Debtfree Magazine October 2016

There are two kinds of strategies in life and in business: ‘Plugging Holes and
‘Addressing Levers’
The ‘Plugging Holes’ strategy is reactive. It is a temporary fix that doesn’t address
the systemic issue, which is the mismanagement of our water resources by both
government and consumers. It plugs the hole, obscures the facts and doesn’t
address the real issue of ‘water scarcity’.
The ‘Addressing Levers’ strategy is about resource optimisation, implementing
projects and plans ahead of time, putting in place projects that will harness the most
out of the existing environment. It’s building the catchment tank for rainwater,
recycling grey water, and planting indigenous gardens that require less watering.
There are three important ‘levers’ in the debt counselling (DC) business environment
that are not given the attention they deserve; Client Conversion, Client Retention
and Client Churn.
Converting applicants into paying clients is not easy. However, the benefit of
increasing your conversion rate is substantial. The National Payment Distribution
Agency (NPDA) defines Conversion “as the number of debt review applicants
who make their first payment within three months from the date of application.”
Optmising and converting the number of clients that apply for debt review should
get as much attention if not more than looking for ways to attract new business.
Client Retention and Client Churn are essentially two sides of the same coin. Client
Retention can be measured as the number of clients that continue to make regular
monthly payments. Client Churn is the number of clients who stop making regular
monthly payments.
Part of the reason why debt counsellors don’t address these ‘levers’ is because they
don’t measure them. What is not measured cannot be managed.
Instead, the ‘loss of clients’ that inevitably results from the poor management of
the conversion, retention and churn levers is plugged with advertising campaigns