Charles Miller was building a brand new accounts-receivable department at Telus Corp. when he had a brainwave: what if the company were to create a dedicated database to learn more about delinquent clients? Instead of just cajolling and compelling late payers, it could try to understand their problems and, perhaps, collect more money overall.
But Telus preferred to focus on data relating to sales and customer service, not receivables. Miller decided the best way to prove his theory was to start his own firm specializing in kinder, smarter collecting. Five years later, RecoverCorp Inc. is a poster child for the value of customized databases. And, with his growing emphasis on measuring staff activities and setting quantitative performance targets, Miller is proving that data mining — properly understood and used — is a key profit tool for businesses of all stripes.
RecoverCorp has devised a consumer-rating system based mainly on generally available customer data such as credit scores, previous aliases and bankruptcies. It uses this to review a client’s list of customers and predict who is most likely to pay up. The best bets get a full-court press of reminder notes and calls, while the hard cases may just get a single warning letter. “I can now take 100,000 accounts and know which ones are most likely to pay,” says Miller. “I can focus most of my efforts on them, whereas my competitors are calling everyone.”
Taking the time to understand customer behaviour has other uses. RecoverCorp sees its mission as not just to collect but to help clients retain laggard payers as customers. That may mean accepting long payback terms or silently swallowing outrageous excuses. Rather than harangue late payers, says Miller, “I want to rehabilitate the customers who do have money.” The results are tangible. RecoverCorp has made the PROFIT HOT 50 as one of Canada’s Emerging Growth Companies two years in a row.
Consumer behaviour isn’t the only metric RecoverCorp tracks. Miller and his partner Lyle Roda give staff specific performance targets for all revenue-producing tasks, and obsessively measure their progress. “People will do not what you expect, but what you inspect,” says Miller.
To help sales staff meet annual quotas, RecoverCorp tracks how many cold calls they make a day. Miller and Roda handled sales in the early days (Miller took the phone book from A to M, Roda from N to Z), so they know it takes 100 calls to land a new customer. They use their phone system to monitor whether sales staff make all the calls they should. They also track admin staff: customer-service reps must call clients regularly to make sure they’re happy, and support staff have strict turnaround times for processing returned mail, so debtors who have moved aren’t mailed a second time.
If this sounds too Big Brotherish for you, think again, says Miller: “People want to impress you. And they like to have the feeling that they’re accomplishing something every day.” He admits the system is hard to implement, and many targets may just be guesses. But it’s become an essential budgeting and goal-setting tool: “You really know your business and what makes it tick.”
Having just secured provincial approvals to operate across Canada, Miller believes RecoverCorp can become a national player, buying up rivals simply because it can collect debts more efficiently. Investing in data and pushing for better performance makes the difference, he says: “People who don’t try new things are people who don’t succeed.”