First time outsourcing collections to an agency? Here's 5 things to consider

Losing revenue on failed payments? Overdue accounts stacking up? Internal collections efforts not working out? It might be time to start thinking about engaging a collections agency.

While you may find this a daunting prospect, collections agencies aren’t all bad! With the right partnership, you can protect your brand and reputation, support customer retention, and stop having to write off all-important revenue. 

Like identifying any new vendor, thorough vetting and careful consideration is key to finding the right fit for your business. To cover all your bases when choosing your first collections partner, take a look at our top five essentials.

1. How do they focus on customer experience?

We get it - D2C businesses invest huge amounts of time, care, and capital into their brand and experience. You can’t jeopardise that, or your values, with the wrong collections partner.

Preserving customer relationships and lifetime value is key, and the quickest way to turn customers off returning is a negative interaction with a collections agency. 

Look for a partner that mirrors your own values when it comes to customer experience and can evidence exactly how they align. In practice this means digital-first engagement coupled with friendly, simple messaging, that’s free of judgement or shame. To be confident, scrutinise their customer Google reviews as well as their overall average rating. This will give you a clear idea of how they currently treat referred customers, and what to expect if you refer your own.

2. Are they across their compliance & regulatory requirements?

In debt collection, the regulatory environment is complex to say the least. It’s ever-changing, highly scrutinised and absolutely non-negotiable. When speaking with providers, be vigilant to determine:

• How do they ensure compliance with specific regulatory requirements in the regions your customers are in?
• How do they comply with consumer protection laws and best practices?
• When new regulations are introduced, how are practices and processes updated? 
• What’s their complaints handling process? 
• What training programs are their customer-facing team enrolled in? How do they monitor and report back on Quality Assurance?

These questions provide a broad overview of what to be on the lookout for. When researching collections agencies, look for information on their website about their compliance processes, licensing, and relevant standards. If you decide to set up calls to screen potential partners, it’s a good idea to ask to speak with a Compliance team member who can talk you through any questions or concerns.

3. How do they measure performance?

Debt collection has evolved beyond the antiquated approach of chasing and pressuring people for payment. The right collections partner will understand how prioritising customer experience is in fact conducive to collections performance, with relevant data to reinforce this. 

It all starts with how they measure success. At InDebted, this looks like:

• Customer engagement - open rates and conversion rates across email and sms, logins to our debt management portal 
• Customer experience - 5 star Google reviews, customer feedback, Quality Assurance reviews
• Collections performance - liquidation rates, spindown, payment plans created, payment plan forecast
• Innovation - increases to engagement or liquidation as a result of new machine learning models or AI developments

Your ideal collections provider should be able to provide regular reporting on all of the above. Even better, you should be able to access it yourself through a client portal, enabling you real-time visibility into the performance data that matters. 

4. What other businesses are they currently working with?

A reliable measure of whether a particular partner is the right fit for your business is their existing client portfolio. If they’re trusted by other leading customer-centric brands, you can feel more confident when it comes to how they’ll treat your own customers. 

Look at the other organisations they work with to see their performance and growth:

• What do their existing clients say about them? Are there public testimonials or case studies available on their website? 
• Do they work with similar businesses to your own, and can they provide evidence of results delivered?

5. Your future needs

Choosing a provider is about more than your immediate needs, it’s also a long term decision. Set yourself up for future success by selecting a collections agency who can support your scale & growth ambitions, provide a consistently positive experience to your customers, and who can be a true partner to you and your business. 

If your business has big goals for growth - whether that’s across market expansion, product development, or simply meeting increasing customer demand, look for a collections partner who can scale with you. There’s many considerations here, but a few include:

• The ability to provide multilingual support if you plan to expand into non-English speaking countries
• Scalability of operations when customer volumes increase, whether seasonal such as after the holiday period or as a result of growth
• Multi-national compliance - from the United Kingdom to the United States, compliance and regulatory requirements differ immensely. If you’re currently multi-national or have future plans to be, save yourself the headache of managing multiple vendors and find a collections partner who can support you far and wide.

Final thoughts

For first timers, due diligence is key. Selecting the right collections partner will enable you to focus on your businesses’ future, rather than chasing lost revenue. With a focus on customer experience, you can strike the balance between recovering all-important payments, with no detriment to your brand or customer relationships.