Champion v. Challenger

The best way we can prove ourselves is in a head to head competition against your existing skip agency(s). 
 
We believe competition is healthy, both for you, and for us. For this reason, we encourage you to let us compete in an Apples to Apples competition against the companies you currently utilize to work your skip accounts.

As an example, if you give us 100 files and you give your other skip agencies 100 files, and if all things are equal in terms of the distribution of the files, you should be able to use this test as a way to measure performance, and more importantly, cost.
 
When we say cost, we are not speaking just about price. Price is what we charge, and what our repo agent’s charge, to locate and repossess your collateral. Many times clients look at price as the determining factor in deciding who they use. As you can see by the example below, we believe clients should be more concerned with performance, and their greatest concern should be in regard to the overall cost. It takes a little more work to analyze the true cost of your skip agency, but as you can see below, when we ran the numbers on 200 assignments, 100 to each company, the difference to our clients bottom line was almost three hundred thousand dollars! 

Here is an actual Champion v Challenger results page from a contest we recently performed:

The first category is Positive Resolution. We believe you will agree that when you assign an account to a skip agency, it is a positive resolution when an account is either paid off, paid current or repossessed. 


A. Find John Doe - Positive Resolution Ratio
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Assigned 100 files with a total net portfolio balance of $1,800,000 - of which all $1.8m is considered high risk

Repossessed                     45
Paid current/off                  30
Unable to locate                25

Total Positive Resolution -   75 = 75% positive resolution ratio


B. Find John Doe - Price
-------------------------------------
FJD Investigation Fees on 75 accounts billed
= $26,250 (Average $350 per acct)

Outside Repo Agency Expense on 45 repo's
= $15,750 (Average $350 per acct)

Total Fee's (Price) = $42,000 to resolve 75 accounts ($560 average per acct, or 2% of assigned portfolio value)

 

C. Find John Doe - Overall True Cost
-------------------------------------------------
Total Fee's paid to resolve 75 accts =  $42,000

Deficiency balances charged off on accts repossessed =  $337,500
(45 repossessions x $7500 average charged off loss after sale of collateral)

25 accts charged off as unable to locate =  $450,000
(25 full charge offs at an average of $18,000 per account)

Overall True Cost on 100 files assigned =  $829,500
(46% of original net portfolio balance)

 

A. Company B - Positive Resolution Ratio
-----------------------------------------------------------------
Assigned 100 files with a total net portfolio balance of $1,800,000 - of which all $1.8m is considered high risk

Repossessed                     60
Paid current/off                  5
Unable to locate                35 

Total Positive Resolution - 65 = 65% positive resolution ratio

 

NOTE- As you can see, Company B resolved 65 of 100 files, a number that still isn't bad.  On the surface, this would seem fairly even, especially if our fees where in the same ballpark, however, the other company repossessed 60 versus the 45 we repossessed, and only 5 versus 30 were paid off or paid current. I believe you will agree that 5 out of 100 assignments is a much more common "recovery to paid percentage" in the skip industry than the 30 out of 100 who paid as a result of our ability to immediately contact them. Our experience shows that most skip companies repossess a majority of the skip accounts they resolve, with very few accounts paying current or paying off. This happens because many skip agents simply shotgun the accounts directly to local repossession agents, and in many cases, the local repo agent ends up locating and repossessing the collateral, even though your skip agent still charges you $350 for "their work". If you don't believe this, ask some of your local agents and they will verify this is not unusual. This is also a reason many repossession companies do not like to do work for skip tracing agencies. 

Now, lets see what happens with the rest of the numbers: 

 

B. Company B - Price
----------------------------------
Company B Investigation Fees on 65 accounts billed  = $22,750
(Average $350 per acct)

Outside Repo Agency Expense on 60 repo's = $21,000
(Average $350 per acct)

Total Fee's (Price) = $43,750 to resolve 65 accounts
($673 average per acct, or 3% of assigned portfolio value) 

From a price standpoint, the cost is comparable between the two companies, with Company B being slightly lower due to resolving ten less accounts. The largest difference is what happens to the Overall True Cost when your skip agency repossesses the majority of the accounts they resolve versus the way Find John Doe is able to contact the debtors sooner, allowing more customers the opportunity to come up with the payments, saving you a significant amount of money and expense. As you can see below, by using Find John Doe's proven track record for success, we can add value to your bottom line. 

 

C. Company B - Overall True Cost
----------------------------------------------------
Total Fee's paid to resolve 65 accounts = $43,750

Deficiency balances charged off on accts repossessed = $450,000
(60 repossessions x $7500 average charged off loss after sale of collateral)

35 accts charged off as unable to locate = $630,000
(35 full charge offs at an average of $18,000 per account)

Overall True cost on 100 files assigned = $1,123,750
(62% of original portfolio balance)

To make this a true Apples to Apples, Champion v Challenger competition, the client plugged in the same averages to both skip companies for the deficiency balance and complete skip charge off losses.

Savings to client from using Find John Doe in this example = $294,750! 
 
We encourage you to give us a try through our Champion v Challenger program. We’d be happy to help you set this up so its easy to manage, and so your skip companies do the majority of the measurements and reporting. In this example, we ran the contest for 90 days and we sent a weekly email to the client with our running statistics. We also attached an Excel spreadsheet with the specifics on each account to the email, allowing the client to audit our results. 
 
By giving our Champion v Challenger program a try, we are challenging you to challenge yourself. We believe if you do this once a year with your skip agents, you will be able to constantly improve your bottom line through head to head competition. For many clients, this program allows them to determine which skip agents earn the right to get first or second placements, and those clients with enough skip work to warrant utilizing a third skip placement company can also utilize this program as a way to identify new agents who are trying to earn their way into your skip assignment distribution program. 

 

 

 

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