You can achieve your collection KPIs, if you understand how your AR team engages your customers influences their behavior. Carefully crafted collection procedures based on data driven analysis of customer behavior will increase your collections and operating efficiency. You can base your collection procedures on data driven analysis by A/B testing the customer behaviors you think will impact your KPIs.
A/B testing compares two or more versions of something to see which works best. A/B testing is based on the premise that the way you’re team engages customers can influence their behavior. This premise can be expressed in terms of three questions:
- What collection KPIs do you want to change?
- What change in customer behavior do you need?
- How can your AR team impact customer behavior?
5 CUSTOMER BEHAVIORS
There are 5 customer behaviors your AR team should be A/B testing to improve your collection KPIs.
CHANNELS OF COMMUNICATION
Which channel is more effective in reaching your customer?
TIMING OF COMMUNICATION
Which time of day is best to reach your customer?
FREQUENCY OF COMMUNICATION
How often should reminders be sent?
Does your AR portal accelerate payments?
TYPES OF MESSAGES
Which type of message is more effective.
A/B testing is applied through three steps:
BUILD THE COMPARISONS YOU WANT TO TEST
- Channels of communication – Are customers you text easier to reach than those you email?
- Timing of communications – Are you more successful contacting customers in the morning versus the afternoon.
- Frequency of communications – Is one reminder of an upcoming due date better than two reminders?
- Payment methods – Do customers using your AR portal pay sooner than those who don’t use it?
- Types of messages – Are messages with buttons more effective than plain text messages?
MEASURE THE COMPARISONS
Measure the comparisons you want to test by selecting test groups from within a similar business sub-segment. For example, in the case of payment methods select one group of accounts to use your AR portal and another group to use alternative payment methods.
Run the test for a representative length of time so that you have enough data to make a well supported decision.
Compare the behavior of the accounts who use your AR portal to those who don’t. An AR portal should result in improved collection KPIs because of the advantages it offers your customers.
- Select the winner for each test
- Roll out the change to your customer base. In the case of the AR portal, make it available to your customer base.
Data driven collections based on A/B testing will help to achieve collection KPIs and improve collection processes. The way to get started is to speak with a software partner experienced in A/B testing.
Lockstep Collect is a market leader in cloud-based credit and collection platforms. Lockstep Collect can help you with the A/B testing needed for data driven collections.
If you would like to learn more about how you can benefit from data driven collections, please contact Lockstep Collect at www.anytimecollect.com.