You tend to take things for granted when all is relatively good in the world. Over the last ten years, the United States has led the world in economic expansion. All world economies rely on the strength of the US dollar, our consumption and our innovation. In the last few years, we have seen the greatest economic expansion. Just two short weeks ago, the stock market hit all-time highs and prospects seemed bright for strong GDP expansion for the foreseeable future. The recent jobs report last week for January (270,000 new jobs) greatly exceeded everyone’s expectations. The FED cut interest rates by 50 basis points to stimulate the economy that day as well. Normally, that would have meant a massive upswing in the markets. It had virtually no effect. People and markets are scared. Today, as I write this article, the DOW is down over 2,000 points. We are now dealing with a perfect storm of factors that can bring our economy to its’ knees. I am not preaching doom and gloom – just reality. Our consumption of stuff is way down and it will probably get worse before it gets better. Is every industry too big to fail? We are at a crossroad. What does all this mean? Generally, when corporate earnings decline and market forces are bearish, it signals a recession. Small business and large business alike will face many challenges this year to recover from events of a few short weeks. The immediate reaction by most companies when profits and growth are down is to protect the balance sheet and the stock. The easiest and fastest way to do that is to cut back. Sometimes the cuts are deep, and they put more pressure on an already overworked staff. These cuts can also create poor customer service and hamper efforts to grow yourself out of a hole. It is generally inevitable. The US is in a better position than most. We have a very strong underlying economy and I am hopeful as all of you are that we will bounce back strong in the coming months. It’s a sad day when much of your hard work building something gets cast aside.
Planning Ahead
For the record, I am a very positive person by nature. But the fact remains that a large part of my job as President at Access Receivables is to look down to road and try to anticipate what our company and our customers will need tomorrow. The two things I see right now are continued automation of CRM functions (self-service options) for customers through AI and machine learning and the other is good old-fashioned people. Consumers and businesses are just really starting to deal with the Coronavirus and the possibilities of mass absenteeism, small business failures and layoffs. A company without a well-defined plan for a pandemic is now a company potentially at risk. If one person in your office tested positive for the virus and you needed to be shut down for 2 weeks immediately, what would that mean to your business? Multiple locations can help but the increased pressure on staffing and infrastructure can be overwhelming.
Business Process Outsourcing (People)
You may already work for a company or institution has BPO plans in place for outsourcing pieces of your business. But, if delinquency doubles in the next 6 months or CRM hold times become untenable, you will have higher write-offs and unhappy customers.
Consider having at least 2-4 BPO vendors in different geographic locations nationally and internationally that can flip a switch and start handling customer calls and resolving balances in the event of any business disruption. Just taking 10 percent of your receivables and CRM functions to be handled by other firms during normal business times gives you tremendous flexibility during difficult times. It takes time to build a secure process so allocating a small percentage of your process today gives you flexibility down the road, makes you more agile and gives you options in cases of emergency. Think of your staffing like you think of your systems. A good disaster recovery plan requires agility, space, people, systems and process.
Self-Service Options for Your Customers (Systems)
There are many new technologies available to assist your customers with self-service options that can be better, cheaper and faster than contacting your call center. In an economic downturn, we want to make every effort to preserve our customer base. Communication is the key. During the great recession 2007-2010, Access deployed its Avapay Virtual Agent and created Nice People Collect More™. It was highly successful because consumers and business owners were scared, had no way to resolve their debts, needed to be reassured and be given more realistic payment options based on the circumstances. We demonstrated that a new approach in difficult times was appreciated.
I am prayerful for our company and our nation that recent events due to the Coronavirus and other cascading issues can be dealt with quickly, efficiently, and safely. Sometimes when you build disaster recovery programs you feel that they are an insurance policy that you need but you certainly don’t expect to deploy. We are now preparing ourselves for multiple scenarios as I know most of you are doing as well. Last week, as a first step, our company relaxed our sick policies and made plans to compensate our people for up to 2 weeks if they are diagnosed with the Coronavirus. Although there are no outbreaks of the Coronavirus today anywhere near our offices, we need to plan and be prepared to safeguard our people, our customers and our business. This company started doing business 9 months before the attacks of 9/11. Who would have thought that 9/11 would have created numerous challenges for our company as several of our large customers in the insurance industry went out of business as a result of that disaster in 2002.
Closing
I do not propose to know enough about the economy and the coronavirus to have the answers, but I have lived through gas lines, financial meltdowns, and more as a business owner. I would love to hear comments from some of you who may have additional ideas and plans. The healthcare officials and economists do not have all the answers yet either. It will have to be a day by day situation and we will all need to think outside the box to get through it. In the coming weeks and months, Access Receivables will be making every effort to address contingency plans that go beyond normal compliance and look for ways of identifying innovative strategies to assist our customers as well as protect our associates. After twenty-one years in business we have come to understand that planning for the worst and hoping for the best is usually the best road to take. Our hopes and prayers are with everyone in our nation and around the world that this event will be quickly contained and eradicated soon.