Enhance debt recovery performance with dialling capacity

The truth, the whole truth, and nothing but the truth”. These are the words used in South Africa as a sworn testimony of evidence given. It is an indication by the teller of his commitment to tell the truth.

Many people like to tell white lies, exaggerate the truth, or enhance reality ever so slightly. Some people tend to deviate from the truth, but convince themselves that the deviation is justified and not a false testimony.

Take for example a dialler company that will, during a sales pitch, tell you that their dialler will enable you to make 550 phone calls per person per day.

These numbers sound extraordinary,
but are quite obviously hog-wash.

Let me do the calculation: Let us assume that a debt recovery agent works 8 hours a day non-stop … without a bathroom break and with no lunch break (This is, in itself, a crazy assumption … but let’s roll with this scenario).

Such a debt collection agent will then work a total of 480 minutes in a single day. If such a collection agent makes 550 phone calls per day, it means each phone call duration was a mere 52 seconds on average. Herein lies the dilemma …

There is no part in any universe where it will be deemed productive for a debt recovery agent to make calls at an average duration of 52 seconds per call.

If a dialler sales person were to change the story and told you that his dialler software was able to launch … initiate … or activate phone calls to debtors at the rate of 550 per person per day, such a statement could be deemed correct, but totally irrelevant. It helps no one if a debt recovery agent can initiate 550 phone calls in a day, but cannot speak to the debtor.

Statements like being able to make 550 phone calls per person per day is therefore irrelevant but often still enjoys attention from the listener.

If we unpack the ability of the technology a little further, one would find that smart diallers would be able to initiate numerous calls at the same time, targeting a predefined list of debtors on a predefined list of phone numbers. Such smart diallers are then able to determine whether the initiated phone calls are answered, and which of those are not (either by reaching a voicemail or by simply being terminated).

A smart dialler will then route the connected calls through to a debt recovery agent and allow the agent to enter into discussion with the debtor (or the person answering the phone call if it is not the debtor).

A smart dialler therefore strips out the unproductive phone calls and patches only the phone calls that may result in a positive outcome through to the agent.

This is of great value to any debt recovery company. However, the truth is that the real statistics of agents speaking to debtors would be much lower than and often-stated 550 calls per person per day.

I believe that no phone call with a debtor is a productive phone call if the agent didn’t take the time to update all the relevant demographic information of the debtor. This takes time and therefore I cannot see that a good phone call with a debtor can be anything less than two minutes to start off with.

In addition, our industry is no doubt heading towards a situation where detailed affordability checks will have to be done during a phone call with a debtor (I am not referring to the examples of the affordability checks that were exposed in the recent the University of Stellenbosch-case, which clearly illustrates that no attempt was really made to do this properly). Such a discussion can by no means be rambled off in less than a further two minutes. When and if this becomes compulsory, phone calls will take longer to complete. Good collection companies already take the time to check on affordability, even though it is not compulsory at this stage.

Lastly, if one makes use of a debit order or Naedo process, one is required to obtain a comprehensive verbal mandate from the debtor to strike his or her account. These mandates need to be logged as voice files and must be available for inspection when required.

Such a mandate requires the verbal presentation of a predefined script of text to the debtor, without which the banks may question the validity of the mandate. I believe it is impossible to do this (and confirm bank details) correctly in less than one minute.

The above three components of a phone call indicate that a productive phone call with a debtor, concluding a fixed arrangement for repayment of a debt, cannot and should not be less than five minutes. It is my strong belief that a phone call concluding a repayment arrangement in less than five minutes, indicates laziness on the part of the collector and a lack of management from business owners. This can never be praiseworthy. Let’s continue with the calculation … (For purposes of this article, I will refer to a five minute phone call as a ‘good call’)

If we accept that a good phone call takes 5 minutes, it means that an agent working tirelessly without a break will be able to make 12 good phone calls in an hour.

This means that, if the same highly active agent works eight hours non-stop every day, he or she will be able to make 96 good phone calls per day. This, in my mind, is an illustration of a highly productive debt recovery agent. Anything more than that, is an illustration that one is taking short cuts that will later return to bite.

If the straight forward number of phone calls made per person day is therefore irrelevant, let’s explore which statistics are relevant.

Statistic #1: On all the calls made by the dialler, how many resulted in a contact established with a speaker on the other side?

Statistic #2: How many of the calls in #1 above resulted in a right party contact? (i.e. the call connected to the debtor personally)

Statistic #3: How many of the calls in #2 above resulted in a fixed arrangement to repay the debt? (This statistic can be broken down further into smaller chunks by recording the age of the debtor, the time that the debtor was contacted, the day of the week on which the debtor was contacted, the number on which the debtor was contacted, the size of the debt, the type of debt book involved, the age of the debt and the repayment amount).

Statistic #4: How many of the fixed arrangements made in #3 above were actually honoured and paid up without requiring further intervention?

I must confirm a caveat to my 5-minute call rule … I am assuming that the calls in this scenario deal with new debts initiating discussions with debtors. I am excluding mere reminder phone calls as they have a much shorter duration.

If you are using a smart dialler or if you are in the market of obtaining a smart dialler, do not pay too much attention to the number of calls that can be initiated by the dialler automatically.

The science of using a smart dialler goes much deeper than that …

Peter Rafferty
Chief Executive Officer