There is an old Jewish proverb: “Don’t muzzle the ox that treads the corn”.
Although the meaning might be obscure, a little reflection on this adage yields its wisdom: do not shortchange a key component of your endeavor’s success.
Sure, the farmer was the “brains of the operation”, but he desperately needed the skills and abilities of the brawny ox to pull the plow. And a well-fed ox was properly fueled to sweat, and pull, and work harder to bring in a bigger yield. Conversely, a hungry ox would eventually help produce smaller yield, and results in a hungry farmer and his hungry family.
This is a great metaphor for the repossession industry’s interaction with their clients.
Listen, I talk with tons of repossessors every day. All day long. And what I hear is interesting.
An agent might say “this client doesn’t pay very well, so I work their assignments as filler work”. Or “these are contingent accounts, so I only work them when I’m in the area”. Or, “this client sends me crap work, so I don’t devote much effort to ’em”.
In the repossessor’s mind, this makes perfect sense.
But if these accounts actually represented a bunch of $8,000 cars owned by a client, would this client want their accounts viewed as “filler work”? Are you kidding me?
Why is this happening? It is based on the assumption that we’re a lot more stupid than we actually are. Some clients believe that most repossessors lack the business acumen to balance a checkbook, and somehow the repossessor will invest herculean efforts on accounts that might produce zero gain.
Come to think of it, what business person…even one with modest business skills….would do that for any length of time? None would. Would plumbers or landscapers or construction workers show up for work if they knew they were only going to get paid for a fraction of their hours, based on factors entirely out of their control?
None would. None do.
Repossession clients will defend themselves by saying “we only pay for results”.
The repossessor can say “checking a bad address you provided is a result”.
Why does any one of us think we can escape conventional wisdom? That somehow old maxims like “you get what you pay for” don’t apply in the parallel universe of a collection department?
This system of assigning repossession work on a contingent (or low-pay) basis is starting to show its cracks, by producing low recovery ratios that are being noticed and documented.
Low recovery ratios can be tied to poor performance by field agents…..and poor performance can be tied to poor (or stupid) incentive strategies. Like the Yiddish proverb, you have to properly feed a key component to your success.
Repossessors are not going to invest money (fuel, time, energy) into working accounts that won’t yield any reward. They are a lot smarter than you might think.
And even an ox knows when it is working hard, and not getting fed. But really at the end, it is not just the ox that goes hungry.
It’s that simple.