This is very true! Our collections team thought that without their...

This is very true! Our collections team thought that without their efforts 0% of the past due would come in. Once we empirically tested that theory we found how little those efforts actually mattered. The results were about 5-7% actually mattered which then enabled them to refocus energies on things that actually produced meaningful results and wouldn’t just happen organically.

Donje Putnam Are you able to share the efforts that you studied and removed?

Miles Scruggs Donje Putnam the post was more about what people and actions are actually responsible for the results in general, collections was simply an example. We started with the initial premise of the collections which was “I did X today and was able to produce Y reduction in past due.” The feedback was instant and rewarding and on the superficial level, seemed like valid data to measure. Like most things though if you want to dig down to the difference between correlation and causation you need to control for variables and more importantly you need a control group. We created two groups one that normal collection efforts were continued and one where zero contact about past due was initiated on our end for 30 days (we lacked the courage to run it longer than that). We also kept our test group size to 150 residences. We let this run for only 3 months where we would only make contact after a month had past.
What we found is that of the people that went past due, 87% brought their accounts...Donje Putnam the post was more about what people and actions are actually responsible for the results in general, collections was simply an example. We started with the initial premise of the collections which was “I did X today and was able to produce Y reduction in past due.” The feedback was instant and rewarding and on the superficial level, seemed like valid data to measure. Like most things though if you want to dig down to the difference between correlation and causation you need to control for variables and more importantly you need a control group. We created two groups one that normal collection efforts were continued and one where zero contact about past due was initiated on our end for 30 days (we lacked the courage to run it longer than that). We also kept our test group size to 150 residences. We let this run for only 3 months where we would only make contact after a month had past.
What we found is that of the people that went past due, 87% brought their accounts current with zero contact on our end. What this showed is that 87% of the efforts of the collection team was a complete waste of energy. Where as before they were adamant that without their intervention very little of those funds would come in.
I suspect every market will have its own nuances and would need its own testing. Likely each segment of the market as well, which is what we found with further testing and refinement.
Next we tested other variables like income, income concentration, property values, credit score etc against various lengths of time before contact. This type of testing will produce your own sauce but unless you are using a control group, the results are not very meaningful to put it gently. I suspect even a small group if allowed to go past 30 days would also resolve organically but the financial risk starts to eclipse the benefit of the knowledge and becomes academic.
Measure and MUCH MORE IMPORTANTLY, measure thoughtfully & correctly. Attached obligatory illustrative comic. Show more

Donje Putnam the post was more about what people and actions are actually responsible for the results in general, collections was simply an example. We started with the initial premise of the collections which was “I did X today and was able to produce Y reduction in past due.” The feedback was instant and rewarding and on the superficial level, seemed like valid data to measure. Like most things though if you want to dig down to the difference between correlation and causation you need to control for variables and more importantly you need a control group. We created two groups one that normal collection efforts were continued and one where zero contact about past due was initiated on our end for 30 days (we lacked the courage to run it longer than that). We also kept our test group size to 150 residences. We let this run for only 3 months where we would only make contact after a month had past.
What we found is that of the people that went past due, 87% brought their accounts current with zero contact on our end. What this showed is that 87% of the efforts of the collection team was a complete waste of energy. Where as before they were adamant that without their intervention very little of those funds would come in.
I suspect every market will have its own nuances and would need its own testing. Likely each segment of the market as well, which is what we found with further testing and refinement.
Next we tested other variables like income, income concentration, property values, credit score etc against various lengths of time before contact. This type of testing will produce your own sauce but unless you are using a control group, the results are not very meaningful to put it gently. I suspect even a small group if allowed to go past 30 days would also resolve organically but the financial risk starts to eclipse the benefit of the knowledge and becomes academic.
Measure and MUCH MORE IMPORTANTLY, measure thoughtfully & correctly. Attached obligatory illustrative comic.

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