Colorado success stories: Liberty Acquisitions Servicing
Editor’s note: This is another in a series of Colorado company success stories as told by CEOs and business owners.
I did not know what to expect when I met with Mark Cannon one of two managing directors of Liberty Acquisitions, a collection agency for consumer debt. I thought to myself, “What can I possibly find that is unique and interesting about a collection company?”
I was very surprised to find a very different approach than I was expecting. Most of the conversation focused around finding solutions for clients, implementing processes and systems to build flexibility, and focusing on customer service. It must be working. Between 2003 and 2006, company revenue doubled each year; between 2006 and 2010 revenue grew by over 40 percent per year. The company currently has 45 employees and the partners recently sold an 85 percent interest to a private equity firm.
What are two engineers doing running a collection agency?
You are right that both my partner, Jeff Busch (Managing Director) are engineers. We have been friends since we were at the Colorado School of Mines. I spent several years in engineering for a medical device company and Jeff was in IT at Qwest. We both wanted to work together and wanted to escape the bureaucracy and have more control over our futures. We saw an opportunity to introduce processes, technology and service into this industry that we believed would provide us a better return.
How are you different than other collection companies?
We have a fundamental belief that debts need to be paid and people have an obligation to pay a debt. We also believe that most people want to pay their debts, but that the system sometimes works against them. We view our job as finding common sense ways that they can do that. We have built IT systems, introduced Lean techniques (typically associated with well-run manufacturing companies), measurements, and controls into the process so that we can accept very small monthly payments and flexible payment plans over long periods of time. Most collection companies need to push for a lump sum settlement. We can find a solution that works for the consumer and enables them to pay what they are able to pay, depending on their circumstances.
Who uses your products and services? Who are your clients?
We purchase consumer debt from banks and credit card companies 18-36 months after charge-off. We don’t grade the debt like other firms. We follow the same process for every debt regardless of size – through the courts if necessary. This is only necessary if the client is unwilling to find a solution.
How has the recession impacted your business?
People assume that an economic recession is a “good” time for the collection business. Actually it’s not because people’s ability to pay is negatively impacted by the recession. We have done better than most of our peers because our systems and processes allow us to be more flexible about payment structures.
You have a different approach to hiring and training?
We do not hire people from the collection industry. We hire people with either a sales or customer service background. We train and coach our people to interact with our clients. Clients typically have been through a tough time and they are frustrated and anxious. Our people need to let the client vent first, before they can engage in a solution-oriented conversation. Most times the client does not see that there is a solution. We are proud of what we do because we treat people with respect and really work with them to solve a problem. We empower our employees to make decisions about solutions. We work with the process servers and lawyers who work with us to be more client friendly – in many cases, they are our face-to-face “sales” representatives.
Our group needs to work together to find the best alternatives, so we strive to foster teamwork. We pay a team bonus every month.Both my partner Jeff and I were soccer players at “Mines”. We view our culture a little like soccer practice – you work hard and challenge yourself, but you feel good after the workout.
You recently did a recapitalization with a private equity firm. What are your plans now?
We currently only do business in Colorado. We saw an opportunity to expand geographically and wanted an investment partner to help us. The perception is that every state has different laws and regulations that make national expansion difficult. We believe that we can tweak and customize (not re-invent) our processes to become a national player.
David P. Mead, President and CEO of The Mead Consulting Group, Inc., has 30 years of experience growing technology, healthcare, education, manufacturing, distribution, and services businesses. The Mead Consulting Group, Inc. http://www.MeadConsultingGroup.com, founded in 1981, specializes in working closely with the CEOs and business owners of mid-size companies (revenues from $10M to $250M) to help them create value and leverage business strengths to take their companies to the next level. Mead Consulting, with headquarters in Denver, has over 40 senior consultants focused on Colorado-based businesses.