There's an age old debate on which is the most effective way to skip trace an account. The old school method is to have a collector manually skip trace an account using resources and tools provided by the collection agency. The new school method that has been around for a while now is batch skip tracing. So which is better? The reality is that they both provide value to the overall objective which is finding the consumer, generating a right-party contact, and collecting the debt. Here we will discuss pros and cons of both options and ultimately leave the final decision to you as an agency operator but we will provide you with enough information to make an informed decision.
Manual Skip Tracing
When done correctly, manual skip tracing can be the most effective method, albeit not the most efficient. Manual skip tracing and having eyes on each account will result in a successful strategy producing the desired or intended result. I say that with the understanding that the skip tracer is well trained, skilled, and knows what they are doing. Manual skip tracing is an art form in a sense and it takes a well trained eye to know what to look for and just as importantly what not to look for.
Skip tracers need to be intuitive and use their judgment based on what they feel to be true even without conscious reasoning; instinctive. There are several web based platform sites that offer the ability to manual skip trace although more companies are switching to batching. I would recommend you have your skip tracer/collector have access to at least two of these web-based platforms so they can leverage multiple resources when searching for consumers. I also can’t express the importance of implementing a significant training program for skip tracers/collectors using such platforms. From experience, just turning a collector loose with skip tracing tools and telling them to go find the consumer is the least effective and efficient method. Take the time to develop training material that covers skip tracing from A to Z and ensure the training is effective and once it is unleash the material on the skip-tracer/collector and watch the results roll in.
Batch Skip Tracing
While manual skip tracing may be the most effective method of skip tracing, batch skip tracing is the most efficient. The objective with batch skip tracing is to achieve maximum productivity with minimum wasted effort or expense. This is exactly what batch skip tracing does. In the time it takes a skip-tracer/ collector to manually skip trace 25 to 30 accounts, batch skip tracing can skip trace thousands upon thousands of records. During the on-boarding process of setup with a batch skip tracing company, the agency will work with the skip tracing company to set up the most efficient method(s) to provide the desired results. One strategy is to take your manual skip tracing training strategy and recreate it through the batch skip tracing process. While batch skip tracing can’t replace a set of intuitive eyes looking at each account, in collections we work in a risk-versus-reward business and it can be a good business decision when the reward outweighs the risk. Batch skip tracing has come so far over the years as well. One of the major testaments to this is that the reporting capabilities can truly help you mix and match your overall strategy to garner the best results.
The ultimate question is which is better, manual skip tracing or batch skip tracing. To provide an answer that may come from an attorney (of which I am not), they both are. There are certain criteria you may want to consider when determining which method to use such as small balance, low score and bad demographic. You may want to use batch skip tracing because, again, the risk may not be worth the reward and you don’t want to spend a lot of time on accounts that are going to provide little to no return. On the flip side, higher balance, higher score and better demographics would perhaps warrant both batch and manual skip tracing if the batching doesn’t produce your desired result. In the end, it is important to find the right strategy that fits your agency. This can only be done by testing while using a champion/challenger strategy and ultimately going with the method or methods that will bring you back your biggest return.
Nick Jarman is the owner of RightAway Consulting & Coaching. Jarman served the last three years on the Board of Directors for ACA International and is the past President of the Missouri Collectors Association.