Champion challenger testing, explained for credit managers

Every collections strategy is a set of choices: which accounts to contact first, on which channel, at what time, with what offer. Most of those choices are made on experience. Champion challenger testing makes them measurable.

How it works

1. The champion is your current strategy, the one running on most of the book today.
2. The challenger is a change you want to test: a different channel order, a different contact time, an earlier settlement offer.
3. Split comparable segments. Accounts with similar balances, ages and risk scores are divided so each strategy works a fair sample.
4. Compare the results over the same period: amounts recovered, arrangements kept, cost per rand collected and complaints.
5. Promote the winner. If the challenger beats the champion, it becomes the new champion and the next test begins.

What to measure

Recovery alone can mislead. A strategy that collects slightly more but doubles complaints, or produces arrangements that break in month two, is not an improvement. Track at least:

• recovery against the segment’s balance
• arrangement keep rate after three months
• cost to collect
• complaints and disputes

Questions to ask a collections partner

• Can you run a challenger on a segment of my book, and how do you choose comparable accounts?
• Will I see both strategies’ results on my dashboard, not just the overall figure?
• How long does a test run before you call a winner?

Talk to us about testing strategies on your book.