Credit Management magazine October 2017

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OPINION What price loyalty? Should reputation and quality count for more than price in choosing a collections partner. AUTHOR – David Sheridan MCICM David Sheridan THE business of ‘debt collection’ has advanced considerably in recent years. The sector is virtually unrecognisable from two decades ago, with much higher levels of best-practice efficacy and ethical standards, and a real focus on creating fair customer outcomes and a sincere intent to help customers get back in control of their financial future. What hasn’t advanced to the same extent, however, is how agencies are remunerated; the ‘traditional’ services fee model has hardly changed, and in the main (with very limited exceptions) agencies can only recoup their costs through a model that is directly linked to commercial success. Of course, it is true to say that firms operate balanced scorecards to ensure commercial vigour is not at the cost of customer detriment, but companies don’t make money to cover their whole range of back office costs unless they perform commercially. In the context of mounting operational costs, and the ever-rising cost of compliance, it is little wonder that some firms have already thrown in the towel. Margins have been progressively squeezed as creditors seek to drive costs down further through scale and the use of intermediaries. Businesses need to make a profit, and yet profit has become something of a dirty word. The companies that have been squeezed the most are undoubtedly the smaller players. To this end, the warning bell should be sounding loudly. Smaller operators are often those providing niche services that are greatly valued by the clients they serve, and the larger firms with whom they collaborate. They have often acquired reputations for service excellence and built very strong, positive and trusting relationships with their clients. The type of relationship where client evolving needs are not measured in additional costs to the clients but delivered as part of the service. Recent experience, however, suggests that such skills and commitment to a long term, value-adding relationship are potentially being ignored in an unseemly race for the bottom in terms of cost. Regardless of the environment in which you operate, there will always be some businesses that will do anything to win a new contract, even if it means they will never break-even. Which is an interesting thought: when it comes to protecting a client’s reputation, and being assured that an agency will deliver fair outcomes, shouldn’t a proven track record and evident quality of service have a much stronger voice than price? Some business models claim to offer lower rates because they are cheaper/smarter in their operation, and to an extent this might be true. But do they deliver better returns? More likely they manage their costs better to make the same return, but I fail to believe that this leads to a better client (or indeed customer) experience. Long-term relationships are not born out of poor client or customer experience. They stem from creditors who work with their agencies on a ‘win/win’ basis, who accept that their agency needs to make profit, and are happy to see that profit re-invested into the business for the future. The Financial Conduct Authority (FCA) continues to push firms into embracing a customer-centric culture, and creditors must look for commercial deals that add value. But when that deal looks too good to be true, it probably is. Price alone should never be the deciding factor. It is reputation and quality that really count. The companies that have been squeezed the most are undoubtedly the smaller players. To this end, the warning bell should be sounding loudly. The Recognised Standard / www.cicm.com / October 2017 / PAGE 22
THE RECOGNISED STANDARD CICM British Credit Awards 2018 8 February 2017 Royal Lancaster, London Have you submitted your entries for the CICM British Credit Awards 2018? Entries close on Friday 27 October so don’t miss out on your chance to win one of the most prestigious awards in the industry. CICM is the largest recognised professional body in the world for the credit management community and is peerless in its field of expertise. Promoting best practice in credit and collections, CICM delivers resources, training and support to members at all levels, and offers a range of qualifications that are the recognised standard in the industry. The CICM British Credit Awards is central to our ethos, rewarding outstanding achievement and innovation shown by individuals and organisations. START YOUR ENTRIES TODAY! cicmbritishcreditawards.com SCAN HERE TO VIEW THE FULL LIST OF CATEGORIES AND CRITERIA ENTRIES CLOSE FRIDAY 27 OCTOBER AT 5PM! SPONSORS: PALADIN The Recognised Standard / www.cicm.com / October 2017 / PAGE 23
Page 1 and 2: CREDIT MANAGEMENT CM OCTOBER 2017
Page 3 and 4: OCTOBER 2017 www.cicm.com CONTENTS
Page 5 and 6: Notall credit collection systems ar
Page 7 and 8: NEWS IN BRIEF It's new visual ident
Page 9 and 10: Goldman Sachs to launch new consume
Page 11 and 12: INSOLVENCY Pre-packs - back on the
Page 13 and 14: For more information call 01206 322
Page 15 and 16: EDUCATION Visit CICMOS for personal
Page 17 and 18: THE CREDIT CONTROL RECRUITMENT SPEC
Page 19 and 20: VIEW FROM THE SEA FRONT AUTHOR - DA
Page 21: OURAML SOLUTION WILL HELPYOU SEAL T
Page 25 and 26: w HQ PROFILE - MEMBER ENGAGEMENT Su
Page 27 and 28: TRADE TALK The importance of Free T
Page 29 and 30: CURRENCY UK BREXIT GLOOM WE'RE not
Page 31 and 32: Who we are covering 96% of the worl
Page 33 and 34: COUNTRY FOCUS AUTHOR - ADAM BERNSTE
Page 35 and 36: THE B2B DEBT RECOVERY SPECIALISTS T
Page 37 and 38: OPINION AUTHOR - ADAM BERNSTEIN bec
Page 39 and 40: PAYMENT TRENDS Sector Sector Scotla
Page 41 and 42: OPINION Unintentional consequences
Page 43 and 44: LEGAL MATTERS compounded by ten per
Page 45 and 46: OPINION AUTHOR - CHRIS SANDERS that
Page 47 and 48: EDUCATION IN BRIEF: ABB is a pionee
Page 49 and 50: THE CICM MAGAZINE FOR CONSUMER AND
Page 51 and 52: OPINION How to make your CV stand o
Page 53 and 54: Proud supporters of CICMQ With over
Page 55 and 56: Stalemate -aposition counting as ad
Page 57 and 58: NEW CICM MEMBERS THE INSTITUTE WELC
Page 59 and 60: BRANCH NEWS 60SECONDS WITH FULL NAM
Page 61 and 62: SENIOR CREDIT CONTROLLER BUILD STRO
Page 63 and 64: Cr£ditWho? CICM Directory of Servi
Page 65 and 66: Cr£ditWho? CICM Directory of Servi
Page 67 and 68: Puzzle by © 2012 Mirroreyes Intern

Credit Management magazine October 2017

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