The situation of the entire world today isn't great; people are losing their wealth due to unemployment, and businesses are going down. So, it has become quite difficult to collect debts from delinquent accounts. But, portfolio penetration is a great way to get money from any portfolio of accounts. The only problem with penetration is the high costs in the process. But you can surely work out some ways that will reduce the cost of penetration and yet give you the desired results when you consider
Portfolio penetration means that you have to work on the accounts that were ignored or were not given enough attention in the beginning, and this process will cost you the right amount of money. The costs for portfolio penetration include letter costs, scoring costs, and cost of phone calls made. To reduce your expenses, you can first score all your files in order to develop a work strategy for every segment of the delinquent accounts. An easy strategy is to score and then put those accounts into various buckets and then develop a strategy for each bucket according to their scores. This strategy should be based on the total cost you will incur in the collection process.
Therefore, the penetration process will be based on the cost that is spent. And basically, the reality is that the more you will spend on penetration, the more money you will be able to recover.
If you want to penetrate deeper into the accounts and get more money out of each bucket, you should focus on reducing the costs and getting more returns. The letter costs cannot be reduced, but you can make the letters to garner a response from the customers. You can place the font of the self-pay site on the letter in an appealing manner as it will increase the debtor's self-pay option and reduce costs for you.
Another high cost for penetration is the inbound and outbound call costs. You can easily collect from inbound expenses and also make the customers pay by sending them notification or through your agents. Moreover, you can hire less skilled professionals for work because it doesn't require a lot of skills. This can reduce a lot of your costs in the process.
Hence, the key to deeper penetration is the cost to carry out all the processes. Always look to reduce your costs as much as you can.
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