Driving Collections Results through Automated Voice Messaging

Transcription

1 Driving Collections Results through Automated Voice Messaging How Voice Messaging Impacts Key Business Objectives and Performance Metrics in the Collections Industry A SoundBite Communications White Paper

2 SoundBite Communications White Paper 2 Executive Summary Over the past decade the ratio of consumer debt to personal income has risen dramatically, and, not surprisingly, delinquency is also on the rise. At the same time, within the collections industry there is tremendous pressure to do more with less. Automated Voice Messaging technology is being adopted across the industry as a way to address the most chronic challenges of collections: penetrating portfolios, focusing agents on inbound calls and high-percentage opportunities, and growing the call center s capacity, not its headcount. In order to recover more debt more efficiently, agents must connect with debtors as early as possible. In traditional manual and predictive dialing environments 50-75% of each collector s time is consumed by wrong-party connections and answer machine pick ups. AVM technology can focus almost all of an agent s time on conversations with opted in right parties. Increasing penetration rates is key to building competitive ranking for 3 rd party firms and just as important to 1 st party collectors trying to reach delinquents in time to avoid charge offs. A hosted AVM solution with essentially unlimited telephony capacity and automated right party verification can penetrate portfolios deeper and faster without adding headcount or T1 lines. The experience of hundreds of collections organizations has confirmed that liquidation rates are helped, not hurt, when collections professionals communicate with debtors via highly-personalized, pre-recorded, and often interactive messages. AVM eliminates the pregnant pause, at the beginning of the outbound call, also known as dialer delay, that causes so many recipients to hang up before learning the purpose of the call. High quality voice messages communicate clearly and consistently the equivalent of putting your best agent on every call. And automated voice messaging gives the debtor more privacy and a sense of control, leading many to decide to engage with a live agent or make an IVR-based payment. The key advantages of hosted AVM for collections include: Unlimited calling capacity to penetrate portfolios and handle fluctuations Auto-managed call pacing to keep available agents busy while controlling debtor hold times Automatic right party verification to keep agents engaged with inbound calls from right parties who have opted-in to the conversation 98% accurate answering machine detection and messaging to generate more callbacks (dialers leave fragmented messages 20% - 30% of the time) Much higher agent productivity to reduce labor costs by as much as 70% Integrating with existing Interactive Voice Response (IVR) systems for autopayment transactions

3 SoundBite Communications White Paper 3 A Quick AVM Primer There are three common types of automated voice messages: Alert Messages: An alert is one-way communication a recorded message that does not require a live agent and does not solicit a customer response. Collections alerts are used to prompt a callback at the debtor s earliest convenience. The personalized nature of the message as well as SoundBite s answering machine detection drive higher callback rates. Automated Agent-less Messages: These messages are automated two-way communications that deliver and capture information without the participation of an agent. In most cases, the voice messaging system is interfaced with an IVR system. The IVR guides the call recipient through a transaction such as an automatic payment. Direct Connect Messages: A direct connect message is an interactive message that automatically verifies the identity of the party and then transfers the call to an available agent. Robust AVM solutions offer versatile message scripting that allows debtors to choose to self-serve through an IVR system or interact with an agent, whichever they prefer. Collections agencies have two options for implementing voice messaging solutions: onpremise hardware and software or on-demand, Application Service Provider (ASP) solutions. With the on-premise approach, the collections agency or department purchases and maintains its own hardware and software. The disadvantage of on premise solutions is that they require up-front capital investments, have limited capacity, generate ongoing maintenance fees, and are expensive to upgrade. As part of the general trend toward online technology, many companies have begun to blend in or switch over entirely to a hosted (a.k.a. on-demand) AVM application. In this model, the AVM vendor (such as SoundBite Communications) hosts and manages software from a secure, central data center. Customers access the software through a standard web browser and, in the case of SoundBite, pay for the service through a usage-based fee system. SoundBite maintains the hardware and software and takes care of the upgrades and maintenance, allowing the customer to always have access to the latest technology and most current capabilities. Traditional arguments that on-premise solutions are more secure or offer tighter integration with internal systems have fallen away as Internet-based applications such as SoundBite have proven to be safe, flexible, and reliable (mention SAS 70 Compliant?). Web services technology has made sophisticated integrations easier to set up and manage in many cases than enterprise software applications. Increasing Revenue, Profitability, and Productivity with AVM When used as either a supplement to or substitute for predictive dialers and/or manual dialing, voice messaging has the ability to impact three key business objectives: Revenue Profitability Agent Productivity Revenue: Voice messaging can help boost revenue in both first and third-party collections by ensuring optimal penetration of call lists or portfolios, even when account-to-collector ratios (ACRs) are high due to attrition or volume fluctuations. Many companies further enhance attainable revenue by reinvesting the savings

4 SoundBite Communications White Paper 4 realized through voice messaging to increase spending on skip accounts or agent incentives. Profitability: Voice Messaging impacts profitability by making it easier to collect the same or more revenue with fewer full-time employees (FTEs). The voice messaging system places the outbound calls and verifies that the right party has been reached. Only then is the call transferred to an agent. This eliminates the time that collectors typically waste with wrong parties and answering machines and allows a smaller pool of individuals to focus on qualified inbound debtors. Agent Productivity: As previously noted, voice messaging helps collections organizations recover the same or more money with fewer agents. That means collectors spend more time talking with people who are likely to pay and ultimately generate more revenue per seat. A greater number of RPCs per agent and/or per agent hour also enhances job satisfaction, livens up quiet floors, and gets collectors more excited about dialing campaigns. Furthermore, when new hires get a greater number of RPCs per hour, there are more coaching opportunities to speed their development. The AVM Impact on Key Performance Metrics Voice messaging improves key performance metrics in both first and third party collections, including: Liquidation Rates Dollars Collected Per Hour Roll Rates Cure Rates Penetration Rates RPC Rates Net Charge-off Rates In third party collections, voice messaging helps maximize the Dollars Collected Per Agent Hour. The following equation summarizes how voice messaging impacts Dollars Collected per Hour. Unlimited calling capacity 98% answer machine detection Personalized messages Model best agent Opt-in participants Optimized agent time $$ Collected per hour = Penetration Rate x Contact Rate x RPC Rate x PTP Rate x Kept Rate x Avg Pmt FTE x 173 hours / month As the formula above shows, increasing outbound calling capacity raises penetration, improving answering machine detection increases productive contacts by generating callbacks, flexible scripts and high-quality voice messages drive more RPCs to your IVR or agents, and the opt-in nature of the call increases promise to pay and actual collections. At the same time that all of these variables are being increased, the

5 SoundBite Communications White Paper 5 number of full time agents required to achieve success drops dramatically. The result is higher dollars collected. All AVM Solutions are Not Created Equal In one sense, it s easy to understand what a great AVM solution is made of. Start with a telephony and Internet platform that offers unlimited capacity, security, and connectivity, then build on top of that the ability to upload and manage calling lists, script your voice message content, set up calling campaigns, and report on the results. But, not surprisingly, there are many differences between the feature sets and capabilities of commercial AVM vendors. The following are some key areas that collections professionals should evaluate when considering the right AVM solution for their business: Can the AVM system handle calling lists in multiple formats? Can you submit a list to your AVM vendor in the same format you use with your dialer? Can you manage multiple calling lists easily? If you have multiple call centers or multiple agent skill sets, can your AVM system offer skills-based call routing to take advantage of the teams strengths? Can you control multiple call center campaigns from on central location, share suppression lists to ensure compliance, report consistently, and track when, where, and how often an individual phone number is called across all locations? How accomplished is your AVM vendor at creating effective scripts, choosing the proper length, wording, response options, personalization, etc. to maximize results. Does your AVM system use state-of-the-art text-to-speech technology for seamless personalization? Can you prerecord common names in the narrator s own voice? How much flexibility is provided in setting up campaigns? Can you easily set up a call escalation schedule to try multiple phone numbers for each debtor? At different times of day? How easy is it to set up multiple call passes against your list? And can the system suppress from the next pass the numbers of right parties reached in the last pass? Can you quickly create new campaigns using your most effective past campaigns as a template? This is the best way to adopt best practices over time. Can your AVM system respond to changes in call center staffing and workload from minute to minute and intelligently adjust the rate of calling? Can you set parameters such as maximum hold time in order to optimize the number of direct connects to your agents? And if, for some reason, attempts to connect to the call center begin to fail, can the AVM system pause calling entirely until the problem is resolved? Does the AVM system offer real-time reports that cover all the important variables, such as hang-ups, bad numbers, busy signals, answer machine messages, and direct connects? Can you quickly get the results of any/every call made during a campaign, so you know with certainty who was called when, and with what outcome? Can you auto-deliver reports by to all the managers who need to get them? When these capabilities are applied to the collections effort, outstanding results can be achieved. Third-Party Case Study: Improving Profitability, Productivity Challenge A third-party collections agency wanted to improve profitability by reducing operational expenses and increasing the revenue. The agency identified five specific challenges:

6 SoundBite Communications White Paper 6 Too many accounts and not enough FTE Needed to collect higher volume of debt to stay competitive Looking for a faster method of reaching more right party contacts Reduce operational expenses Increase employee productivity Solution SoundBite was deployed as the primary outbound calling solution in conjunction with manual dialing where appropriate. SoundBite s pay-as-you-go model gave the agency the flexibility it needed to accommodate fluctuations in call volumes. Results The results of implementing Voice Messaging as the primary contact strategy were quite dramatic: The number of talk-offs increased from 7-10 per agent per day to per agent per day The number of average payments increased from ~1 per agent per day to 4 5 per agent per day (Average payment = $200) The average dollars collected increased from $2,000 to $6,000 per day The agency was able to reduce the number of FTE working the portfolio from 10 to 6 agents First-Party Collections In first-party collections, voice messaging positively impacts roll rates, cure rates and charge-off rates. Several factors contribute to this, including: Increased calling capacity Deeper file penetration on the initial pass Connecting debtors to live agents Personalized messages left on answering, which helps to increase the number of call backs By connecting with debtors sooner in the delinquent cycle, voice messaging helps improve roll and cure rates, increases the number of promises to pay and changes the payment patterns of habitually slow payers to pay sooner. When calls are sent out sooner, the debtors know that call will be made to them and that calls will continue unless they pay. First-Party Case Study: Improving Profitability, Productivity Challenge A not-for-profit, cooperative financial institution had hundreds of accounts that were more than 60 days delinquent, totaling $14 million in debt. To help reduce this debt and prevent it from occurring again, the credit union wanted to: Increase contact rates with delinquent accounts earlier in the delinquent cycle Increase response rates from messages left on answering machines Solution The credit union had employed 13 agents, each with a manual dialing capacity of approximately 100 accounts per day. Reminder letters supplemented agent efforts

7 SoundBite Communications White Paper 7 throughout the delinquency cycle. In place of this strategy, the Credit Union chose SoundBite s on-demand Voice Messaging solution. They used SoundBite to begin calling and delivering personalized messages to delinquent debtors after just three days. SoundBite provided the added ability to connect debtors to live agents for payment. Results SoundBite enabled the credit union to reduce more than 75% of outstanding customer debt in less than a year (from $14 million to $3.4 million). Additional results included: Helped reduce anticipated charge-offs by over 30% Facilitated a 14% reduction of roll rates of accounts moving from days past due to less than 30 days past due Increased the number of promises to pay by an average of 65% Increased penetration rates from 60% to 90% while cutting the time to reach debtors to a matter of hours Changed the payment patterns of habitually slow payers to pay sooner Significantly reduced the volume and expenses associate with the mailing of delinquency letters Transforming the P&L: Composite Example Improvements in a few key performance metrics can transform P&L results. SoundBite has gathered data over hundreds of AVM campaigns conducted for collections customers, and the results clearly illustrate AVM s impact of on agency profitability. The following composite example shows how and where AVM improves profitability on a portfolio of 500,000 accounts when compared to a dialer environment. The key AVM improvement factors are: Labor hours are significantly lower with AVM than with the dialer approach. The benefit is two-fold: lower labor cost on this portfolio, and the ability to re-assign collectors to other projects, thus growing the agency s business without adding headcount. Higher callback rates from voice mail and answering machine messages have a potent impact on the number of high-potential inbound calls ( money calls ) coming into the call center. A much higher percentage of right parties who speak with agents will pay, because the debtor connecting to the agent is volunteering (opting in to the call). Agents spend all their time with right-party conversations and never leave answering machine messages, increasing efficiency, productivity and morale. The table on the next page summarizes results that collectors experience when adding AVM to their calling strategy.

8 SoundBite Communications White Paper 8 Composite P&L Impact Example Based on experience of SoundBite collections customers SoundBite AVM Predictive Dialer Accounts 500, ,000 Attempts 1,442,894 1,442,894 Messages RPCs Messages Left 457, ,290 Callback % 3.20% 2.50% Total Callbacks 14,655 10,432 % of Callbacks that pay 33% 33% # of Payers from Callbacks 4,836 3,443 Dramatic 40% increase in number of payers generated automatically from higher quality answering machine messages. Total RPCs (2%) 28,858 28,858 Total WPCs that spoke to agents 21, ,125 Note the enormous difference in the amount of agent time wasted on wrong party connects. Total RPCs that spoke to agents 14,429 26,838 % of DC that pay 16% 10.0% # of Payers from DC ,684 Total Payers (DC & Callback ,126 Overall 17% increase in number of payers generated by AVM approach. Total Revenue (based on 33% fee for avg $150 pmt) $357,234 $306,321 Labor Total Live Minutes 105, ,331 Total FTE Needed Total Labor Expense $56,886 $192,731 Over 70% savings in agent cost. SoundBite makes agents much more productive, allowing the business to handle growth without adding headcount. Telephony Expense $34,137 $5,354 Other Expenses $57,819 $57,819 Total Expenses $148,842 $255,904 SoundBite s pay-as-you-go pricing is extremely cost-effective compared to the labor savings and increased liquidation rates it generates. Total Profit $208,392 $50,418 Profit Margin 58.3% 16.5% In this example, SoundBite AVM improved margin by 253%.

9 SoundBite Communications White Paper 9 Benefits of the SoundBite Solution Founded in 2000, SoundBite Communications has emerged as a clear leader in automated customer contact solutions. The company has completed tens of thousands of successful campaigns, encompassing over half a billion calls, for thousands of clients. Today the company provides state-of-the-art, automated voice messaging technology that spans the entire spectrum of customer communications. SoundBite s service is hosted and managed from our secure data center. Customers access the service through a standard web browser to set up campaigns, create campaign strategies, upload calling lists, control and monitor campaign execution, and view results in real-time. Unlimited Voice Messaging Power SoundBite s telephony capacity is essentially unlimited. It scales to accommodate any call volume, including "bursting" capability to penetrate calling lists 3x 10x faster and to reach customers within tight best-time-to-call windows. Effective Scripts and Personalized Messages Our experienced in-house scriptwriters use best practices to create clear, concise messages with easy-to-follow instructions. Our multi-option scripts can lead customers to agents, customer IVR systems, or a SoundBite IVR system, depending on factors such as the balance due amount. When direct-connecting to a live agent, SoundBite audibly informs the agent of customer responses spoken or entered through the phone keypad prior to connecting through. Our professional quality voice messages use advanced text-to-speech technology to create fluid-sounding personalized messages from the first- and last-name text fields of your calling list. SoundBite s superior text-to-speech quality rivals that of a live voice. In addition, SoundBite offers Pre-recorded Personalization, in which common first names and family names are recorded in advance by the same voice talent used for the main message. For names not pre-recorded by the live announcer, text-to-speech fills in with lifelike voice results for the less-common names. Maximized Call Center Productivity We maximize call center productivity beyond the level that predictive dialers can achieve by automatically verifying right parties before direct-connecting them to a live agent (or transferring to an IVR system for self-processing). By taking care of the basics, SoundBite focuses about 20% more agent time on live customer interactions and complex tasks, rather than tedious, dead-end phone work. Bottom line: SoundBite keeps agents busy with opt-in, ready-to-act customers who are more likely to yield great results. Leaving a Better Message at the Beep When an answering machine picks up the call, SoundBite accurately detects it 98% of the time (a much higher detection rate than predictive dialers can achieve) resulting in fewer mistakes, no message clipping, and 15% - 20% more callbacks, which can make a key difference in campaign success. More Campaign Options SoundBite makes it easy to create a customized calling campaign strategy that will yield optimal results for each situation. SoundBite offers powerful support for one-way messages (such as alerts and notifications) as well as Direct Connect calling and IVR front-ending. You can create a range of campaigns that suits any type of customer contact, from account activation to satisfaction surveys, from drive-to-store to automated payment reminders, and so on.

10 SoundBite Communications White Paper 10 Better Results from Every Campaign You can control every aspect of your SoundBite voice messaging campaigns via simple online controls that let you manage call rates, number suppression, escalation, and other campaign factors. For instance, you can set up a multi-pass calling strategy, and for each pass set the number of call attempts for each recipient, escalation across multiple phone numbers (home, work, mobile), and the point at which SoundBite should leave a message. As the call passes execute, customers who have already responded can be suppressed from subsequent call attempts. SoundBite keeps your call center agents busy, but not buried, using our exclusive, patent-pending technology to dynamically monitor and adjust call flows as the campaign executes. You establish your desired call center connection rates, ring time and hold time limits, and other factors, then SoundBite automatically adjusts its outbound call rate to optimize agent productivity and minimize hold times. And this feature requires no ACD integration. But when it makes sense to integrate, our Web Services interface allows SoundBite to interact with your existing systems and automate the entire campaign process. Real-time Reporting Our versatile reporting capabilities give you immediate insights into campaign effectiveness, even while the campaign is running. SoundBite offers flexible report formatting, scheduling and delivery options; you can automatically or FTP campaign reports to interested parties. Fast and Cost Effective SoundBite s pay-as-you-go pricing and low cost profile enables customers to launch campaigns in just hours, instead of weeks. We have no annual contracts, so our customers can set up their accounts very quickly and minimize time-to-launch. All costs are incurred as campaigns are conducted, making SoundBite as easy to use every day as it is to try it for the first time. The Bottom Line: Offering the broadest range of sophisticated yet cost-effective voice messaging tools in the collections world, SoundBite truly is your first choice in Voice SOUNDBITE [email protected]

11 SoundBite Communications White Paper 11 About SoundBite SoundBite Communications, Inc. is the leader in ondemand customer communications solutions. We use personalized voice, text, and messaging to Optimize call center performance Personalize one-way communications Automate agentless IVR transactions The SoundBite voice messaging platform automatically connects with more customers in less time, at lower cost and delivers opt-in participants who produce better results. SoundBite provides unlimited calling capacity without any capital investment, and offers the most complete campaign management tools in the industry SOUNDBITE 2 Burlington Woods Drive Burlington MA [email protected] SoundBite and the SoundBite logo are registered trademarks of SoundBite Communications, Inc. in the United States and other countries. Features and specifications in this document are subject to change without notice.