Recovery Survey: Repossession by the Numbers
ATLANTA — Auto Auction Services Corp. recently hosted a focus group for the repossession industry, inviting recovery agency managers to give their feedback about how they run their businesses, and what they need to continue serving lending institutions and other clients competitively.
This candid feedback session last October occurred on the heels of a nationwide recovery industry survey administered by AASC.
The nearly 100 survey respondents reported an average 200 repossessions per month and 37 regular clients. Most agencies have between six and 25 employees and run a business that is over 10 years old. Unique as they may be, repossession agencies are facing many of the same economic and business issues affecting most companies.
Despite media hype about the recession driving up repo volume, many agencies are struggling to secure new business and keep costs down as the industry becomes more competitive. "Managing client expectations" rounded out the top three business challenges facing repo companies.
|Top Challenges Repo Agencies Face|
|Getting New Work||55|
|Managing Client Expectations||52|
|Organizing and Filing Paperwork||14|
|Complying with Law||8|
|Source: AutoIMS Survey|
21st Century Repossession Management
Just as repossession agency field practices continue to evolve (new and better towing equipment, license plate recognition, GPS, etc.), the wheels of change keep turning in the home office as well. Agents know that second only to finding cars quickly and inexpensively, the most important thing they can do to make clients happy is communicate — frequently.
A number of repo management systems exist to facilitate the exchange of information from agent to client about assignments, recovery status, debtor information, vehicle condition and more. And 84 percent of agents indicated a preference to use these systems over more traditional methods.
|Preferred Method to Receive Assignments|
|Online Repo Management System||84|
|Customized Web Form||14|
|Source: AutoIMS Survey|
Despite the available technology, 85 percent of agents said they still receive a portion of assignments via facsimile and phone, citing client-driven processes and reluctance to change. Equally interesting, of those respondents who indicated they already receive assignments via an online repossession system (93 percent), on average, they use three separate, unlinked systems, which demonstrates:
—Agencies are actively embracing new back-office technologies and have the office staff and clerical ability to do so.
—Agencies will adopt new systems, thus sacrificing the simplicity and cost benefits of standardizing on one system, if the new system will open doors to additional business
Still, agents hold strong opinions about the advantages and disadvantages of various repo management systems. They value systems that are intuitive and easy to use, allow them to receive input quickly about assignments from clients, and enable them to submit key assignment information, like a condition report or status update, to clients over the Web.
Repossession clients should take note that the "two guys, a tow truck and a fax machine" business model is now the exception rather than the rule in the recovery industry. Successful agencies are more competitive due to their use of technology in the field and in the home office.
Not too many business relationships exist like that of the recovery agent and the financial institutions that compose their client base. While agents and clients alike build their businesses largely on professionalism, the manifestation of professionalism for a repo agent is usually very different than that of a lending institution.
Shared technology platforms that can balance the business models and bridge the culture gap between agency and client will be highly prized in both types of organization, especially as repossession efficiency continues to grow in importance for lender success.
Clients of recovery agents should recognize that mature agencies are embracing new technologies and processes in an effort to earn business in an increasingly competitive marketplace. For the sake of consistency and efficiency, clients should consider simple changes and accommodations to make life easier for the recovery agents they use — especially those they consider high performers. For instance:
—Seek input from your top agencies about their preferred repo management system, and consider this input carefully when choosing a system to meet your needs.
—Look for opportunities to remove unnecessary manual data entry, paper-driven processes and other inefficiencies that lead to more errors and lost productivity.
—Outline very clear expectations for your recovery agencies about frequency and method of communications, how performance will be measured and what they can do to ensure your satisfaction. Work with agencies early on to ensure that systems and processes exist to help you both succeed.
Likewise, repossession agents have an opportunity to recognize the processes and technologies that work best for top clients, and make an effort to share those best practices with other clients, thus driving higher quality interactions across the industry. Examples include:
—Help educate clients about best of breed repo management software in order to reduce the number of systems in use, thereby driving simplicity.
—Find ways to rely less on error-prone, paper-driven processes. Instead, take the time to embrace available technology — such as the full functionality of repo management software, or integrated accounting tools — to help boost productivity over time.
The full research report is available at www.recoveryims.com/external/repoResearch.jsp.