“Get your money back. And the customer” is Alektum’s guarantee.
Collection agencies have a reputation for not chasing small debts because the profit is too low. But Alektum specialises in collecting small amounts.
Alektum works on commission for its clients – like a real estate agent, you could probably say. No recovery, no fee – but if the debt is collected, the client pays 20 percent of the amount.
“This is the least glamorous side of the collection business. Most people want to work with B2B and larger amounts. But there’s money to be made on small amounts. Some companies have thousands of small unpaid debts. Money that is difficult to recover because people are up to their necks in debt and not motivated to pay,” says Anders Svensson, Collection Manager at Alektum Inkasso, one of Europe’s leading companies in consumer debt collection and long-term surveillance.
Working with so many small amounts improves the company’s cash flow.
“It helps us maintain our financial strength and make better forecasts for our clients,” says Anders Svensson.
No letters out, no money in. Alektum has to get its letters out in time.
“Our letters have to be on top of the pile when debtors get paid on the 25th of the month. Their money is gone by the 26th. It’s as simple as that,” says Anders Svensson.
The debts that Alektum recovers are usually small. But they all add up for companies. 20,000 cases of SEK 100 – that’s a lot of money. Alektum tries to find individual solutions so that each debtor can manage to pay off their debts.
“We can offer payment plans for people who can’t pay the whole amount right now. Most people can pay at least SEK 100 every month. But not many can pay a debt of SEK 300,000 all at once.”
Many clients have a large number of debtors with mainly small debts. That generates a lot of mailouts.
“We send about 4.5 million letters each year. And every letter has to arrive on time. That puts a lot of pressure on our distributors,” says Anders Svensson.
The secret to Alektum’s success is keeping the database up-to-date.
“Thanks to our database, we can handle large volumes and work with lots of claims at the same time. We need correct addresses and personal identity numbers – otherwise we’d never recover anything,” says Anders Svensson.
Alektum uses the same method to collect from customers all over the world – letters, telephone calls and text messages.
“Because we have the right addresses, we can deliver the original to Posten and take advantage of their postal discounts. That’s a good solution for us.”
Alektum had three distributors when it started working with large volumes – Itella, Posten and Citymail. But three different distributors made it difficult to localise faults when something went wrong.
“We gradually moved over to Posten’s eBREV-service and one single distributor. We were happy with that solution, and sceptical when Posten introduced Strålfors as its new partner in 2007. But it didn’t take long before Strålfors created new opportunities. Suddenly someone was interested in what our letters looked like, the added value of inserts and so on. That raised the bar for us. We chose Posten to lower our costs and minimise errors. Now we’ve got two partners instead of one.”
Strålfors prints all of Alektum’s letters in Scandinavia. Swedish Posten distributes the letters to each country.
Most of Alektum’s current communication is on paper.
“We’ll probably send e-mail one day but we’re not there yet,” says Anders Svensson.
In the meantime, the company has to find other ways to communicate effectively.
Each debtor has an average of 5 debts with Alektum.
“They probably have the same number of debts with our competitors too. So we have to work harder to get their attention.”
Anders Svensson hopes to win the battle with new colours and designs. But the solution has to be unique and not resemble an invoice or advertising.
“Payslips are a good example. Perforated edges signal something exciting, that you are getting some money and not a bill.”
The next step will be to personalise letters and insert customer-specific communication.
“We might even be able to offer a discount to some debtors in the future. We also have to keep up with all the new payment solutions that come along.”