Is your AR team achieving collection goals? If it isn’t, it could be that the collection techniques they are using are not effective in influencing customer behavior. If you want to increase collections, you need to use actual collection data to determine which collection techniques are more effective in influencing customer behavior. Data driven collections will result in increased cash flow and more efficient collection processes.

A/B TESTING

A/B testing uses data to determine how your AR team should interact with customers to influence their behavior in ways which will improve your collection KPIs. A/B testing is based on the premise that the way you’re your team engages customers can change their behavior. This premise can be expressed in terms of three questions:

  • What collection KPI do you want to change?
  • What change in customer behavior do you need?
  • How can your AR team impact customer behavior?

Keep in mind that you can only impact behavior you can influence such as:

  • Ensuring deliverability
  • Guiding customer actions
  • Awareness of key dates
HOW TO A/B TEST IN THE ACCOUNTS RECEIVABLE DEPARTMENT

Consider the following two sets of customer behavior you can influence.

PAYMENT PRACTICES
  • Timing
  • Method
CUSTOMER SELF-SERVE PORTAL ADOPTION
  • Payment
  • Disputes
  • Promise-to-pay
  • Statements

You want to know based on actual collection data, whether trying to influence customer payment practices or customer use of your Connected Accounting portal will lead to improved collection KPIs.

A/B testing compares two or more versions of something to see which works best.

A/B testing is applied through three steps: build, measure and learn.

BUILD

Build the comparisons you need to test with collection data. In our case we want to test whether influencing customer payment practices or customer adoption of your Connected Accounting portal will lead to improved KPIs.

Customer payment practices to be tested could include:

  • Communication channels – Are text messages more effective than emails?
  • Frequency of contact – What is best interval for past due notices?
  • Timing of contact – Does a reminder work better 2 or 3 days before due date?
MEASURE
  • Select test groups from a similar business sub-segment. One group of accounts for testing the impact of changes in payment practices. The other for testing a group of accounts who adopt your portal.
  • Run the test
  • Compare behavior between test groups to see the impact on collection KPIs.
LEARN
  • Determine the winner
  • Roll out to 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 about supporting your testing.

Anytime Collect is a market leader in cloud-based credit and collection platforms. Anytime 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 Anytime Collect at www.anytimecollect.com.