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Increase in payments and reduced costs following collections process improvements

Increase in payments and reduced costs following collections process improvements

“Working with the Arum team, we have been able to ignite our digital collections strategy.  The nudge campaigns implemented in 2020 allowed the council to achieve its cash objective while creating opportunities for the borough’s most vulnerable to be supported too. The Arum team bring a wealth of debt collection expertise to the public sector, and I look forward to working on new projects together in the future.”

Head of Revenues, London Borough of Redbridge



The
challenge

Following an assessment of the London Borough of Redbridge (LBR) revenue collections capabilities, Arum identified several opportunities for improvement within the Council Tax processes, with a key focus on targeting effort towards collections activity whilst providing improved business intelligence for management to better monitor, manage and control outcomes.

LBR had invested in digital channel technology but was not realising the expected benefit. The channel technology was fit for purpose but had not been implemented to its full capability with limited reporting on performance.

The solution

Well versed in the use of digital channels, Arum conducted a rapid assessment of the channels available, as well as the existing contact strategies. We quickly recognised that the contact strategies were not fit for purpose and there was some hesitancy about increasing volume down the new digital channels.

There was a lack of data driven segmentation and the whole execution of the contact strategy required improvements around calling windows, frequencies leading to a council defined end to end strategy, linked to the statutory processes.

Therefore, we:

  • Created new campaigns for new customer segments based on already available data, utilising new digital channels focused on self-serve capabilities
  • Implemented a champion / channel framework to enable rapid testing of new strategies
  • Overhauled the frequency, timing and duration of the strategy windows and delivered an end-to-end contact strategy
  • Established calling lists out of contact strategies based on resident behaviour
  • Established new Key Performance Indicators regarding channel success rate

Introduced new reporting based on those residents in arrears versus the whole revenue portfolio.

The results

LBR observed a rapid impact on results, with marked improvements in customer engagement, cash collected and return on investment of the channel technology.

The percentage improvements below are based on performance improvements over the traditional strategy:

  • Campaign payments increased 60% - the percentage of payments to the campaign value increased from 28% (baseline) to currently 45%, with payments from residents outside of campaign at 18%
  • Channel costs / payments at a ratio of £1:£518
  • LBR moved into the Upper Quartile performance for London Authorities for Council Tax collection rates (Full Year 2020/21), following Second Quartile performance in the previous 20 years
  • Response to COVID-19 campaigns resulted in:
    • Faster referral to an agent compared to the customer calling an inbound number, with many expressions of relief for the contact
    • Better customer engagement based on their preferred mode of contact

Find out more about Arum's collections review offerings

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