A Competitive Advantage Is Essential

In doing research for a client this week, I found something strange is going on.

I called a number of debt settlement companies and found that they’re basically all doing the exact same thing.

I called 5 of the largest companies and asked them all what their fees were and what made them better or different than the other companies in their industry. I selected these 5 because they have the largest numbers of International Association of Professional Debt Arbitrators.

Most of them charge 15% and a couple charge a monthly fee on top of that.

When asked what they do better, they all pointed to their size and how much debt they’d settled recently. One had stats on customer satisfaction and another said they exclusively used attorneys for negotiations. I’m not sure whether credit card companies care that they’re talking to an attorney or not. A settlement is a settlement and my understanding is they look at the past history of the account, the person’s ability to pay and what kinds of quotas they need settled.

Another company bragged that they were the most expensive and the Mercedes of the debt settlement industry. When pressed, they didn’t have a good answer as to why they were charging more though.

One company even told me they settle 80% of all the consumer debts that get settled. I clarified to make sure he wasn’t meaning they settle for 20 cents on the dollar. No, he meant they settle 80% of the debts. He said they settled $30 million last month. I said I’d just spoken to a company that claimed to have settled $27 million and so $30 million couldn’t possibly be 80%. He didn’t have a response for that.

How do you become the top 5 companies in an exploding industry without a clear competitive advantage? I supposed there’s so much business out there right now that they’re getting by just fine without one.

One of these days some company is going to come up with something that’s going to obliterate the competition once consumers start shopping around. It’s not always going to be like shooting fish in a barrel.

For now, being able to document a high customer satisfaction and be friendly on the phone make you the clear winner.

PS. If you’re looking for debt settlement services, the company that had the high customer satisfaction rating was also the only company to not try hard sales tactics on me. If I were in the market for debt settlement, I’d call Marty at Freedom Debt Relief. His direct line is 1-800-544-7211 x16277.

11 Responses

  1. Unbeleivable isnt it..they are no better than the sharks out there that let you get into such debt in the first place so that they need to secure the services these agencies…very sad!

    Thanks for sharing your research..

  2. I don’t know, I don’t think they are all bad or sharks…I actually called a debt relief place that ended up just showing me how to do it (negotiate my credit card debt, basically) on my own. Specifically I spoke with Porter at Rise Above Debt Relief out in Arizona and he was super nice. His honesty with me made them the winners in my opinion.

  3. My experience with the management at one company was that they genuinely cared about helping people get out of debt and start their financial lives over again. They accepted that their industry has had a bad reputation but they feel like that’s changing now.

    Another misconception is that if you only care about making money, the best way to do that is to do something less than ethical. The truth is that’s short term thinking. If you want to be profitable long term, you have to build a good reputation and provide a better experience than the next guy. If you don’t, someone else will.

    I think the shark like attitude of many sales people is due to inexperience and lack of training. They’d probably change their tactics if they knew how much more money they’d make by treating people well and helping people buy instead of hard selling.

  4. I am pretty much new in debt or finances but after reading i think it is not simple as it seems . First they give credit to make a debt and then they take back with so much more and if we not pay we end up settling … That is very rude.. but there are people who earning from it.

  5. What an interesting set of comments definately food for thought. I love the idea of asking what their perceived values are. What makes them different, following up these questions is always interesting love it keep up the good work

  6. During a money crunch once, I talked to the credit card rep and told him I wasn’t able to make my payments. Somehow he managed to get me to say something like “I was totally unable to pay my bill.”
    I could almost hear him sigh with relief. He said he would close my account and I could pay off the balance with no interest. (I think I just let the cat out of the bag.)

  7. As with all businesses, you definitely need a competitive advantage I agree. How is this gained however? Well, generally through a unique selling point in order to gain you market share – without this you’re unlikely to differentiate and succeed.

    What really interested me however is your NLP marketing blog overall – I’d never heard of NLP being mixed with marketing before? Will be having a read over your other posts, and look for some books on the topic when I’m next out shopping.

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