Do you sometimes feel that your AR team is always playing catch-up with collections instead of using data to drive collections?

It could be that you need a better understanding of what KPIs drive collections, and how the way your AR team interacts with customers impacts your collection KPIs.

Your AR team can impact behavior which is in their control such as:

  • Ensuring deliverability
  • Guiding customer actions
  • Awareness of key dates

But, they cannot impact behavior outside their control such as:

  • Customer bank balances
  • CFO controls
  • CxO controls

The key is to understand how your AR team should interact with customers to influence their behavior in ways which will improve your collection KPIs.

A/B TESTING

A/B testing is used in the data-driven approach to influencing customer behavior and collection KPIs. It is based on the premise that the way in which your team interacts with customers can change their behavior and improve collection KPIs. This can be expressed in terms of three questions:

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

Remembering that you can only impact behavior you can influence, consider the following two sets of behavior you can influence.

PAYMENT BEHAVIOR

  • Timing
  • Method

PORTAL ADOPTION

  • Payment
  • Disputes
  • Promise-to-pay
  • Statements

A/B testing is the methodology to determine which behavior will have the most beneficial impact on your collection KPIs and what interactions your AR team should use to influence customer behavior. A/B testing is comparing two or more versions of something to see which one performs best.

A/B testing is applied through three steps:

  • Build
  • Measure
  • Learn

For example, Sequences have lots of levers for testing.

  • Sequence steps
  • Communication templates
  • Targeting rules
  • Channels

BUILD

Build different Calls-to-Action

  • Combination – Should promise-to-pay request also include a pay now?
  • Channel – What works via text versus small voice recorded message?

Build different order of steps

  • Number – Is one upcoming reminder enough or does two work better?
  • Types – Does an account verification help?
  • Manual – Does personal contact make a difference?

Build different rules

  • Customer – What works better for different customer segments
  • Invoice – What works better for small versus large invoice amounts?
  • Frequency – What interval should be used on past due accounts?

Build different timing

  • Time-of-day – Contact first thing or later in the day?
  • Aging – Does a reminder work better 2 or 3 days before due date?
  • Frequency – What is best interval for past due notices?

Build different messages

  • Subject line – “Is it something I said?”
  • Visuals – Do buttons work or just plain text?
  • Content – What supporting content helps?

MEASURE

  • Select sub-segment to test with
  • Place sub-segment into new sequence
  • Compare behavior between sequences
    • Payments
    • Portal adoption

LEARN

  • Determine the winner
  • Roll-out to customer base

A/B testing can help you have data driven collections. The way to get started is:

  • Start with KPIs
  • Develop hypothesis of interaction which influences customer behavior
  • 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 your company with the A/B testing needed for data driven collections.