Talk about timing – May 2009

By Rich Preisig

Open Your Own Debt Settlement Office?!!  It’s definitely the right timing and the barrier of entry is minimal – a home office or shared space will suffice for many.  And for those of you who already have an office and are not already doing debt settlement – it’s the HOT ticket!  We’re talking about debt settlement agents closing 2 to 3 deals a day with an average ticket of $4,500.  Yes, that’s WOW money and most if not all of the business is done via E-Signature - a one call close!

If you’re in the market to add another product to your existing operation, Debt Settlement looks to be the answer.  Many in this growing Industry agree that debt settlement goes hand in hand with loan modification and of course, mortgages.  The same person you’re speaking with over the phone for loan modification may also be suitable for debt settlement and there’s no paperwork, credit score qualification, nothing – everyone qualifies and apparently, everyone is settling.

Quick start - Open Your Own Debt Settlement Office Input your information here and 4 different Debt Settlement Companies will contact you.

As more and more people are finding that settling their debt for approximately 55% on the dollar is a better option than going bankrupt, the providers of this easy exit are making bank.  With 15% of fees on the table to go around, what percentage of that you’ll see is generally up to the size of your organization and how many deals your organization can do a month. 

With the right bureau data & marketing setup, debt settlement agents are closing 2 – 3 deals a day.

Shall we do some math?

Let’s say the average deal is $30,000 (which is realistic with the right data)

If you received 50% of the 15% (7.5% total)

Your commission would be $2,250

On average, You, the head of an office of say 10 agents can command and receive 50% - 70% of the 15% in collected fees, but the highest commission payout shouldn’t be your only concern?  Many other variables including the debt settlement company’s client dropout rate and how and when you get paid are important to know, as managing your cash flow can be sink or swim.

When investigating which Debt Settlement Company to choose, you should get the answers to the following questions and make sure they work with your way of business.

What is their client dropout rate?

This means; for every client that enrolls in their debt settlement program, how many of them finish the program. 

Remember – You stop getting paid when the Client stops paying.  The lower the percentage dropout rate, the better.

What are the setup fees?

This means; some Debt Settlement Co.’s charge you an upfront fee.  This can be tied to their Company software (shows you your deals, client payments, etc.) and or they may charge a per-agent setup fee and tie it to some other cost they’re incurring.  Either way, watch how your total payout goes up and down with each Company.

How do You get paid and when?

You obviously need to know this so you can pay your Agents.  Most debt settlement Co.’s will pay your Co. 100% of the first payment.  Find out when you will receive that money and is this information in your agreement.

From here, major differences come into play.  Some companies will pay you 50% of the 2^nd and 3^rd payment and 35% of the remaining payments until you get your agreed upon total percentage.  Other Co’s are paying far less, as they put more of the client’s collected monthly payment toward the balance owed vs. their fees.  In doing so, they feel that the client retention rate to fulfill the program through its term is far greater than taking all the fees upfront.

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LIVE TRANSFERS & PROFILED BUREAU DATA GO HAND IN HAND.  

Just as important as opening your debt settlement office with the right company is, it’s as important to know what characteristics differentiate one live debt settlement lead transfer company or loan modification live lead transfer company from another.

Live lead transfers can be delivered in many ways, but the most equitable and effective live lead transfers occur when a broadcasted message is sent to thousands of individuals with targeted bureau data. 

Many companies offering live debt settlement leads or live loan modification transfers offer free data which is comprised of the white pages and InfoUsa data.  If you’re smart and do some investigating on which zip codes broadly reach your proposed target audience, you can save some money however, the money you saved may really be the money that you didn’t make.  And apparently, it’s a substantial amount.

Targeted data brings live lead transfers to a whole new level.  With this simple combination, the debt settlement agent can spend 75% of his/her day speaking to suitable prospects truly interested in their debt settlement or loan modification program.

Without live lead transfers and quality targeted data, the agent, whether it be for loan modification, mortgage refinance, cash advance, debt consolidation, debt settlement, FHA, reverse mortgage, health insurance, what have you; will end up spending 75% of their day just trying to get someone on the phone.  The latter method is still common, as many company decision makers believe in buying internet leads, tv and radio leads.  The lead sources work, but aren’t nearly the bang for the buck of live lead transfers.

Many are finding the costs associated with these internet leads and radio/tv leads don’t warrant their lack of conversion as well, the psychology associated with an inbound call from a prospect vs. calling someone; in the eyes of an agent, an inbound call is naturally preferred.  You’ll find that your agents will come into the office earlier, work through lunch and dinner and stay later, as that next call may be another sale.

So, what are some of the common characteristics to look for in a company offering live lead transfers for mortgage leads, debt settlement leads, loan modification leads, insurance leads, auto warranties, refinance leads, the list is endless, but these characteristics are important to know before you make a purchase.

The two ways that live lead transfers are sold:  1)    Live lead transfers can be sold on a price per live transfer.  Leads sold in this fashion often disguise the real value of the live transfer.  Note; avoid buying live lead transfers on a per transfer basis.

For example:  300 live transfers @ $4.00 per live transfer = $1,200

For some, this may seem like the best way to measure what you’re buying however, it’s not.

Let’s take a closer look.  Like a legend on a map, whereby a quarter inch may equal 500 miles; a certain amount of minutes equals a certain amount of live transfers; no matter who you buy your minutes from, you’re going to get the same amount of transfers per minute.  This is unless the company is bumping up the per second increments. (Explained below)

25,000 Minutes = 300 – 400* Inbound Transfers. (Keep in mind, this is with any live lead transfer company.)

If you buy live lead transfers on a per minute basis, then you need to examine the price per minute as well, what second increments they’re billing you at. 

The price per minute for live lead transfers varies from 2 to 4 cents per minute, but most are in and around the 3 cent range.  With this said, let it be known that the company selling minutes for 2 cents per minute is likely billing you at 30 or 60 second increments. 

This means that the call may have lasted 15 seconds, but with 30 second increment billing, you’re charged for 30 seconds.  Hence, you’re really being billed 4 cents per minute.  Ideally, you want to work with a company that offers 6 second increment billing.  These companies are generally larger and offer wholesale pricing on a per minute basis.

Let’s look at an example.

If you were to buy 25,000 minutes for 3 cents a minute (6 second increment billing), your cost would be $750.

These 25,000 minutes are going to buy you approximately 300 – 400* live transfers – cost $750.

If you were to buy retail by buying live lead transfers on a cost per live transfer, the same 300 live transfers at $4.00 a piece would cost you $1,200.

*The disparity in the 300 to 400 range is due to when the dialer is making the calls for you.  If you run the dialer during the day, you’re going to use more of your minutes to maintain the same desired frequency of inbound live transfer calls as you would experience at night.  You will use less minutes during your night shift, as more prospects are home. >>Home