Challenge

Despite having a well-established collection strategy in place, our client was burdened with an above-average customer churn rate and associated revenue leakage due to a heavy reliance on manual processes and unreliable customer data.

As a result, our client was struggling to engage with disconnected accounts in a timely manner which was impacting on customer experience, and the volume of unsuccessful customer contact attempts was also creating a significant drain on resources which could have been deployed elsewhere.

Additionally, our client was also experiencing high levels of recourse from the sale of aged debt portfolios, particularly in the area of Insolvency. Almost 1.5% of customer accounts were regularly returned back to the client, significantly impacting their ability to realise the full proceeds from any debt sale.

 

Solution

Working in partnership with our client, we undertook a full review of their credit life-cycle process, highlighting opportunities to maximise revenue, increase financial certainty and reduce operational inefficiencies, while enhancing customer experience and brand loyalty.

Leveraging our vast pool of market-leading data and insight, we were able to understand our client’s customer profiles in greater detail and develop a bespoke collections scorecard tailored to each individual customer journey in order to determine whether they would be best supported by a DCA or debt sale team. 

A new, fully-automated, scalable business process with integrated trace and cleanse capabilities was also implemented, enabling our client to validate customer contact details and submit accounts to Lowell for pre-sale assessment securely and efficiently.

Results

Through this new proactive approach our client is now able to reach out to customers at the optimal time, offering them the most appropriate course of action.

By verifying customer contact details through our trace solution, our client has seen a significant improvement in customer contact success and satisfaction. Over 5,000 accounts are verified on a daily basis, with an average of 11% resulting in new contact details being identified. The impact of which has been a reduction in customer churn of over 2%, with the added benefit of improved operational efficiencies from the reduced number of letters issued that will never reach the right customer.

Disconnected customer accounts are quickly directed to a collections team who can offer the most appropriate level of support to help them reduce their outstanding debt more effectively. Of the 95,000 accounts assessed, a number have been deemed more suitable for sale rather than DCA and have subsequently been transferred to us.

As well as providing a better, more personalised customer experience, this new approach has enabled our client to improve cash flow as a result of accounts being sold more quickly in the customer journey. Our client has also witnessed a stronger performance from their DCA as they are now focused only on those customers who are well-matched to the level of support they can provide.

The ability to auto-detect ineligible accounts for sale has also resulted in a reduction in customer recourse of 66%, bringing the average level down to 0.4%. Not only has this significantly improved customer experience and FCA compliance by reducing the risk of complaints, it has also increased financial certainty by eliminating the requirement to hold a provision for post-sale recourse. In addition, revenue leakage from inefficient manual processes has also been reduced.

 

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Get in touch

To find out more and to discuss your company’s specific requirements, please speak to our sector expert: Rob Oxley, Account Director Robert.Oxley@lowellgroup.co.uk, Tel: 07554 455087