Improving Right Party Contact Rates at Outbound Call Centers

Consumer delinquencies are a major problem for banks and other credit card issuers. These firms have collection centers across the country to collect outstanding balances from delinquent accounts. Their main strategy is to first send reminder notices and, if that does not work, to telephone delinquent customers and request payment. The latter often becomes necessary, resulting in high costs of collection. Automated dialers are used to make the calls, and when the call goes through, it is directed to one of several hundred associates manning computer workstations. In this operation, it is important to contact the account holder in order to discuss payment options. Simply getting someone on the line is not sufficient, because such calls would require follow-up calls. The objective of efficient collections is to maximize dollars collected while minimizing costs, which generally translates to making a "right party contact (RPC)" in the minimum number of attempts. We developed and tested an algorithm that increased the RPC rates by over 10%. This increase translates to annual savings of several million dollars for an average credit card company. Although the focus of our paper is collections, the methodology developed is equally applicable for improving telemarketing efficiency.