is making much too much money due to the length of service to the company. This is stopping the company from hiring 3 new hires, or buying new technology, or just making money.

All the above equal people problems.

The Technology

This is now the new compliance officer and the silent non commissioned collector. If you have a modern software package you should be using it to create compliance by only showing accounts to staff when it is proper to call them, to count contacts, limit letters, to create automation of many tasks and much more. Technology from collection software to your IVR all all now very important to the multichannel collection strategy required in todays electronic world.

You must be sending emails, texts, voice mail drops, calling, letters, IVR and pushing the consumer to self cure at your payment site with every channel. So technology becomes the 24/7 collector as the pay site gathers revenue at Midnight and beyond.

The Consumer Experience

This is a part of the business that is overlooked or over focused in recent years. This includes both the clients experience and the debtors experience dealing with you. As you see from the technology section we are trying to drive that consumer to self cure at our payment site so that consumer experience is very important. You must build a comprehensive pay site that is easy to authenticate for the consumer and then easy to navigate to payment, usually a <6 click navigation.

Also the tone and look of the letters, pay site, voice mails, callers, company website and emails have to create a positive consumer experience.

If you can get the right people, working the right technology and creating the right consumer experience you will succeed in the ARM industry, if you need a guide please call me.

Which star from “Gold Rush” best describes your management style, Parker Schnabel, Tony Beets or Todd Hoffman?

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Is it like a Hurricane?

Tony Beets was described as a hurricane manager by his son in the show Gold Rush on the Discovery channel in a recent episode. So what is a hurricane manager? Its a manager that likes to arrive unannounced and immediately begin to question everything that has happened that was not his or her decision. They tend to be loud, look or dress in a manner that is unconventional.

Tony’s son stated that all you can do to weather a hurricane is duck and wait till the high winds subside or it moves on to reap havoc on another location. You try not to get blown away by the storm.

So how do you deal with a hurricane manager? Well from experience I can tell you what happens is the team become a team against the manager not a team with them. The team feels they all have one thing in common, the hurricane as it hits everyone without prejudice so they tend to band together. This is probably how unions got formed.

The staff work well together when the hurricane manager is not present as they have formed a strong alliance and work as a team well. In the long run the hurricane has created the team so the system works but it is all filled with stress.

The largest issue with the hurricane is that all the good things the hurricane blows over and sees improvements in are overshadowed by the team as they huddle together in the corner while the water rises and the wind increases. In many cases the hurricane is very smart and sees the solutions easily but the delivery is so bad the point never gets properly delivered.

If you are a hurricane manager try to reduce the damage by becoming a tropical storm instead, the damage is much less and the staff are much less scared. The best way to do this is to just stop and listen to the staff.

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Is it based on faith in the leader?

Todd Hoffman’s crew is called 316 Mining because they share a faith in God. Todd’s management style would also be best described as faith based. The 316 crew seem to have many issues just like all the other crews featured on Gold Rush but they do have one clear direction and that is to get gold and they have faith that they will find the gold. They have faith that God is really leading them to the gold not Todd Hoffman, not that they believe he is hearing words directly from God, just that God is in charge of everything and it will all work out if they keep the faith and be good followers.

So when the team disagrees with Todd they tend to be less likely to revolt as they have faith. They have faith that Todd is the leader for a reason not known to them but their faith leads them to follow the leader.

Faith is about followers and a team that follows the leader is great until the leader gets in over his or her head or leads the group off the path. This makes for a great team as long as the leader is truly a leader and can lead without the help of his crew. But most leaders are truly great because they have a great team of advisors.Like a President that has a group of advisors the best leaders also use this method to lead.

A leader like this will be very successful because he or she has a great team that will follow them anywhere.

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Is it a bit risky?

Parker Schnabel is very well liked by his crew and the watchers of the TV show Gold Rush. He has a likable personality that is laced with a high level of risk taking, something inherent to the idea of gold mining and with his young age. His management style follows that same flow as he is constantly trying a new machine or a new piece of ground believing that each will be better than the last.

Parker leads by example he will do any job on the gold mine and in fact prefers to do it himself it possible. He has almost driven equipment off a cliff and had many close encounters as he pushes the limits of the ground, his crew and his equipment. But his crew want to follow him because he is so hands on as a manger. The crew just follow his lead to push the equipment, ground and themselves to the breaking point all to make Parker proud of them.

This is a great management strategy as long as you don’t actually fall off a cliff. The team is one that needs little direction to get motivated they just need to follow the leader. The issue is when the leader is absent the team is lacking that level of motivation to make the leader happy.

I Wish I Knew How To ———

Do you ever say this to yourself? Being the leader of a ARM company these days is a challenge and most great leaders look to others for advice. How are you getting your advice?

Presidents have cabinet members, pilots have co-pilots and air traffic controllers, doctors consult other doctors and in fact most hi stress positions have assistants or advisors. As a leader of a ARM company where are you getting your advice from?

First lets answer a more important question; what kind of advise do we need and who would be best positioned to have that knowledge and lend that advise? Well in the debt collection business the main questions seem to relate to either compliance, profits, technology, business development or staff development. So that means you need a very rounded and connected person to advise you on these topics. This is the power of Lighthouse Consulting and Phillip W. Duff it’s CEO, he knows the answers!

Lighthouse Consulting works with debt collection agencies, creditors, law firms, first party, early out, third party, debt buyers and debt settlement companies daily. The knowledge obtained by this diverse business is what we are selling and what our clients need most, solid advice. We have seen hundreds of ways to do the same task and we have learned what works and what does not. Often the answers are easy to describe but achieving the tasks seem unobtainable until someone says have you tried this?

Lighthouse has been providing its clients advice since 2001 and we can provide lots of references but here is a sample.

Phil has impressed me with his ability to listen to concerns and find a solution. His unique approach gets the desired result accomplished with effectiveness. Phil Stenger, Esq. 

We no longer waste time and money wondering what we are missing. There is a greater comfort level, increased excitement amongst our staff and a genuine sense of greater things to come. James B. Atkins, Esq.

Phil has the ability to understand a collection process, see its value and suggest an improved version of the process that can be more productive. Stuart Wolpoff

At Lighthouse Consulting we have seen and fixed every problem known to the ARM industry so why not take advantage of that history and knowledge. For more info on our services and costs call Phillip W. Duff at 904-687-1687 X 101

The one thing you can’t afford to do in todays environment .

Here is a quote from Steve McQueen in the Magnificent Seven

“You remind me of a guy who fell from the 10th story of a building, he was heard saying as he went by each floor.  “All good so far.“

Well maybe I gave that away to easy but yes the answer is be complacent or to do nothing. You cannot sit around waiting on anything anymore. Business cycles move at much higher rates due to the movement of information via the internet. If you sit still for a just one minute you have lost your space in line.

But I guess the real question is what should you be doing? Well thats a three part answer.

If you are an creditor, agency or law firm in the business of debt collection you need to first find cost reductions that do not reduce the service you provide to your client. Better labor at reduced costs, better technology, automation and improved processes.

Secondly you must find to create stickiness to your current client base. Give them more or give them something no-one else can or does. It is that level of service that will determine the stickiness you have with that client.

And that does not mean just meet or exceed their KPI’s, sometimes it means telling them their KPI”s are misaligned or too high to too low. Far to many companies are afraid to tell their clients how they think the money can best be recovered instead they work towards KPI’s that will NOT provide the best results.

Lastly you will need to find or create new business lines and new lines of revenue. You will have to step outside you box and look at things differently to get that perfect client base. You must look at business acquisition differently. Social Media and the internet are now how you will introduce yourself to the next prospect.

Lighthouse Consulting can help you do all of these. Yes even the marketing, actually we do lot’s of marketing and sales assistance in the ARM space.

The 3 Most Ask Questions About Agents in Jamaica

While I have been speaking to people regarding opportunities in Jamaica I have been getting the same three questions over and over so I thought I’d like explained them here.

The first question that is pondered is can you understand the agents? My answer is clearly yes. The first time I went to the island as an auditor for Bombardier Capital the language skills were very good along the call center workers yet there was a clear accent among other Islanders including resort workers.

Here is a link to a redacted call from a recent (August 2016) collection call from a Jamaican call center in Montego Bay. 

Over the last decade even those accents have diminished tremendously. I’ll tribute a large majority of this to the fact that the island started receiving Cable channels from the US and Canada about eight years ago. So they are watching the same channels you are in Fort Lauderdale, Chicago, Montréal, Los Angeles and Miami. This exposure to used car commercials and endless reruns of Seinfeld has changed their language skills and understanding of the US economy.

The second most ask question is do they have the infrastructure to handle my Technology needs. The answer to that has been yes for many years. Initially most of the infrastructure for call centers doing business on the island was created by the government in an area called the free zone. Nowadays the same infrastructure exist throughout the island but especially in Montego Bay and Kingston.

The final question everyone ask is is it safe? My answer is you’re just as say in Montego Bay as you are in Miami, Chicago, Los Angeles or most larger cities in the United States or the world. Jamaicans really want to be Americans therefore their attitudes towards foreigners are very positive. The Jamaican government makes sure there are only a limited amount of visas issued to the United States as it fears there might be mass exodus if borders were oped wide. I have traveled many places in the world and most places they do not like Americans, one of the reasons I have been traveling back to Jamaica over the last decade is the Jamaicans positive attitude towards Americans.

The ONE reason you can’t lose with a Jamaican BPO

Most people first think about near shore or off shore BPO when they are looking for better labor rates but they may be missing the biggest reason to use a BPO in Jamaica.

When you begin to look for better labor rates you are first lead to off shore options like the Philippines or India and when you get further into your due diligence you discover the labor rates are not as good as you were looking for, even though much better that what your paying in the USA.

As your research leads you to near shore operations you see more value for your dollar with the Caribbean workers. You find many English speaking countries with nice Universities and a labor force that desire to have a job not a labor force that feels entitled to work and benefits.

St Lucia, the Dominican Republic, Aruba, Puerto Rico all have BPO operations and the BPO call center crown jewel is Jamaica. Why Jamaica? The biggest reason is the exchange rate, yes the exchange rate. Yes the workers are priced appropriately, they are effective and experienced, they have excellent verbal skills and work ethic but the largest reason is the US$ to JD$ exchange rate.

“The value of the Jamaican dollar has depreciated by 4.8 per cent for the financial year to date compared with a depreciation of 3.2 per cent for the same period last year.” See reference 

There was also a notable increase in the employed labour force by about 40,100 people. Overall, GDP at best is projected to grow at anywhere between 0.5 and 1.5 per cent on average for the entire year”. See reference

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“¡Me pica qué, me rasca aquí! Translated “It itches me here, but you are scratching me there.”

The Quote above is from Judge Million of People’s Court. In the court case, the judge quoted this Cuban phrase, describing a defendant’s avoidance in answering her question, by answering a different question.

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Question avoidance, intentionally or unintentionally, is a common issue in the debt collection process. The agent is seeking specific information that will help him or her collect the debt. Yet they ask a question that leaves the door open for a variety of answers. The individual on the other end of the line ends up providing useless data to the agent.

A debt collection call is much like the job interview process. Many common questions are looking for specific answers, even though the question is vague. For example, it is common to ask an interviewee to, “tell me about yourself.” The manager wants specific work history that relates to the job in question, helping the interviewer to evaluate their work experience. If the applicant responds with places they have lived and their growing up years, this information does not provide valuable insight regarding the type of employee they are. Employers are fortunate that most job applicants understand the questions intent and give the manager what they want, even when questions are obscure.

The collection industry does not work with customers educated in the debt collection process. Consumers require more guidance and handholding, in the form of the right questions. Customers are not typically experienced with the debt collection process, and may be hesitant to cooperate because they don’t want information they provide used against them.

It is the agent’s job to ask quality questions that provide clear guidance on the information they need, and this comes with proper training. Staff training is essential to your business because the agents must remain compliant with regulations, obtain valuable information about the consumer’s financial situation, and bring them into an agreement on a payment arrangement. Those are not the skills of a rookie.

In order to avoid the situation faced by Judge Million, agents must have the grace of a Gazelle with the questioning skills of a lawyer. They must lead the consumer to the conclusion that the agent will help them pay off the debt within their financial constraints and move the collection process forward. Lawyers much like debt collectors must phrase each sentence in a specific manner to increase the likelihood of gathering useful information.

Lighthouse Consulting has almost two decades of experience working with companies just like yours. Their industry experience can train your staff to quickly and efficiently obtain the information required to collect on the debt.

Contact us today to learn how we can increase the efficiency of your staff through proper training.

Do Not Utter The “F” Word

Debt collection is a high stakes game centered around high emotions on both sides.

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The trouble is, when emotions get out of hand, you lose control of the debt collection process.

Always remember Failure is not an option. Uttering the “F” word in this industry spells trouble for your business. However, success is dependent on finding creative solutions that address the many industry issues companies face.

When emotions get high self preservation kicks in quickly, creating defensiveness and instincts resembling the fight or flight response to danger. Consumers are keen to preserve income by failing to pay, and debt collectors must extract payments to stay in business. Compromise and cooperation can be hard to come by, with so much at stake.

Collection agencies are in a tough business right now. We face issues created by regulations, which largely favor the consumer. We face issues created by the debtors, who refuse to pay their obligations or follow through with payment agreements. We face issues created internally by staff or infrastructure. To succeed in this environment companies must refuse to accept Failure as not an option and find innovative ways to succeed.

As a consultant in the industry for the last two decades, I have seen a major industry shift in compliance making it more difficult and expensive to operate your business. The result is the cream rising to the top. The very best collection agencies and law firms are spending the time and money to ensure failure does not occur. They are finding success by aligning with vendors specializing in the industry, improving training for staff, hiring industry consultants who understand the challenges you face, and improving their procedures and processes. The cream rising to the top will lead the collection industry for decades to come.

As a consultant in the debt collection industry, I see both sides of the fence. On the one side are aggressive agencies seeking out improvements, training, automation and better processes. On the other side are agencies doing just the minimum to get by, hoping the regulatory environment will change before they have to spend the money on upgrades. It is very obvious to an industry veteran, like myself, which strategies are the most successful.

Most owners and managers are burdened with daily operations tasks to keep the agency or law firm profitable and in compliance. They do not have the time to investigate the necessary improvements required to maximize efficiency and stay on top of new compliance rules. This reactionary response is more expensive in the long run than taking a proactive approach to legislative changes. As CFPB enforcement increases, it makes more sense than ever to hire an outside consultant to provide innovative solutions for your agency or firm. Changes in both compliance and technology are creating both roadblocks and opportunities for those on the leading edge. Identifying which is essential to an agencies success.

Lighthouse Consulting has been a beacon of knowledge in the debt collection industry for almost 20 years. If you are looking for reliable advice and an intimate understanding of your needs, contact Lighthouse Consulting for information on our services.

My Recap of the Denver ACA Conference 2016 and Comic Con 2016

The 2016 ACA conference in Denver was refreshing, to say the least. It was apparent from the moment I arrived that this was going to be a different conference. Not only was it an educational event full of enthusiasm, but the week also coincided with Comic-Con and Denver gay pride week. The city was lively with activities and fun events, creating many memorable moments.

Even though the Costumes from Comic Con were very distracting, (not to mention FUN), my biggest takeaway from the ACA conference, is that the industry is alive again.

27674227832_85dde03242_bOver the last few years, with all of the compliance issues and a decline in placements, the industry has experienced a theme of doom and gloom. This year, Denver’s conference reflected an optimism and upbeat attitude towards the future. Companies were anxious to find solutions that would stimulate growth and a bright future for industry leaders.

Compliance, which was the main topic over the last few years at ACA, DBA, and NARCA, was a secondary topic, rather than the primary focus. It seems the industry has gotten used to dealing with the compliance issues of today’s collection environment and are now looking for ways to perform business at a higher level that still produce acceptable profit margins.

The decision-makers I met with were looking for technological and operational improvements for their collection agencies or law firms, rather than just moaning and complaining about the increase in regulation. It appears the mourning period is over, and now we are ready to morph into a new life. Companies are focused on opportunities for automation, process flow improvements, more profitable vendors, and advances in technology opportunities that can improve their bottom line.

Vendors like Vo Apps have been around for many years and are now getting traction as the industry is ready to try something new.

There was a lot of buzz at the conference regarding the merger of Columbia Ultimate and Ontario Systems. The two vendors set up booths next to each other and took advantage of all the questions and interest regarding the recent merger acquisition. I expect it to take a year or before we will fully understand the direction of the new company.

There was a smaller number of vendors in the exhibit hall, but that has been a trend at each of the conferences in the last three years. Several new vendors to the industry were represented, and a few from the old guard were noticeably missing. Based on the vendor selection custom programming, contact management, data append, and software development made up the bulk of the service providers.

Overall, I believe the industry has turned the corner and is looking forward instead of backwards or just looking down at their feet. Even though the industry is very challenged by compliance and a lack of placements, it appears that providers who are forward thinking will lead the industry for many years to come.

To learn more about my thoughts or recommendations going forward, or if you just want Comic-Con photos, please give me a call at 904-687-1687 X 111.

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Looking for a Collector? Get a Robot Who is Effective, Cheap, & Doesn’t Complain

Well, your next collector should be a computer, not a live human capable of making mistakes that end up as CFPB complaints. Using automation to drive consumers to self-pay options is the future of debt collection. Yes, your next and best collector should be a robot.

Using a payment site to allow your consumers to self-cure their debt is the most compliant and least expensive way to get your portfolio collected. The only problem is how to drive the consumers to your self-cure payment portal.

Let’s quickly break this down. So, you’ve been using this payment portal for 2 years now and you consistently put up the self-cure link on all your outbound letters. Great, But the results are just fair at best. You tried getting your staff to recommend the site when calls did not end in a collection, but the staff did not see a benefit, so they were not bought into the process. Frustrating.

Next, you decided to step up your game by using emails to get consumers to go to your payment site. So you contacted your letter vendor and started getting consent from consumers to send them emails. But, your opt in consent grew so slowly that you were unable to send enough emails to get an appreciable lift because the collectors were not bought into the strategy sufficiently enough to get the consumer to accept communications this way.

What you needed was a smarter email tool…one that could not just send the mail but track its lifespan. To track its open, read, clicked, what device viewed it, opened again and so on. You need to build a “story” around each person that you emailed. You need to know what happens at every action from when that email was sent out. It’s the only way to learn how that single person engaged, or abandoned and then figure out where and why and “fix” accordingly, building an effective strategy without guessing or wasting money.

There’s help. There is a full feature Marketing Automation Platform designed with the needs of the collection industry in mind. More than just an email system, the SoftWave Collections platform is an intelligent email marketing system that applies rules-based logic to email campaigns designed to optimize your results. These messages often take the form of emails and texts, although other media can also be used.

Soft Wave campaigns are distinct in two ways:

(1) the timing of the messages follows a pre-determined course, there’s a focus.
(2) the messages are sent in an automated fashion that speaks best to a specific behavior or status of the consumer.

If you are looking for a COMPLETE solution and less frustration and guessing, contact me today.

Phillip W Duff / CEO
Lighthouse Consulting
904-687-1687