Balancing Receivables Collections with Common Sense, or how Verizon Wireless wasted my Saturday morning
When was the last time you paid attention to how much it costs you to collect every penny? I’m guessing that Verizon Wireless hasn’t spent much time on that – and I just wasted part of my Saturday morning finding that out. Last year, we changed our cell phone provider from Verizon to a competitor. One of the primary considerations was that we learned about a per phone fee – allowed by the FTC – that changed our $50/line to $70/line for “access” to the network we thought we were already paying for. But that’s not the real topic for this post.
Yesterday we received this email from Verizon showing a whopping $0.36 balance on our account. First off, we had autopay set up on this account, so I don’t really understand why we have any outstanding balance, but somehow Verizon wants their $0.36 and I would be happy to pay it just to stop the emails (plus, I don’t want to have a credit delinquency for less than a dollar reporting!)
I sent a Tweet to Verizon and received a prompt response with a telephone number to resolve the issue. Service win #1 for Verizon.
And then I called the number. Service win #2 was the great attitude of the representatives I talked to.
Service big fail? They couldn’t do anything easily, it at all.
The first representative couldn’t help me because she couldn’t make a credit of less than a dollar. She escalated me to Ivan. After confirming via email that I was authorizing him to access the account, he was able to credit the account. Of course, because this account is closed, he couldn’t send me a confirming email. I can only HOPE that I won’t receive another request for my $0.36.
So my question is: was all that worth it? Verizon just paid two (good) customer service representatives 10 minutes to resolve a $0.36 charge. Oh, and there was the time the social media monitor spent to respond to my Tweet. Let’s say she spent 2 minutes. If Verizon is paying them $15/hour, that $0.36 just cost them a gross of $3 (before the burden and benefits). And that doesn’t include the reputational cost to my Twitter followers who just saw this.
This interaction reminded me of when I was an audit supervisor. I had a great new staff accountant on my team; he was one of those medalists for doing well on the CPA exam. While I am all for 100% accuracy in cash, he wanted to get depreciation costs correct to the penny – on $1m of assets!
When is the last time you looked at reasonableness of your processes? Are you willing to lose $2.64 just to be able to have a clean AR schedule? What are you paying for 100% collections? If you are using automated processes, when was the last time a human reviewed the collection process?
Automation is great, but it can’t truly be set it and forget it. You – and Verizon – may be paying more than you think!