Image How Repo Agents Evaluate Lenders

How Repo Agents Evaluate Lenders & Forwarders – A Look Into an Agent’s Metrics

Guest Author: Jeremy Cross

President at International Recovery Systems


Recently, I have had the opportunity to travel to various repossession related events, and in attendance were many lenders, agents and forwarders. Of the many conversations that took place, and there sure is a lot of them, one kept popping up- how do you evaluate your clients?

Over the years, International Recovery Systems has established a reputation of having an extremely analytical approach in to how measure profitability and, ultimately, allocate our resources.  As a company we live and die by our reports. We don’t just use reports to generate “feel good numbers”, we only use actionable reports that drive the company.  I have also devoted a lot of time educating other agencies on this approach.  Today, more agencies than ever are carefully evaluating their client portfolios and making appropriate decisions based on the data.

Actionable metrics are ones that not only tell you if you are having a problem, but also tell you where to look. The metric that we use more than any other is the Total Revenue Per Assignment.  By looking at all sources of revenue, we include not only our repossession fee but also ancillary fees such as key cutting, storage, redemption fees, personal property fees and transport.  This metric also factors in the average recovery rate on the portfolio which is very important.

It is very important that forwarders and lenders understand this perspective because paying a competitive repo fee does not necessarily make the business more attractive to us if the fees paid for ancillary service is well below market.


Revenue/assignments = Revenue per assignment

Why do we use this number as opposed to revenue per recovery?  This metric considers other variables that revenue per recovery doesn’t, such as repo % and days to recovery.  Here is an example:

Client A

  • 10 assignments
  • $1,000 per repo
  • 20% recovery rate
  • Revenue per assignment $200

Client B

  • 10 assignments,
  • $400 per repo
  • 60% recovery rate
  • Revenue per assignment $240

Even though the average revenue per repo much higher with Client A, the low recovery rate actually makes the revenue per assignment significantly lower.

The client that might have an average repo fee but has an above average repo % will always win out against the other client that may pay higher.  Any business decision we make, we look at the assignment volume- from staffing our Customer Service staff, to expanding our footprints, every decision is based upon assignments.

This is the core principle for IRS, and many other agents, when evaluating client profitability.

Using 4 clients chosen at a random, we have compared them side by side.  The key metric being the revenue per assignment. Below is a side by side comparison, using this approach, for four different clients.


chart-how repo agents evaluate lenders


The scorecard above shows that although days to repo are the longest Client D is the best performing for revenue per assignment.  That is because of a combination of high repo percentage and higher revenue per recovery.

Most importantly however, this shows who the least performing Client is (Client B) and although the average days to repo, and the revenue per recovery is the second highest, the repo % is so low that it more than offsets the positive factors. Based on our minimum thresholds, we will likely discontinue doing business with Client B.

Agents and clients must understand that the most expensive assignments we work are the ones that don’t get picked up.  Clients that represent the lethal combination of low recovery rates and low fees are not likely to get much attention from the better agencies in the marketplace.

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