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Automating Collections with Lob's Print and Mail APIs
May 25, 2017

Automating Collections with Lob's Print and Mail APIs

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Nikil Balakrishnan

To help our customers actualize their vision, get to market more quickly, and minimize costs both in terms of development hours and dollar expense, Lob provides real-world infrastructure APIs. An upshot of providing APIs to abstract away operational complexities is that we help customers bring certain operations back in-house. A great example is collections.

Calling In a Collections Agency, Today

Pretty much every business has had its share of delinquent customers and heard its share of excuses. Businesses may find themselves sending invoices over and over again, making difficult collection calls and working out payment plans that go ignored. Collection agencies do the grunt work for you, convincing customers to pay with written notices and phone calls.

While this all may sound great, your customers might see collection agencies as contracted bullies. Although collection agency practices are regulated by the Fair Debt Collection Practices Act, credit collection agencies are often seen as harassers, rather than a positive source of debt solution.

Historically, when delinquent customers force the hiring of a collection agency, it constitutes a lose-lose for the company. Collection agencies usually charge a percentage of any collected invoice; they sometimes charge up to 50 percent of the paid amount. Collection agencies calculate their fees based on the age of the debt. In other words, the longer the invoice has gone unpaid, the greater the fee.

This effect, compounded over many delinquent customers, leads to the forfeiture of vast amounts of revenue to external parties. It can even damage the company’s reputation if collection agencies are especially forceful. Collection agencies happily take advantage of the fact that businesses would rather get back a portion of their money than none at all.

But what if the time required to generate and mail collection notices was drastically reduced? What if collections could be brought back in-house, timed to automated triggers, and made part of a more cohesive brand experience that makes customers less likely to become delinquent in the first place?

That's what can happen when businesses leverage Lob's suite of print and mail APIs.

Debt Collection In-house With Lob

By leveraging a technology platform that can automate the sending of collection letters, businesses can bring this revenue channel back in-house. They can control the messaging and designs presented to delinquent customers. Ultimately, they can try more creative ways to win over delinquent customers and have them pay their debts.

Bringing collections back in house has a multiplier effect on revenue for your company. Without having to pay third party collection agencies a percentage of your lost revenue that increases with the age of the debt, you can dramatically increase the ROI of time and money you spend on collection efforts. This is done while decreasing the time you spend slogging through customer comms.

Third party collection agencies use fear and bullying to win back lost invoices, with a high rate of failure. We advise companies to use brand messaging unified over the longer term. In our customers' experience, this can significantly increase conversion rates compared to typical collection agencies.

Getting Creative with Collections

Because Lob makes sending direct mail as easy as sending email, customers can integrate delinquency workflows into their lifecycle marketing. As opposed to moving delinquent customers into an entirely different segment, businesses can send notices far earlier. We encourage customers to tie triggers more intelligently to warning signs of delinquency, like delays in submitting payment information or attempts to quickly solicit more services while still in the payment window for the first service.

Lob customers can easily test different form factors (perhaps customers are more responsive to postcards than letters). They can even leverage omni-channel communications triggered off of delivery notifications, all through Lob’s print and mail APIs.

The question for businesses is: which would you prefer? You can forfeit a large percentage of whatever small amount comes back, over and over. Or you can be flexible, adaptable, and consistent with collections from the moment a customer shows signs of becoming delinquent. Presenting a consistent brand image to your customer, in a completely automated fashion, can mean the difference between recouping losses or just waving money goodbye.

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