Everything is timing.
In July 1962, a French explorer named Michel Siffre buried himself in a cave under a glacier for two months. More than 100 meters below ground, several degrees below freezing and confined to a tent, the 23-year-old geologist’s sense of time soon unravelled. Without the markers with which the rest of us use to keep track of our lives – clocks, sunrise and sunset, weekdays and weekends, birthdays, seasons, holidays, etc. he grew disoriented. Hours seemed to pass in seconds, then minutes would stretch into hours; sometimes, most confusingly, both would seem to happen at once.
A few weeks into his caveman experiment, he was shocked to receive a message from the surface, summoning him back to civilization a month early. Except it wasn’t a month early. It was September. Two months had passed in what felt like only a few weeks. You couldn’t ask for a more distinct reminder of how badly we need “temporal landmarks” to give life structure and keep us sane.
These landmarks exert subtle influences on us, and really matter. Build more of them into your life or pay more attention to existing ones and life becomes more meaningful. Author Daniel Pink in his latest book,When: The Scientific Secrets of Perfect Timing says,
“I used to believe that midpoints didn’t matter—mostly because I was oblivious to their very existence. Now I believe that midpoints illustrate something very fundamental about how people behave and how the world works. Yes, I didn’t even know midpoints were a thing until I started this research. But what’s clear is that midpoints can have two distinct effects. They can bring us down or they can fire us up.”
As we find ourselves at the temporal landmark and midpoint of 2018, is our outlook grim or does our industry finally have some good news to talk about?
Grim or Good News?
Consumer debt continues to rise
Nasdaq.com mentioned that consumer debt in the US is rising at an “alarming” pace. Credit card debt had reached an all-time high of $1.023 trillion. Student loans have become the largest source of household debt outside of mortgages. And the student loan delinquency rate is 11.2%. Americans owe $1.1 trillion in auto loans.
Charge-off rates declined from an all-time high of 16.3% in 2010 to 4.3% in 2016 and the percentage of credit grantors working with third-party contingency collectors continues to be a viable recovery option. In spite of this debt collection industry revenue has declined from $13.3 billion in 2012 to $11.4 billion in 2016.
With more debt to collect than ever before why is less being recovered?
Lower recoveries are often attributed to the ever increasing regulatory pressures. Governance including the FDCPA and TCPA that were enacted before much of today’s technology was even dreamed about, including email, SMS text, the internet, and cell phones.
Recovery rates are also impacted with changes in how consumers interact. Telephone calls and letters, the typical standards in the ARM industry, are not how modern consumers want to be approached. It’s easier than ever to block phone calls, or have your contact effort mislabeled as a robocall. The majority of consumers no longer have landlines and use their preferred method of communication in a way and at a time that suits them.
The average internet user now spends more than two hours a day on social media and messaging services. All consumers are spending more and more time online, and millennials, the largest demographic in debt today, spend an average of over three and a half hours each day on their mobile devices.
Despite a growing regulatory pressure matched by increasing consumer demand, growth in the ARM space is on everyone’s mind. A recent AccountsRecovery.net survey sponsored by DAKCS asked industry professionals questions about business growth, collection recovery, and incredibly low unemployment rates. See the Employee Performance Survey Results and where the industry is headed so far this year.
What does the next half of 2018 hold in store for your business?
Things to consider at this midpoint landmark
This yearly midpoint is a good time to evaluate performance goals for 2018 and to review options available to enhance or grow your business. Have you examined your processes?
DAKCS is offering a health check initiative to assist our customers in looking under the hood at processes and workflow to make sure these tactics remain relevant with the shift occurring in the market. Automation drives our world, and the technology makes it very easy to “set it and forget it”. A periodic review can yield amazing results.
Another consideration may be expansion through diversification. In a recent article in ACA’s Collector magazine, Anne Rosso May discusses diversification as a way to “fast track” your organization by adding new lines of business. This informative article provides insight into protecting you from “one market” volatility by looking at different market segments.
Whether you are optimistic about the future of our industry or not, take a moment to recognize and celebrate this temporal landmark. Thinking about the opportunities happening all around us should fire you up and prepare you to make the most of the second half of 2018.
DAKCS Software Systems is an industry leader in simplifying the process of collections and accounts receivable management. By creating highly configurable, powerful, innovative cloud and on-premise software solutions, DAKCS offers a way to run your business faster and more efficient. For over 35 years, DAKCS has delivered on service, automation, and flexibility in one central collection software platform for all types of business.
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