11 Tips to Collection Letter Success

In an era of stringent regulations, shrinking margins and an economy still struggling to recover, you must find incremental ways to increase revenue while mitigating risk. While not a silver bullet, consider these 11 strategies to ensure collection letter success in 2011:

1. Use New Products, Formats and Design
   The collection letter industry continues to develop new products and formats. New product formats are novel, creative and draw greater responsible party interest and response. Some verticals benefit from intentional graphic design that extends the customer or patient experience while driving revenue. Other products, such as self-mailers, enable you to fulfill legal obligations at a lower cost. By including these products and formats in your collection letter strategy you can increase responses, revenue and reduce costs.
2. Suppress Undeliverable Mail BEFORE The Print Process
   Printing and mailing a letter that cannot be delivered is simply a waste of money. Your money. A more successful approach is to suppress undeliverable mail before it is even printed. This is possible using a combination of data services that standardizes all addresses as well as identifies new addresses, moved left no forwards, undeliverable as addressed letters and more. Once an undeliverable address is identified, your organization can determine the next most appropriate strategy – whether to skiptrace, return the account or take other action. This strategy will enable you to lower your costs without impacting performance.
3. Combine Letters to a Single Responsible Party
   If multiple letters are to be mailed to a single responsible party, common sense suggests combining them in a single envelope. By working with your letter vendor, you can do this, eliminating the cost of additional postage. You will be charged a small fee to print the letter but the saved cost of the additional postage goes straight to your bottom line.
4. Use E-Mail
   While not without controversy, e-mail is becoming more accepted as a method to correspond with responsible parties. The obvious benefit is the tremendous cost savings. But to minimize the potential for lawsuits, your organization should seek an e-mail provider with significant ARM industry expertise. Specifically, you need a provider who can push the collection letter as an encrypted PDF with a shared password to prevent third-party disclosure. You also can include a link to your online payment portal, enabling immediate payments. The ability to monitor e-mail bounces and unopened communication should be work flowed to automatically send a printed letter through the USPS if the e-mail is not opened. Of course, you should consult your attorney before beginning any collection communication through e-mail. But for those take the plunge, the results can be outstanding – improved revenue and dramatically lower collection letter costs.
5. Verify Security Protocol
   Over the past 24 months, security requirements and expectations for the ARM industry have increased dramatically. Sufficient security procedures even just 18 months ago are unacceptable today. Prudent organizations are auditing both their own security measures, as well as their partners’ measures in light of these far more stringent standards.
   
   Becoming knowledgeable about applicable security requirements may feel like a bottomless bowl of alphabet soup – PCI DSS, FISMA, HIPPA/HITECH, ISO 27002 to name a few. But it is important to thoroughly understand what is expected of you and your partners. Act as though your business depends on it – because it does!
   
   Just as important are reading your partners’ security-related audits and reports. While none are likely to land on a best sellers’ list, they can reveal critical vulnerabilities that may not be discovered otherwise.
   
   If your partnership is long-term, and you are not aware of any significant security initiatives or upgrades in the past 18 months, it is quite possible your partner no longer meets applicable regulations and expectations. As stated earlier, the bar been moved dramatically higher of late and it has required significant effort on the part of those who have risen to meet the challenge.
6. Verify Collection Industry Expertise and Compliance
   It’s a given that the collection industry is a complex, highly regulated industry where any lettering mistake is a potential lawsuit. To mitigate the inherent risks associated with your collection letters, it is important to select a partner with the necessary expertise to ensure compliance in regards to letter design, paper stock selection as well as required verbiage. Your letter vendor must have processes and systems that automatically maintain state and federal compliance even if the responsible party’s address is updated. Choosing a letter partner with collection industry expertise will reduce your risks, providing an additional layer of protection to ensure your lettering efforts remain compliant.
7. Audit Quality Protocol
   Given the business realities of high letter volumes and stringent regulations, even a very low defect rate will allow the occasional error to occur. Since many errors are a potential law suit, your success depends on selecting a partner with a formal, rigorous quality process. Many companies, across multiple industries including ARM, have found Six Sigma to be an outstanding quality process. Championed at Motorola, Six Sigma is a world-renown quality control process. The foundation of the Six Sigma process is that all errors have a root cause, that when addressed enables the organization to implement procedures to prevent the error from occurring again. Whatever the quality protocol used, it should be directed by a dedicated senior executive trained in the methodology. Auditing your partners’ quality protocol will ensure it is actively preventing errors, thus reducing your legal risks.
8. Outsource Return Mail
   Return mail often contains actionable information you need to quickly contact responsible parties. When return mail isn’t processed appropriately, many organizations send another letter to the same bad address when the updated information is sitting in their office. But the hectic pace of business inside every organization can make it difficult to sort return mail and input crucial information in a timely manner.
   
   Organizations that struggle to input return mail should consider using the Address Correction Service from the USPS and an automated return mail processing center. Utilizing the ACS service and having your return mail scanned, processed and returned electronically the same day as received will have a positive effect on your letter strategies and your mailing costs.
9. Use Reporting to Drive Strategy
   Your letter partner can provide you with a significant amount of valuable, actionable data. Reports by client can help you track what you are spending on each account. Reports by letter type can track performance, allowing you to make adjustments to emulate your most successful letter types. You should have a two-way information flow with your letter partner. Acting upon the data provided by your partner will increase your collection letter success.
10. Complete an ‘Annual Physical’ with your Letter Partner
    With the pace of daily business, no one expects you to spend all of your time thinking about lettering strategy. The good news is that your letter partner is continually thinking about how to improve your letter results while mitigating your risk. As a result, new products, services, strategies and best practices evolve continually. If you have not reviewed each aspect of your letter strategy and practices in the past 12 months, it is time to schedule a meeting with your letter partner. Examine your partner’s complete product and services offering to uncover anything that might be of value to your organization. Examine your monthly invoice line-by-line with your partner to consider ways to reduce your monthly spend while increasing your results. While you can’t spend all your waking hours thinking about collection letters, investing a little time once a year will pay exceptional dividends.
11. Continue to Educate Your Partner
    No one understands your business like you. And no other business runs exactly like yours. So it is up to you to ensure your letter partner understands the nuances of your business and how they can better help you succeed. Send your letter partner a copy of your newsletter, visit with your representative on a regular basis to inform them of your goals and strategies as well as build a relationship with your points of contact. This will enable your partner to provide the best service possible as well as have their product offerings match your business strategies and needs.

 Implementing these strategies will improve the results you experience from your collection letters.