Ask the Experts: Strategic Planning for 2010: Driving Sales Results

Ask the Experts is an interactive section where readers can ask direct questions to the experts at Kaulkin Ginsberg, the leading strategic advisors to the ARM industry — and a sister company of insideARM.com — as well as other seasoned industry executives.

Question: What should my collection agency do to drive sales results for the new year?

Answer: (from Michael Lamm, Associate at Kaulkin Ginsberg)

It is strategic planning time for agencies! This year will definitely be one for the memory books, as agency owners have been challenged by one of the most difficult collection environments in decades. This time of year, some teams may go off-site or they may lock themselves in a conference room to conduct their planning. Regardless of where they meet, they will be assessing what went right and wrong in 2009 and determining their plan of attack in 2010.

Making a sale to a credit grantor in the recessionary environment of 2009 has been more challenging than in years past — especially with the frequent turnover that we have seen within recovery groups. However, with the increased volume of past-due accounts, credit grantors have been looking to add to their agency networks. This past year, getting that call from the recovery manager was likely a function of whether your agency had all the boxes checked; SAS70, no substantial legal issues (FTC/State AG), the paper skill-set, a strong back-office, and, don’t forget the other important factor, the pre-existing relationship!I challenge you during your planning meetings to dissect your sales strategy and discuss the following:

Review clients you won, lost or terminated

Put together a spreadsheet for you and your sales team to address the following questions:

• What drove that client to place business with you?
• Why were relationships terminated? Was it the credit grantor’s decision or did you end it because it wasn’t profitable?
• What aspects of your sales process worked and what didn’t in obtaining new clients?

Assess sales personnel monthly/quarterly goals

Setting achievable goals throughout the year is critical and needs to be monitored on a regular basis to drive performance. Ask your sales people to list out, if they haven’t already, what they hoped to achieve in 2009 and what they actually accomplished. For example:

• Did they want to sign up X new clients and obtain X new streams of business from existing clients? Were they successful? Why or why not?
• How much in net fees and commissions did they want to generate?
• How many conferences did they want to attend? How many face to face meetings did they want to have?
• How many cold calls did they want to make in a week/month/quarter?

Track profitability of new volume

There is a plethora of volume out on the street for a sales person to go after. Debt buyers are trying to give it away to any contingency agency that wants it. Questions to go through:

• Do you have a process in place to evaluate the profitability of new business? If not, you need to work with your staff and collection software vendor to create a model that you can utilize to assess whether you should take on a project or not.

• Are your sales people taking on the wrong clients just to meet sales goals?

Determine unprofitable clients

Having a top 5 credit card issuer client looks great in your marketing materials, but if you’ve had the client relationship for an extended period of time and you still aren’t making money, figure out a way to make it profitable ASAP. Consider changing staffing levels or moving volume to lower-cost labor facilities, for example. If it cannot be profitable, cut the cord. With the challenging liquidation environment, an agency cannot afford to take on issuer clients that are not profitable.

Leverage your competitive advantage

What differentiates your agency from the pack? What drives a credit grantor to place business with you? Is it your sales person who is visible in the market? Is it your industry specialization?  Is it your client service? Once you’ve determined your unique selling proposition, discuss in your meeting whether you are fully communicating this strategic advantage in everything you do, including your marketing literature, your website, your sales pitch, your conference booth, and so on.

Happy planning for 2010!

Michael Lamm advises owners on their growth and exit strategies for Kaulkin Ginsberg’s Strategic Advisory team. Michael can be reached directly at 240-499-3808 or by email. You can also read his blogs, follow him on Twitter, or network with Michael from his social media page on insideARM.com.