Tactical debt improvements deliver ~£7m cash for large Energy retailer

Holly Odle 23 Oct 2023
Written by Holly Odle

Challenge

A large Energy retailer was facing significant challenges with customer debt, requiring improvements to their collections processes to mitigate this. Their total debt was ~£100m at the time of engaging BFY, with communication gaps present across the customer debt journey.

Our approach

Our Debt Taskforce assessed the E2E collections journey, discovering that customers were receiving no debt communications beyond the early collections phase. A lack of risk-based journey optimisation was also evident, meaning limited escalated treatments were in place, resulting in a high volume of customers completing the journey with unresolved debt.

In addition to this, we found that ~60k customers had reached late-stage recoveries, without any BAU treatment options to manage this. This was caused by field activity for warrants and mode switches being on hold, as a result of the ongoing cost of living crisis.

To address the gaps in communications, we created a multi-stage, targeted collections campaign, which was based upon the risk-level of each cohort. A new customer engagement platform was also implemented to ensure this was delivered effectively.

Finally, we mobilised a team of specialist debt experts, focussing on account management for segments of complex debt, including the ~60k customers in late-stage recoveries.

Results

As a result of these initiatives, our client achieved a total benefit of ~£11m. This included a ~£7m increase in collected cash, while also driving a ~£4m reduction in BDC.

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Rachel Littlewood

Director

Rachel leads our Financial Optimisation work streams, working with leaders to improve profitability & cashflow

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Joseph Cooper

Manager

Joseph supports our Retail clients to improve their operational processes and business performance.

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Holly Odle

Senior Consultant

Holly supports clients with large-scale business transformation programmes, delivering significant bottom line improvements through back-office optimisation.

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