Free Marketing for Your Collections Business

There are as many marketing schemes out there for small businesses as there are small businesses.  Marketing “gurus,” marketing companies, and marketing plans will have your head spinning with ideas—but when you look into the actual Return On Investment (ROI), you might be disappointed to learn that many of the schemes that work for one company might have a completely different success rate (or lack thereof) for another.  That’s why focusing on avenues of free marketing still makes the most sense for small collections companies that are wishing to expand their business and reputation.  Below are a few of the most-used free avenues for online marketing. 

LinkedIn

Do you (or does your company) have a profile on LinkedIn?  If not, you’re missing one of the most valuable, FREE online marketing opportunities available to your collections firm.  On LinkedIn, your employees can connect with your business, which adds a human face to your company, providing something that has too often been lost—particularly within this industry. You can also connect with other businesses and prospects who will be potential customers for you down the road. 

Facebook

According to the most recent numbers available, Facebook has hit the one billion active users mark this October 2012.  “Active users” means users who visited the site within a month.  If we were looking at the website in terms of population, those numbers would put Facebook as the third most populous “country” in the world. 

There is a lot of confusion about Facebook in the online marketing world.  While on one hand, many people recognize it as a viable marketing opportunity that is both free and accessible to most people, they also realize that Facebook is used primarily as a social networking site for individuals.  While LinkedIn focuses on business to business connections, Facebook focuses on social interaction among individuals—interaction that often doesn’t include easy acceptance for business marketing.  However, when a company chooses to use Facebook as primarily a placeholder page with company information, this is still a better choice than not having a Facebook page at all. Even if you don’t have a lot of daily action taking place on your page in the form of status updates and “likes”, you are still represented on a platform that has 900 million users and your Facebook page still gives your company greater search engine visibility on the Internet.   

How are financial regulators focusing on the credit and collections practice this year?

How the Internet Can Increase Your Collection Company’s Reputation and Brand Image

According to a recent Pew Research poll, there are currently 164 million adult users of the Internet in the US.  This is why having an online presence is necessary if you are a collection agency that is looking to market your services and maintain a solid reputation.  The best part about your online presence is that it is a simple, inexpensive way to not only control your image and your brand image—it is also the best tool you can offer to allow your company the room it needs to grow and thrive, even in tough economic times. 

Content marketing

Marketing through your website’s content is an easy, inexpensive way to get the word out about your business.  While a lot of businesses worry that this will take too much manpower, it really is as simple as writing about the topics in which you are an expert.  Is there a question that your clients typically have about the debt collection process?  Write out a 300-400 word response to that question and put it in the form of a blog entry on your website.  This not only establishes you as an expert in your field, but also makes it easier for search engines such as Google to find your website when someone types that particular question into their search engine. 

Get involved in Social Media

LinkedIn, Facebook and Twitter all offer easy, free applications to increase your company’s reputation and brand image.  These social media portals provide you with the opportunity to participate in group discussions and announce any special achievements that your company has won or attained.  Facebook and Twitter are also good places to announce when you have a new blog topic that has been posted, and will link your social media “friends” to the blog within your website.  This not only increases your website traffic (which helps you reach better visibility on the Internet)—it establishes your site as a professional link that helps potential clients build trust in your services and abilities.  

How do Government contracts figure in to the collections industry and should I apply for one?

American Express’ $112 million Settlement

Federal financial regulators, alleging that American Express used illegal methods to convince consumers to settle old debt, have finally reached a settlement with American Express Centurion Bank of Salt Lake City, Utah.  According to this settlement signed by Consumer Financial Protection Bureau (CFPB) and the Federal Deposit Insurance Corporation (FDIC), approximately 250,000 customers will be refunded amounts near to $85 million dollars.  In addition American Express will pay civil court fees of $27 million. 

The settle determined that American Express was falsely telling consumers “that if they entered into an agreement to settle old debt (that was no longer being reported to consumer reporting agencies), such settlement would be reported to consumer reporting agencies and thereby improve the consumers’ credit scores.” It was alleged that American Express also knowingly entered into settlement agreements with customers “that implied that consumers who entered into settlement agreements to partially pay such debts would have the remaining balance of their debts forgiven, when in fact the balance remained a debt owed to American Express.”

This increase regulatory pressure for creditors and collection practices was one step of several that have taken place in the recent year. In fact, CFPB’s action to pursue this legal action was fresh on the heels of two more settlement agreements worth over $100 million each that were filed against national credit card companies within the past three months.  The first was Capital One, which settled on a $140 million dollar agreement in July and the second was Discover, which settled on a $200 million dollar agreement in August. 

 

American Express will now be forced to forgive the debt it allegedly promised to forgive in the first place and consumers who had been denied American Express cards based on this unforgiven debt will receive $100, along with a pre-approved offer for an American Express card.  

Are Government Contracts the Next Big Wave for Collection Agencies and Attorneys

When the economy faces uncertain times, government contracts can prove to be a lucrative and steady income for your collections business.  Beyond the increased business and stable pipeline of income, one of the biggest pros to securing a government contract is that you can be assured of prompt payment—often in as little as 15 days. 

Some of the cases for which both local and state governmental agencies hire outside collections firms include motor vehicle violations, parking violations, and court-mandated alimony.  On a federal level, student loans are becoming a hot commodity for collections as many people are defaulting on them, and can prove to be extremely lucrative for any collection agency that manages to secure the contract. 

The best way to apply for a government contract if you are a collection agency is to look on the Federal Business Opportunities website.  In order to do this, you will need your firm’s North American Industry Classification System (NAICS)code—this can be acquired from your accountant or you can find it through a search of the U.S. Census Bureau’s website. 

The process to apply for a government contract isn’t an easy one, however, and many small businesses fail to secure one simply because they don’t spend the time and effort required to make sure they are familiar with the process and have the funds needed to start.  Experts estimate that obtaining a government contract for your collection agency will cost approximately $3,500 and take approximately eight months to achieve.  And this is only if you follow the rules carefully and pay due diligence to deadlines and certification requirements in order to get priority bidding status for your collections firm. 

Many Chambers of Commerce and Small Business Association chapters offer workshops and informational sessions to help small businesses cover their bases in obtaining a government contract.  Use these resources that are available to you, or you can hire a private consultant who will guide you through the process.