Hybrid collections approach achieves up to 90% customer conversion rates for ‘buy now pay later’ business.

‘Buy now, pay later’ is becoming increasingly popular in Australia, especially in times of cost of living and cash flow pressure. And our client is one of the country’s largest providers of the service.

But, with increasing popularity comes a more competitive market with more players in it. It was vital for our client to create a streamlined customer experience that placed customer empathy at the forefront whilst remaining cost effective, nimble and scalable.

The client faced several key challenges in their collections operations. They needed to improve recovery rates on overdue payments while simultaneously reducing operational costs. 

Additionally, maintaining high levels of customer service and ensuring strict compliance with regulatory requirements were paramount. The company also required a solution that could scale seamlessly with their growing business.

Overall, our task was to engage with customers as early and as closely as possible, to mitigate the risk of bad debt, maintain high levels of customer service and ensure strict compliance with regulatory requirements in a seamlessly scalable model

Following a rigorous examination of the landscape, and a deep dive into our client’s then current operations, Probe CX proposed a multi-pronged solution to address these challenges, which encompassed several key components.

We reviewed staffing models and assessed workforce structures to seek out where and how efficiencies could be maximised, looked at commission structures to create greater incentivisation and updated performance, quality and compliance protocols.

01

Hybrid staffing model

Probe CX transitioned our client’s team from a fully onshore one to a hybrid model with approximately 65% offshore and 35% onshore staff. The onshore team was retained to handle more complex cases, including complaints, hardship enquiries and regulatory matters, and the offshore team was carefully selected and trained to handle standard collections activities, ensuring a seamless transition and maintaining high-quality customer interactions.

02

Tiered commission structure

A new commission model was implemented to incentivise higher recovery rates:

• The standard commission rate was reduced by 41% for regular collections
• A higher, performance-based tier commission for recovery rates by tranche was introduced

This new structure not only reduced costs for the client but also motivated the collections team to strive for better results. The model was designed to ensure that older debts weren't ignored, encouraging consistent effort across all account ages.

03

Digital channel integration

Advanced digital channels and automated workflows were implemented to enhance efficiency and allow agents to handle a higher volume of accounts more effectively. This included streamlining the process for data transfers, handling payment files and managing recall files. The digital focus assisted in managing the complexities of daily operations, such as processing up to 4,000 communications per day and handling various file types efficiently.

04

Performance measurement

Accountability and measurability are crucial elements when it comes to gauging what’s working and what’s not. So, a weighted scorecard system was introduced to measure and improve agent performance across various metrics, including:

• Conversion rates: percentage of contacted customers converted to a positive outcome
• Quality scores: based on compliance, customer interaction and problem-solving skills
• Promise-to-pay ratios: percentage of arranged payments that were successfully fulfilled
• Productivity: number of accounts handled and right party contacts made.

05

Quality control and compliance

Stringent quality control measures were maintained to ensure high standards of customer service and regulatory compliance. This included:

• Comprehensive training programs for both onshore and offshore teams
• Regular quality assessments with a focus on compliance and customer experience
• Implementation of new customer identification processes to ensure privacy and data security
• Ongoing monitoring and coaching to maintain high-performance standards.

Our client reported an 87% increase in digital payments with quality scores in excess of 90%. There was a 50% increase in the amount of collection accounts handled, 41% savings in monthly commission fees, and a 30% increase in average dollars collected per agent

Significantly, there was a 20% improvement in conversion, achieving 80% to 90% conversion rates, against industry standard of 70%.