In This Edition

• 📈 Overpaying for Email

• ⚠️ Finding Gold in Ringless Voicemail

• ⚙️ The Power of Commoditized Services

• 🤔 Where to Find Cost Savings

• 🤔 Wrapping Up

• 🎓 Links for the Learners

• 💡Tip of the Week

• ⌛Recap From Last Week

• 🙌 Sharing is Caring

Let’s start with a confession: Writing this makes me feel a little guilty. 

I truly appreciate the value our vendors bring to the table. Many of them are incredible partners who help us run a more effective, compliant, and consumer-friendly operation. They’ve allowed our department to scale and improve in ways I couldn’t have imagined a decade ago.

But here’s the thing: as much as I value these partnerships, I have a responsibility to run an efficient department. That means scrutinizing costs and making tough decisions when necessary. Over the years, I’ve learned a few lessons about where vendors tend to overcharge—and where opportunities for savings are hiding in plain sight.

I want to share the secret to finding vendors who won’t (un)intentionally gouge you on price. 

Sometimes it’s not even about malice; it’s about understanding which services are truly commoditized, where competition drives down costs, and how to avoid paying a premium for what should be standard. By knowing what to look for, you can find partners who deliver value without breaking the bank.

Let’s start with a couple of stories to help illustrate.

📈 Overpaying for Email

We’ve been using email to communicate with consumers for years. We found huge cost savings, improved penetration, and better consumer experiences. The project was truly a success in every sense.

The vendor we used to send our emails was solid. They helped us transition from a fully analog model to a digital-first one. 

They were also charging us a fair price. $.005/email seemed quite reasonable compared to the nearly $.75/letter we had been accustomed to. But after some research, we realized how much we were leaving on the table.

We recently stopped use of that vendor and built a direct integration into Sendgrid to send our emails. By integrating directly with SendGrid, we reduced our cost to closer to $.001/email. The savings were significant, but it wasn’t just about the money. The direct integration gave us better control over deliverability and insights into email performance.

Unfortunately, many in the industry are still overpaying. Some vendors charge $0.10 per email. Yes, $0.10. That’s 100x the cost that we’re now paying!

⚠️ Finding Gold in Ringless Voicemail

Ringless voicemail services are another area where I’ve seen agencies overpay. When exploring options, we were initially quoted $0.10 per voicemail. However, by shopping around, we found a provider that offered more features for just $0.02 per voicemail. That’s an 80% savings on a service that’s identical in its core function.

This experience was a powerful reminder: even for essential tools, there’s often a better deal if you’re willing to do the research and push back on initial quotes. Don’t just stop at the first vendor you encounter or the one that everyone else uses.

⚙️ The Power of Commoditized Services

The common thread between these two examples is that they’re both commoditized services. Commoditized services are standardized offerings where there’s little meaningful difference between vendors. Whether you send an email through Vendor A or Vendor B, or deliver a voicemail with one platform versus another, the end result is virtually identical.

Why does this matter? Commoditized services typically come with significant price competition, creating opportunities for savvy businesses to save money. Vendors in these spaces compete heavily on price, which means there’s no reason to overpay if you’re willing to shop around, negotiate, and benchmark costs.

Tip: Open your vendor searches to those outside the well-known ones in our industry. There usually are many more options once you broaden your search. Other industries have many of the same needs we do, and often are even further ahead technologically. Leverage this!

🤔 Where to Find Cost Savings

If you’re ready to cut costs without sacrificing results, start by focusing on these common commoditized services:

• Email delivery: Prices can vary wildly, so benchmark your costs and consider direct integrations with platforms like SendGrid or Amazon SES. Most vendor solutions are just wrappers built on top of these platforms anyway.

• Ringless voicemail: Shop around and compare features versus price. As we learned, lower costs don’t necessarily come at the expense of better capabilities.

• Skip-tracing services: Push for better pricing, especially if your volume is high. Even a small discount can add up to big savings.

• Postage and print/mail services: Hybrid solutions or bulk discounts can lower costs significantly.

• Phone minutes and call recording storage: The preeminent example of a commoditized service. There are SO many providers in this space that it’s not hard to find value if you’re willing to put in the time.

🤔 When Cheaper Isn’t Better

While it’s smart to save on commoditized services, there are areas where cost-cutting can do more harm than good. These are often specialized or mission-critical services where quality and expertise matter more than price:

• Service-driven products: Any vendor where the value of their offering is heavily dependent on the quality of the service they provide. Think of situations where quality of customer service, depth of experience and reliability matter. If you’re with a creditor and reading this: Yes, this applies to your collection agency 😉

• Compliance and regulatory management: You don’t need me to tell you this, but don’t skimp on anything that could create compliance risk. 

• Data security and privacy solutions: Protecting consumer data is non-negotiable. The cheapest solution might not provide the safeguards you need.

• Analytics and decision-making platforms: Tools that provide unique insights or predictive analytics often justify their price with better outcomes - as long as you can demonstrably prove that the data is sound and the ROI is strong.

🤔 Wrapping Up

The ARM industry thrives on partnerships with tech vendors, and for good reason. They help us scale, stay compliant, and improve efficiency. But not all services are created equal, and understanding the difference between commoditized and specialized offerings is key to optimizing your budget.

By focusing on commoditized services, you can negotiate better rates, explore alternatives, and significantly reduce costs. At the same time, knowing where not to cut corners ensures your operation remains robust and compliant.

The next time you’re evaluating a vendor, ask yourself: Is this a commoditized service? If it is, there’s a good chance you’re leaving savings on the table. Use those savings to reinvest in your team, technology, or bottom line—and watch your department thrive.

🎓 Links for the Learners

•  📖 The 2025 edition of Troutman Amin’s annual TCPA annual review is here. This is my favorite TCPA guide in existence and they give it away for free.

• 📖 More challenges for the CFPB: The U.S. District Court for the Eastern District of Texas has granted a preliminary injunction, delaying the Consumer Financial Protection Bureau’s medical debt credit reporting rule until June 15, 2025.

• 🎧 How AI is transforming labor markets.

• 📖 Setting vs accepting culture.

 💡Tip of the Week

LLMs (like ChatGPT) can be incredibly useful. But they’re also a lot like reporting - if you put garbage in, you’ll get garbage out.

I recently found a new tool that helps you improve your prompts - simply enter your original prompt and answer the questions that it provides. Spending the extra 2-3 minutes will save you 10x the troubleshooting time.

PS: Make sure you - and your teams - are using AI tools responsibly and according to your policies. Check out NIST’s resources for creating policies if you still don’t have them.

PPS:  I spent the weekend tinkering with ChatGPT … and eventually built a custom GPT trained to my specifications. Check it out! Get free access to the Collector Coach GPT, designed to help collectors improve call phrasing, rapport, and negotiation skills.

⌛ Last Week Lowdown

ICYMI: Highlights from last week’s edition. Click here to view the entire post.

1. Why to focus on process rather than results

2. How to adopt process-based frameworks

3. The case for re-scoring/prioritizing aged accounts

🙌 Sharing is Caring

Are we on the same wavelength? Check out EngageARM.com for free resources, networking, and in-depth tutorials to help you build a highly-effective recovery department.

I’d like to close this with a quick ask. If you enjoyed this, please share with a colleague. Even better, take advantage of the referral program (linked below). If you disliked it, let me know why. All feedback is good feedback, after all.

Cheers,

Nate

EngageARM.com