“Make new friends, but keep the old,” a phrase that has been ingrained in most of us since childhood, seems to elude businesses in the present day. Why is it that so many corporations and businesses overlook this age-old mantra and lose touch with the “old” relationships? In an age where the average attention span is decreasing rapidly and society yearns for the “next new thing” it makes sense that the philosophy has shifted to reflect quantity over quality. Yet, is there anything to be said for “keeping the old” so to speak?
There are many reasons why a company can lose track of older relationships. For one, the sheer number of options available to the consumer have sharply increased over the years, making it that much harder to truly hold the consumers’ attention once you have it. In the unclaimed property world, falling out of touch with these relationships tends to result in dormant accounts and eventually, the abandoned (or “unclaimed”) property associated with them must be remitted to the state – and just like that, the relationship and the revenue are both lost.
Even before accounts are lost to the state, the amount of time that an account has been dormant should raise a big red flag to take a deeper dive into that relationship. Overlooking this step can be costly, as was the case with Vanguard1 (although this is hopefully an extreme case). In this case, the company was reporting most of its unclaimed property, but certain accounts were overlooked, and in turn, those relationships failed to receive the attention they deserved in terms of outreach and retention. When an employee realized this flaw in the system and alerted the company, the company simply stated that saving these accounts was not a “revenue generator.” The employee’s idea to send out a mass call or email to prompt the owner to call Vanguard was disregarded.
The employee ultimately took the wrong path, and embezzled approximately $2.1 million in dormant fu nds. Only then did Vanguard take note of the consequences of its indifference. If they had taken the proper steps to save those relationships in the first place, they could have been spared the reputational risk and PR nightmare that later befell them.
Proactively ensuring unclaimed property policies and procedures are in place can ensure compliance and minimize the risk of exposure in escheatment; keeping visibility of the accounts high, such that no opportunity exists for employee’s bad actions to divert funds, as occurred in the Vanguard example. At Keane, we have worked with some of the largest organizations to provide consulting services, ultimately ensuring companies have the right solutions in place to allow for compliance and best practices to be achieved and maintained.
Knowing where to start can be difficult. Our first step is to conduct reviews of your company’s escheat reporting practices, policies, and procedures to determine the right strategy. This is also the first step in ensuring your company’s compliance with all applicable laws, while also ensuring that internal unclaimed property practices are practical and effective. We will ensure that you’re reporting what you must, while taking advantage of cost-saving opportunities through the application of allowable exemptions and deductions.
In addition, companies can take proactive and preventative measures to locate customers and shareholders, minimize the risk of their assets being turned over to the state, and maximize the value returned to them, while restoring relationships with dormant shareholders. At Keane, we have worked with some of the largest organizations to provide customer retention & communication services, ultimately returning over $8.5 billion in assets to over 1 million individuals; restoring those relationship and fostering growth. With the probability of selling to an existing customer being 40% higher than selling to a new prospect2, reconnecting customers to their dormant assets can be a revenue game changer.
Making sure your company is in compliance and accounts are reported correctly can help you maintain those relationships with customers by making sure their accounts are being taken care of properly; and a comprehensive unclaimed property program of strong policies and procedures can avoid exposure to internal liabilities such as the Vanguard scandal. Remember, “one is silver and the other’s…” well, you know the rest! Stay golden.
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