Two Factors to Increase Recurring Payments
There are two major factors that drive the recurring payment stream in your office. You should be doing everything possible to maximize both factors.
Increase Monthly Payment Amounts
The first way to get more from your recurring revenue stream is to increase the payment amounts. If you can get each staff member to increase the payments they are setting up with the consumers by 10%, that quickly adds up to a tremendous increase, but what if you could get 15 or 20% higher average payment amounts?
Well here is how you do it, and it is so simple.
1. First, get some data on your recurring payments, so you know where you currently stand. Pull a report of all the successful recurring payments over the last 30-90 days.
2. Calculate your average payment amount on your Recurring Schedules? _____A______
3. Sort the payments by balance and then look at the payment amounts. Then sort by the payment amounts, how many are the same amount? Chances are you have many payments at $25, $50, $75 or $100. How about odd amounts? Do you have payments at $58.86 or $33.67 or $106.08?
Why do you have so many even payments? The answer is easy, because the collector gave them a round number to pay.
But why is that wrong you ask? Because when your staff
negotiates for a payment arrangement using even numbers they leave easy money
on the table.
Have your collection agents try this, tell the consumer “I can offer you a payment arrangement, but I can only extend the account out for 6 months, since that is the longest this client will allow on interest free payments to liquidate the debt. That will equal a little more than the $100 a month you requested, but not by much. It will equal 6 payments of only $116.36, when can you have the first payment?”
That is an easy 16% increase in payment size and since there is nothing to negotiate based on the offer, the consumer will accept the arrangement and pay it. If they can pay $100 monthly, the extra $16 will be easy.
Negotiate Monthly Payment Amounts based on Time, not Dollar Amount
The second way to increase your recurring revenue stream is through negotiating the payment arrangement by time, not dollar amount. When your staff can break down the monthly payment amounts by time, they can reduce the time and effort spent negotiating as they have now taken control of the call. Your staff is now stating the arrangement instead of the consumer.
So back to the numbers. Whats ___A___ x 20%?
The answer is your new average payment amount!
PDCflow has a flexible Recurring Payment Scheduler to easily set up schedules based on balance and time. For more information see the info at PDCflow RecurringPayments or call 877-732-4814 option 1.