The concept of commoditization refers to the process by which goods or services become relatively indistinguishable from similar offerings in the eyes of the consumer. When applied to the collection of delinquent HOA assessments, the commoditization process can be seen in several ways:1. Standardization of Procedures: With advancements in technology and the establishment of best practices, the methods used to collect delinquent assessments have become more standardized. This means that regardless of which agency an HOA hires, the procedures followed might be quite similar. 2. Automation: Modern software has enabled automated billing, notifications, and reminders for homeowners who are behind on their dues. This automation reduces the human touch in the process, making the collections process more of a routine commodity. 3. Competitive Pricing: Due to the standardized nature of the services, many collection agencies compete primarily on price rather than the unique quality or approach of their services. This drives prices down and makes the service more of a commodity from a pricing perspective. 4. Lack of Differentiation: If most collection agencies are using the same methods, software tools, and strategies, it can be challenging for an HOA to distinguish one agency’s service from another. This perceived lack of differentiation further pushes the idea that collection services are a commodity. 5. Regulations and Laws: The legal framework surrounding the collection of delinquent HOA dues can be strict and standardized in many jurisdictions. Collection agencies must operate within these legal boundaries, which can limit the diversity of tactics and strategies, thereby contributing to commoditization. 6. Bulk Services: Some larger agencies might offer bulk collection services, treating multiple accounts as a single batch, further giving the impression of a commodity where individual accounts are just part of a larger group.
However, while there are elements of commoditization in the collections industry, it’s essential to recognize that differences still exist. The quality of customer service, the success rate of collections, the ethical considerations, and other factors can distinguish one agency from another, and whether they should be considered a commodity or a service. Over the next few weeks we will be taking a closer look at each of these points above individually, addressing how Equity Experts stands out amongst the crowd when competing with other collection agencies. We provide a valuable service at no out-of-pocket cost to communities, and our industry-leading resolution rate and success rate mean faster recoveries and fewer legal actions to enforce the recovery of delinquencies.