Reduction of debt collection costs in a telecom company

Introduction: Optimizing Debt Collection in Telecommunications

Debt collection is a critical process for telecom companies, but manual decisions based on limited criteria can lead to inefficiencies and lost profits. Initially, our client selected one of four collection strategies based on just two simple factors—the amount owed and the length of arrears—relying heavily on the intuition of decision-makers.

The Problem: Inefficient and Costly Collection Process

This basic approach caused challenges such as:

• 
  Overuse of internal debt collection resources on customers for whom it was ineffective.
• 
  Lack of a systematic way to maximize recovery profits.
• 
  Decision-making variability and potential for suboptimal strategy choices.

The Solution: Automated, Data-Driven Strategy Selection

We implemented an automated decision process that selects the optimal debt collection strategy for each customer based on multiple criteria and focused on profitability maximization.

Key improvements included: