RICHARDSON, Texas--(BUSINESS WIRE)--Vertex Business Services is partnering with Metropolitan Sewer District (MSD), based in St. Louis, Missouri, to implement a new debt collection strategy applying advanced analytics to collect more outstanding debt from MSD customers. Overall, the total year-one projected value of the Vertex debt collection program implementation for MSD is estimated to be $1,412,771.
In early 2011, Vertex first approached MSD with the debt collection opportunity in response to MSD’s expressed interest in reducing its total amount of outstanding debt and increasing speed of payment from its customers.
Over the past eleven months, Vertex has utilized Debt Collection Modeling and Process Notification strategies to elicit payments from MSD arrears accounts.
Analytics in Collections & Utilities
Analytics is increasingly used to better understand customer behavior. For a utilities company, using data to determine which customers are most likely to pay their bills and then treating them accordingly is proving to be a powerful tool for increasing collected revenues while decreasing collections costs. Jay Reseigh, head of the Vertex Analytics department, explains, “The combination of analytics that predict customer behavior, such as likelihood to pay back debt, with a proactive, targeted and customized messaging solution is driving significant and exciting benefits for our clients. This project substantiates a key Vertex value proposition to the utilities industry in North America.”
Background: The Vertex Approach to Debt Collection
In Debt Collection Modeling, Vertex creates a data-driven predictive analytics model to determine the likelihood that customers will pay back debt after entering arrears. Once these segments of customers have been identified, Vertex then applies this knowledge using Process Notification to provide customers a proactive, targeted reminder phone call using an automated outbound messaging system. The combination of these strategies has resulted in a substantial increase in arrears dollars collected, an average monthly reduction of accounts and dollars sent to agencies, and a significant reduction in days sales outstanding.
Vertex understands collecting outstanding debt from customers is a challenge many utilities face on an ongoing basis. Experience has shown that methods of handling the collection of outstanding debt vary widely. Ultimately, as outstanding debt continues to grow, businesses often see a decrease in cash flow and an increase in costs to collect over time.
Results Delivered: Case Study
Since MSD’s inception of Vertex Debt Collection Modeling and Process Notification strategies, in the initial ten months of the project MSD has:
- Collected $8,463,203 within 10 days of the targeted phone calls
- Achieved a 35.5 percent payment response rate
- Seen between a 12-20 percent reduction in accounts reaching 45,60,90 and 120 days in arrears
- 22 percent reduction in accounts assigned to an agency
Jan Zimmerman, MSD director of Finance, states: “We are extremely pleased with the measured results we have seen from Vertex’s innovative approach to debt collection. Since partnering with Vertex to implement our collections solution in September of last year, we have seen significant reductions in accounts assigned to third-party agencies and an increase in speed of payment.”
About Vertex: Vertex Business Services delivers a complete portfolio of BPO, IT and professional services developed solely to meet utilities industry challenges. These offerings help electric, water and gas utilities in North America better manage their critical customer relationships and bring efficiency to their critical operations. For more information, please visit www.vertexgroup.com.
About Metropolitan St. Louis Sewer District: MSD is responsible for the interception, collection and treatment of wastewater, as well as stormwater management in St. Louis, Missouri. MSD's current boundaries cover 525 square miles and encompass all of St. Louis City and approximately 80 percent of St. Louis County. MSD serves a population of approximately 1.4 million and has approximately 434,000 single-family residential, multi-family residential and commercial/industrial accounts. MSD currently operates seven wastewater treatment facilities, treating a combined average of 330 million gallons of sewage per day. MSD also operates and maintains 9,649 miles of sewers. For more information, please visit www.stlmsd.com.