How to Maximize Profits with Forwarders
"An Incredible Opportunity"First and foremost, we must excel at two things: customer service & performance. All other facets of our business fall into one or the other. With the advent of multiple addresses and little to no front end work being done on the account by certain forwarders; it pays to find where the car IS NOT, before even assigning it into the field. We run a plate search on every account, by doing this we not only eliminate many miles of empty runs but we also empower our camera systems with plates to scan. Then my office staff will call the collector and thank them for the assignment. During this call the account is discussed in detail and we are granted access to the historical notes every collector has on every account. This is basic, itís how we all found cars before the internet and the all knowing databases (that charge you and give you history).
The 275 fee on contingent is cutting it close for us. Without volume, we lose money and thatís only if we secure the unit quickly. Like most of you, I've had to accept some of that work over the last year. Profits were down, volume down, everything else is up. A fee schedule this low can be overcome through the use of several other profit centers we have been forced to learn. Years ago, a large forwarder told me and had me relay the info to many others that there are more ways to bill them than just the repo fee, like keys, storage, & and informant fees. This is done on the floor level with the relationships you build when your staff calls to thank and discuss the account. All extra fees these days must have an approval. The big forwarders cannot monitor every account, so ask for that extra on the collector level and do it often. I refuse to work for anyone who gives me contingent/low fee work coupled with the paper push mentality that equates to low success rates.
For instance if you get an account from client A that usually works their accounts well and more than half the time the info is good, I'll run that for the short fee knowing full well that I can make a little extra on keys. Conversely, I wonít accept an account from any client that does nothing on their end with a short fee/contingent. That ability to select maximizes profit for my company because we are using our resources wisely.
The Power to ChangeAs stated earlier, we have the power to change this. Many forwarders have corporate salesmen tasked with getting new clients and they've done it by giving away our investment and services. It started with free storage. The trend continues and itís insulting to think that professional repossession agents can be trivialized in this manner.
Keep in mind that the forwarding model is here to stay. Not all clients want to use a forwarder, step your game up to their level for your own strength. Never put all your eggs in one basket because in all my days doing this, Iíve seen many strong relationships get greased because of a dollar. Itís past the time to take your stand. Faith Financial did this a year ago when I (along with 4 others) started a national forwarding company. To me, there is no reason that anyone in business cannot go the extra mile and help with the final outcome. Passion for perfection should be our mantra. Those who are in it for more selfish reasons need to be weeded out; we're already seeing some of that. Now letís talk about how to expedite the new recovery industry.
This industry is about money, not cars or repossessions. We're a small part of the equation and our direct clients are not in the repo industry. They are in the money business and we are only a safety net. Just like you and I need a painter from time to time, we donít need one every day. Repeated calls for volume only makes you look desperate. Performance with no claims is golden. Having a staff thatís happy, knowledgeable and accommodating is basic and imperative. But not all forwarders understand this. How many times have you heard "we'll call someone else". Repo agents donít grow on trees, itís a skill set thatís only learned at the school of hard knocks, and tuition is high. At Faith Financial, we strive to find cars just like you.
I understand that some forwarders are akin to an alligator investment; that is they eat up your money with little return. Once you've learned to run leaner, cut them loose. I have begun that process with a letter to each outlining our new fees. My staff will not accept accounts from those forwarders who do not want to pay. Soon it will impact the success rate of that forwarder and they're client will be looking. Because (and this is the key), THEY CAN NOT REPOSSESS CARS.
You will see a dip in your volume but just ask yourself, ďWhat did I lose?". I'm betting the answer is not much. When the letters went out, phones lit up. Sure they'll try to play hardball, just have other clients that can replace them. At Faith we quickly found out that my staff had more time to devote to clients that helped, we didnít have to cut & paste updates they never read, the phone didnít ring with ridiculous questions, and we found more cars for our good clients. Soon the rewards came in the form of more volume from our good clients, I've never looked back.
Remember, we need to get back to basics, we are specialists. Performance and customer service will win every time. As some of the forwarders who take our service for granted will soon learn, without repossessors, they have no big success rates to sell, they have no services to give away, and there is someone out there waiting to take their clients and work the accounts in a partnership with recovery agents. In the interim, be prepared even if it means eating Raman noodles again. I've seen how long it takes to bring a big forwarder to their knees and it ainít long. Rather than just talk, I have done these things and it works. I wish you all the best and daily I pray for many of you individually and our industry.
Article By Bryan McCollister
Owner of Faith Financial, Fort Worth, Texas
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