<\/a>As we all know the state of the repossession industry has changed drastically in the last few years.\u00a0 What was once a very lucrative industry for all who ran their businesses well has become one of distrust and infighting that is seeing costs rise and revenues plummet.\u00a0\u00a0 In the past, the relationship was lender-to-agent, today the relationship is lender-to-forwarder-to skip company-to-agent, or some variation.\u00a0 This has translated to a highly competitive arena that does not allow much room for movement, and has bred a sense of discourse across all levels of the industry.<\/p>\n

We have all read the articles, attended the trade shows, and spoken with peers who share similar lines of thinking that someone is to blame for this downward spiral from which nobody can seem to pull out of.\u00a0 We all have opinions as to who may be responsible, and we all have opinions on how to combat them.\u00a0 But, ultimately, who is to blame?\u00a0 What if I told you that it was you, the agency owner?\u00a0 \u00a0Would you think I was some guy who was trying to pile on what is already a bad day?\u00a0 Then, what if I told you it may not be your fault?\u00a0 Would you ask me why?<\/p>\n

Now before I possibly offend you to the point where you stop reading, let me say that by the end I hope to get you thinking about your industry from a slightly different perspective.\u00a0 If I accomplish that, then I will have been successful.<\/p>\n

So, let\u2019s start with the elephant in the room, the forwarders.\u00a0 Every agent who is street level cringes to some degree when they accept an assignment from any forwarder.\u00a0 Sure, there are some forwarding companies that just cater to the banks and seem not to care what happens in the field. There are others that do a good job of working with both their clients and their agents.\u00a0 Of course speaking as an agency owner we would all like to see forwarders just go away.\u00a0 Well, folks, I will tell you that forwarders in whatever capacity are here to stay.\u00a0 They provide a service to lenders that is unique and attractive and therefore will be around for a long time.\u00a0 So are they the bad guy because they provide a service that others seem to need?<\/p>\n

Now let\u2019s look at the lenders themselves.\u00a0 In the past, lenders would have a direct relationship with agency owners.\u00a0 Agents were able to develop a rapport with certain collectors, and as long as they performed, they had a mutually beneficial business relationship that would last years or longer.\u00a0 Well the problem was that large lenders needed a large staff to oversee a nationwide collection and repossession operation. That was a massively expensive effort.\u00a0 Along came forwarders, which convinced lenders they could outsource much of their collection and repossession operation through their company for the same prices they were paying for repossessions while also reducing the number of staff needed to manage that process across their lending footprint.\u00a0 This was, and remains, a can\u2019t-lose scenario because in this case, savings equal profits.\u00a0 So are lenders the bad guy because they want to control costs in what was a money-sucking department?<\/p>\n

What does that leave us with?\u00a0 Ourselves, the agents. The agents are the ones at the bottom of this totem pole.\u00a0 The ones with the greatest risk <\/a>physically and financially. The ones who work around the clock with dirty hands.\u00a0 We love the cat-and-mouse game that is repossessions.\u00a0 We love being in the field and calling the driver\u2019s seat of our trucks our offices.\u00a0 It\u2019s what gives us purpose.\u00a0 That\u2019s why we get up every morning and keep fighting, despite how hard things are in the industry.\u00a0\u00a0 We perform a service that not many people can and most people wouldn\u2019t want to.\u00a0\u00a0 But, with all that being, said we are our own worst enemy.\u00a0 We are in fact the bad guy!<\/p>\n

What makes us the bad guy?\u00a0 In one word\u2026.EDUCATION.\u00a0 By this I\u2019m not talking about big name schools or fancy pieces of paper that cost tens of thousands of dollars to obtain.\u00a0 I\u2019m talking about basic knowledge in how YOUR business is truly doing.\u00a0\u00a0 Let me ask you one question that only you know the answer to.\u00a0 Are you truly profitable?<\/p>\n

I say these things because not long ago I was that guy who used to think \u201cI\u2019m picking up cars, I invoiced X amount of dollars this month. My bills are paid. I\u2019m profitable.\u201d\u00a0 But month after month, I kept wondering why I wasn\u2019t building any savings, why I was just barely staying afloat.\u00a0 So I started doing some homework and with the help of people that had my best interests in mind, I began to receive that very education that I didn\u2019t know I needed.<\/p>\n

Let\u2019s face facts, we are repossessors, not doctors or lawyers or accountants.\u00a0 We do a difficult job and manage our finances the best way we know how.\u00a0 Some of us are more diligent than others. Some have a better understanding than others, but for the most part, we are who we are.\u00a0 This leads me to the bad guy part.\u00a0 We are so worried about volume and picking up as many cars as we can that we lose sight of the fact that we could be costing ourselves.\u00a0 Volume does not always equal profits.\u00a0 A lot of junk is still just junk.\u00a0 As an industry we have to learn that we can\u2019t just run whatever assignments we can get our hands on for whatever prices we can.\u00a0 If we can learn to be more selective with our accepting of assignments we will change the industry for the better.<\/p>\n

What if I told you that you could say NO and become profitable?\u00a0 Actually turn down work, and not worry about whether the guy down the street is doing it and rest easy that you made a good decision? \u00a0During my education process this was the hardest lesson I had to learn and I fought it kicking and screaming.\u00a0 What changed my thought process was to actually put pen to paper and, using a simple method, determine which clients were profitable for me and which weren\u2019t. I can tell you I was shocked to learn who were good clients and who weren\u2019t.\u00a0 If we truly understand our business and the costs of operating our businesses we would never have to worry about what Forwarder ABC was paying or how low a client reduced fees to because we would be able to say \u201cNo thank you.\u201d\u00a0 Let your competition accept that work and eventually they won\u2019t be your competition any longer.<\/p>\n

Now you\u2019re probably asking what is this formula that opened my eyes?\u00a0 First, let\u2019s start by figuring out what your average revenue per recovery. That\u2019s probably something that every one of us could rattle off in a matter of seconds – total revenue divided by total recoveries.\u00a0 Pretty easy, right?\u00a0 Let me give you a scenario: Client A pays $375 per recovery and Client B pays $325 and both assignments come in at the same time. \u00a0One would think that Client A\u2019s assignment would be worked first because the average per recovery for that client is higher.\u00a0 Well, that\u2019s where we all <\/a>make the mistake.\u00a0 Revenue per recovery should not be the cure all for determining whether someone is a good client.\u00a0 I have found that the best overall way of determining the profitability of a client is by calculating the average revenue by assignment — total revenue divided by total assignments.\u00a0 For every assignment that comes through your office, how much are you invoicing? Use this calculation for your entire business — total revenue divided by total assignments, and then determine the average revenue per assignment. Let\u2019s assume it\u2019s about $200. Then, use the same method for each client — total revenue per client divided by total assignments per client. Any client that falls under your overall average needs to be re-evaluated.\u00a0 \u00a0The best way to raise your average is to eliminate everyone under the company average. I am not suggesting to go and stop working for half of your client base.\u00a0 I am just giving you information that you can use in future negotiations.<\/p>\n

Of course there is more to this and something that I am willing to share to whomever would like to learn it.\u00a0 This is just a sample of the EDUCATION that can be used to make us all better business owners.\u00a0 I don\u2019t have all the answers and I am not pretending that I do.\u00a0 What I have is a thirst for knowledge and a drive to be the best I can be and not just survive, but to prosper.\u00a0 If we can all arm ourselves with the knowledge that we will be ok if we say NO to a client we don\u2019t want to do work for will we stop being the Bad Guy.<\/p>\n

Happy hunting, and stay safe out there!<\/p>\n

 <\/p>\n

Jeremy Cross<\/p>\n

International Recovery System<\/p>\n","protected":false},"excerpt":{"rendered":"

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