Which KPIs should a collection agency track?

The KPIs, grouped by what they tell you

The formulas, and which denominator each one needs, are on how to calculate RPC rate, PTP rate and kept rate.

Reach is the dialer’s number, conversion is the floor’s

The groups answer different questions, and they are fixed by different people. Contact rates rise and fall with the dialer, the phone numbers on file and the time of day. Conversion and dollars per account contacted are where the collector on the call makes the difference. A month in which the floor reached more people can look like a better month for every collector, even when none of them converted better.

That is why it pays to read the groups separately. More right-party contacts or better conversion? sets out where each one comes from.

What a collector dashboard usually shows

One collections platform’s dashboard shows the usual set. Oracle’s banking collections documentation, for example, lists the key performance indicators on its collector dashboard: total contacts, accounts handled, right party contact rate, promise to pay rate, promise kept rate, collection liquidation rate (amount collected against amount assigned) and first call resolution. It shows them for a single collector, or for the whole team when a supervisor logs in.

That list covers reach, conversion and value, with first call resolution as a measure of how often one call settles an account. Quality sits elsewhere, in call review and complaint records, and belongs beside it.

Liquidation, read by placement month

A single recovery rate across the whole inventory blends fresh placements with ones that have been worked for months. Experian, which sells collections analytics, made the point in a 2012 post on agency performance: rather than recovery as a percentage of total inventory, performance is better read as liquidation for each batch of placements, compared on its liquidation curve.

In our reading, that means one line per placement month, showing what share of the placed dollars has come in after one month, two months, and so on. A new month can then be compared with earlier months at the same age, and a slow month shows up early instead of hiding inside the blend. We also use the same view to see when extra effort on a batch stops returning much. How to prioritise account inventory.

What clients score you on

Businesses that place accounts with more than one agency often score the agencies against each other. IC System, a collection agency, describes such a champion and challenger model (2023). In its example, collections are measured as dollars collected divided by dollars assigned, and separately from account audits against agreed work standards, reviews of a sample of each agency’s calls, and complaints. Its view is that compliance and call quality are often as important as recovery.

An agency that tracks the same numbers its clients use will see a change in its share coming before the client does. How debt buyers split placements between agencies.

The number most dashboards leave out

Dashboards tend to show each KPI for the floor and for each collector, and rarely the spread between collectors on the same kinds of accounts. In our view that spread can be wide, and it is not one ranking: a collector in the middle of the board overall can lead on one kind of account. A floor average hides that.

Reading conversion and dollars per account contacted by type of account and by collector shows where each collector does best. It is the starting point for giving each customer to the collector most likely to collect from that customer. Why collectors convert at different rates, and why not give your best collectors every account.

Keep the definitions still

A KPI is only useful if it means the same thing every month. Write down what counts as a right-party contact, which promises count as kept, how partial payments and reversals are treated, and which accounts are in each denominator. Then change a definition only on purpose, and restate the past months when you do.

The same goes for any change in how accounts are handed out. Measure it in dollars collected per account contacted, against a control group in the same weeks. What counts as success in collections, and how to prove a routing change worked.

Sources

• Oracle Banking Collections, key performance indicators: the KPI widget on Oracle’s collector dashboard, with a definition of each field.
• Best practices for improving agency performance: Experian, a collections analytics vendor, on reading agency performance by placement batch and liquidation curve (2012).
• Champion-Challenger Collections Model: IC System, a collection agency, on scoring agencies on collections, audits, call reviews and complaints (2023).