Increasing contact rates and ROI for UK commercial energy client

The challenge

Our client, one of the UK’s largest energy providers to businesses, had a stock of final / closed accounts with very aged outstanding balances. Establishing contact with customers had previously failed despite the client having made numerous previous contact attempts via letter, SMS, calls and long periods of third-party debt collection agency (DCA) activity.

The client wanted to explore ways to better understand these businesses’ current ability to pay and drive fresh engagement and cash collections (in turn reducing provisions and bad debt).

The solution

Just undertook a rigorous portfolio analysis and treatment selection to help the client understand and segment this aged portfolio of small medium enterprise (SME) business customers.

By applying Just’s proprietary SME LitigationScore to identify which accounts would be suitable for litigation, where the business was still in operation and likely had the means to pay.

Just identified a significant segment of accounts likely to deliver strong net positive returns. Just worked closely with the client and their incumbent litigation provider to ensure the customers received the appropriate treatment throughout the litigation process.

For accounts unresolved by the litigation activity, Just provided a fully managed High Court enforcement service, using its ready-to-go network of enforcement suppliers and agents with specific commercial debt experience.

The results

The project has already generated significant cash and operational benefits for the clients – driving strong and early cash returns as well as identifying significant pots of fictitious debt which have resulted in strong P&L benefits.

  • High contact rates: Contact was established with two-thirds of customers, compared to an expected contact rate of typical aged commercial debt of less than 25%
  • High ROI: Litigation activity has already returned a 100% ROI against costs and enforcement activity has already reached a 9x ROI against the fees chargeable to the client, with further activity ongoing

The success of this initial project has meant the client is now engaging Just to provide analytic and debt selection services, plus enforcement execution services on much fresher and regular debt flows.