How Aaron Reiter Helps Businesses Unlock a Forgotten Profit Lever

[00:00:03] Hector: Hello and welcome to another episode of the How to Scale a Business Podcast. My name is Hector Santhe Esteban, and I am your host for today. Our special guest is Mr. Aaron Reer.

[00:00:12] Hector: He is the managing partner at Adler Wallach and Associates. And, well, we're gonna talk about all sorts of, business dev. So Aaron, welcome to the show.

[00:00:20] Aaron: Hey, thanks for having me. It's exciting.

[00:00:23] Hector: well, I'd just love to hear your story because on the outside, what your business does, what you guys do and how you guys do it are two totally different things. And so I'd love to get into, how you got into what you're doing, but then more how you guys are, we're gonna talk about how you guys are really separating yourselves and differentiating yourselves from everybody else in the industry.

[00:00:42] Hector: So, just catch us up a little bit on your background, your experience and like what were some of the, key stops along the way.

[00:00:48] Aaron: Sure. I mean, if you start from the beginning of education, graduated from WSU with a communication degree in advertising and a minor in social psychology, and then realized I had just kind of tuned myself for a life of sales, which was fine. I did all right in it and I spent time in wireless infrastructure and 13 years in medical sales, in devices and surgery.

[00:01:15] Aaron: And then eventually landed, a position with Interpros, which I am currently a managing partner of as well, which is a software company, serving. The arm vertical or accounts receivables management, which is more words than you need to use for debt collection space or, debt recovery. and if I'm, you know, completely honest with everybody who's listening, I didn't expect to like it.

[00:01:42] Aaron: I had the same preconceived notions of what that industry entailed and what it, might mean to me professionally as, anyone else would. And everybody who's finds a career in that recovery jokes that nobody dreams as a child of being a debt collector. but what I found when I got into it and was serving this, community, was that most of the businesses are family owned, legacy, owned, passed down from grandpa to a daughter or a son, and then a grandchild.

[00:02:14] Aaron: And so everybody's very. I don't know, matter of fact about, you know, their background and their education and their, role in society, which they're simultaneously frustrated that society doesn't quite recognize the role that that recovery plays in the economy. But, objective about.

[00:02:35] Aaron: the overall sense of what the industry does. So it's a lot of education. It's a lot of trying to own it and be an educator to, folks that maybe have a, a negative view of it. But like it or not, it's an important component of a functioning economy.

[00:02:51] Hector: Are there businesses that aren't even turning this profit lever or aren't even pulling this profit lever that, could be, that are missing out on it, you know, whether that's the size of businesses, a certain industry.

[00:03:03] Hector: you know, what was just interesting is sort of how you approach, the idea of debt collection and, why it made so much sense for a business to, pursue that avenue of revenue. So can you talk about, that and maybe the, perspective of someone who might not even be considering this, avenue of business

[00:03:20] Aaron: Sure it's not uncommon for a business owner or. even a marketing department or, PR department to worry that sending consumers off to, a third party recovery entity, will reflect poorly on the business, in some fashion. And that could take the form of reviews or just, you know, kind of general, zeitgeist, reality of the scenarios typically are that these accounts or commitments to the business are well documented. The consumers know that they still owe that amount to the original creditor or, the business and it's not, and approached in a way that isn't, Aggressive or, you know, offensive in some manner. It's a collaborative process. Hector gone are the days of the agencies that approach people with a heavy hand. the folks that. Were aggressive or, made people uncomfortable, have largely been regulated outta business.

[00:04:22] Aaron: This is one of the most regulated industries in the United States. and the rules, the for engagement are clear. And onerous. So very strict guidelines for how you are both, you know, announcing yourself when approaching a consumer. As well as how that consumer's experience is to, you know, kind of roll out, lots of options are available to them and.

[00:04:48] Aaron: Typically there are more options for resolving the debt once it goes off to a third party than there were initially with the first party. So businesses that are concerned about that, the optics of it, while we understand it, it is, you know, primarily an education process. And we're, you know, we're having these discussions with folks and it's like, look, most of these counts self resolved through a consumer or self service application.

[00:05:10] Aaron: At this point, you may give them. You know, some form of digital, outreach cell phone through text messaging, email, give them a hyperlink that logs 'em into a, consumer application. They can see all their documentation. It's branded consistent with the client. it's a pretty seamless process.

[00:05:28] Aaron: So, usually, once the consumer is, or sent over maybe a test batch of them or something. They don't get any complaints. They get resolution to accounts. That goes away.

[00:05:41] Hector: it just seemed like, you know, for businesses who have these, contracts and this revenue that they had written off. That was gonna be, you know, essentially a write off.

[00:05:50] Hector: It's an opportunity there for them to go recoup some of that. and with agencies like yours, I mean, it's, a pretty sort of win-win sort of scenario. perhaps a lot of businesses or newer, businesses or, you know, entrepreneurs who have some, quicker success don't know that these sort of avenues and routes are even out there perhaps.

[00:06:09] Aaron: Yeah. And when they charge it off, you're right, that stuff just hits the books. See, if we circle back to the earlier point of the role that this. This industry plays in the economy. the a CA is a, a national trade organization for it, and they did, they ran a bunch of numbers and figured out that per capita in the United States, the debt collection industry as a whole returns almost $400, to consumers pockets that would, or that would otherwise have to be reflected in raised prices, from.

[00:06:40] Aaron: The organizations that serve them. So that's just when you're recovering just this, you know, kind of fraction of what's being sent over to third party debt recovery. So yeah, charged off, it goes away forever. You send some stuff over and you say it is charged off when you send it over.

[00:06:56] Aaron: 'Cause most third party debt has been, taken off the books. Then it's money from the sky that comes back. and as you said. Kind of everybody, benefits in that scenario. The agencies don't get paid until the debt is recovered. The commercial entity that, extended the original credit, gets that money returned.

[00:07:15] Aaron: It comes back into the business and the consumer, their account is resolved they can go on to continue to be, served by that entity again. 'cause they're straight, their credit is, secure. there's a lot of good things about it.

[00:07:28] Hector: Yeah. Is there certain types of businesses or certain types of industries that this works well for that you found.

[00:07:38] Aaron: Well, it's, its face at the macro level. you're more successful with groups that, say the purchase is a luxury purchase. It means that the demographic typically has, money slush fund of some kind. Recovery rate's pretty good on those.

[00:07:54] Aaron: And that might be, tissue storage, or, A roofing, things that are, are required to, you know, stuff, that costs money, but you've got the money to spend on it. And for whatever reason, the, the bill's outstanding, Some of the stuff where there are actual like, life altering consequences to not recovering or not getting, resolving the debt like with, a department of licensing or something.

[00:08:16] Aaron: Then you've got this, you know, thing and the Department of Licensing can't figure out how to get you to resolve it, but if you don't pay it, you don't get your license renewed. That has a really high recovery rate. Utilities, you know, those, kinds of things. And then you get down into other fields like bail bonds or, where folks are in a demographic where money is tighter.

[00:08:37] Aaron: those tend to recover less. It's funny when we get questions of what's your recovery rate? Well, that's such a subjective question that, The return questions then start, well, what kind of debt is this? You know, what is the average balance? Who are we talking about? So complex answer to a simple question, I think is,

[00:08:57] Hector: Yeah. you know, one of the things about the show that we've tried to do is. Help businesses who have, gone through these stages. A lot of 'em go through this early entrepreneur solopreneur stage, and they sort of figure it out and they're, this cook that turns into a chef and all of a sudden the head chef.

[00:09:14] Hector: is no longer in the kitchen anymore. And you know, these chefs out kissing babies and, designing menus and it's a, totally different job than what they were doing when they were getting started and they almost don't know what they don't know. And so that's why I think something like this is so valuable because It's probably one of the oldest industries around. And yet, you know, for somebody who is in that space where they started a business in the last seven to 10 years, you know, they might have missed that part of their education or, or I don't remember, you know, in all my schooling and getting a marketing degree or a entrepreneurship, no.

[00:09:52] Hector: Ever, ever talking about, you know, this sort of avenue or, you know, talking about your receivables and how that, you know, plays into your business. So I, I just think opening, business owners', eyes and executives to possibilities is, so important.

[00:10:05] Aaron: It is, and I think one of the, major components of it is that ultimately you don't wanna lose the customer for repeat business. You know it, it's way more common than I'm alluding to, but I would say that it is rather common that you want that repeat business from a, consumer.

[00:10:20] Aaron: If somebody gets sideways with their Owings, you're not gonna do business with them again. But if they resolve it with you, boom, they're back on the list. I mean, think about grocery stores, for example. Grocery stores have a notoriously thin margin. And there's always one across the street, right?

[00:10:35] Aaron: So they bounce a check at, you know, grocery store a and grocery store. A They don't wanna go back in. They bounce a check, right? So they've stopped going to that grocery store, even though that grocery store is like, Ugh, it was only a $17 check. Like, get back in here. So that. If you can remove that psychological impediment, you know, for the consumer.

[00:10:56] Aaron: 'Cause it's working both ways, guys. So it's not just you who is reticent to do business with them again. They're also embarrassed or uncomfortable or worried, you know, or, whatever it could be, you know, that there's a lot of stigma around this from both sides.

[00:11:13] Hector: Yeah, that's a great point I hadn't even really considered that. It, definitely goes both ways in that regard when we get back from break. Aaron, I'm curious about how you guys have differentiated yourself. like One of the oldest industries in the world, and yet you guys have found ways to be innovative and you found ways to, you know, evolve with sort of the industry. And so I'd love to hear about some of those and, how you guys have sort of evolved as the industry have. And so we're gonna get into that right after this quick break.

[00:11:41] Hector: Hey y'all. Today's episode is brought to you by Amplify Media and we are a content and podcast production company. What we like to think of ourselves as like the media entity for your business, because chances are you probably have a product, a passion, a mission, a message, some sort of service that you're trying to get out to the world, but you might not have the time, the team or the tech skills to be able to do it.

[00:11:57] Hector: Or if that's the case, we can help. Go to amplify media.com. That's A-M-P-L-A-F-Y media.com. You can also check the show notes for the link. And with that, let's go back to Aaron. So Aaron, when you look at how you guys have tried to, you not only stay alive, but be on the cutting edge or, really, you know, remain at the forefront of the industry, before.

[00:12:20] Hector: We talk about some of the, tactics and some of the, how you guys have done it. Talk to me about some of the, maybe just your general perspective or, you know, just some of the, the higher level strategy that you guys try to employ. When looking at an industry that's been around for so long,

[00:12:35] Hector: I.

[00:12:36] Aaron: I mean, that's probably more insightful of a question than you realize. this industry, is largely behind and it's always been behind It's behind because it is so conservative in its approach, mostly because of the amount of regulation that's been imposed upon it. So, historically until actually relatively recently, there have been a lot of competing regulations.

[00:12:59] Aaron: So you could be in compliance with one, but by complying with that, you're in. Conflict with another one. So there was always a way for an attorney representing a consumer who was particularly, aggressive with the agency for them to sue. And so recently a lot of that was unraveled and, the attorneys have had to kind of rework to be more creative.

[00:13:20] Aaron: But, it has been historically very, very difficult for an agency to stay compliant. And because of that, difficulty in staying compliant. They just haven't adopted new techniques. They've been scared to send text messages, scared to send emails. You know, everything's gotta be a paper that gets printed and sent off.

[00:13:39] Aaron: And letter costs are obscenely expensive. When you been taken an aggregate. So especially if you have an agency to say the recovery rate of liquidation is. 15%, you know, they're doing pretty okay. Well that means 85% of the accounts had letters go out at nearly a dollar each. Right? That adds up, especially if you've got millions of accounts coming in.

[00:14:04] Aaron: These recent shifts, towards digital communications have completely changed the expense landscape for the agencies, those that have adopted it. And I, went on the software side at Enterprises. I still talk to a lot of prospective customers who still can't get outta their own way.

[00:14:22] Aaron: They can't, Adopt these things 'cause they're scared of 'em. Or they've got an attorney who's not up on the recent law changes and they're still cautioning against it, you know, and they're like, well, our attorney says, As a representative from a software company that is so forward thinking and perpetually pushing out new.

[00:14:41] Aaron: Versions of the system, you know, like upgrades come out every month and we're, you know, putting generative AI in it and we're, you know, maximizing digital communication strategies to have these conversations still today, in 2025, is just sort of emblematic of this, hyper conservative market where folks just, they don't care to learn the new stuff.

[00:15:03] Hector: And is that. A mindset shift? is it a a practice shift? you know, is it in their systems? Like are they lost? Cause at this point, because, I'm just, you know, trying to figure out how you help someone through that, if they're sort of stuck in an old paradigm.

[00:15:23] Aaron: Oh yeah. I mean all the above mindset systems. Practice. All those things have to change. You start with the mindset, though. I mean, this is where, is about education. And are they gonna trust the sales guy who comes in and says, no, it's okay to text, I swear. No. So it becomes, well, who's the thought leader that they pay attention to that they'll actually believe, you know?

[00:15:44] Aaron: Well, so who's your, have you seen so and so speak at a conference? Yeah. How about I put you in touch with them? and they're more than happy, you know, typically, because even covered, like one of the aspects of this, this entire industry is just how collaborative it is. 'cause it understands, you're all in this together as a, an entity.

[00:16:05] Aaron: And it's, it is so unique in the approach in that you have both, the client that gives you the opportunity for revenue, but they're not paying you and the consumers over here who actually hold the money.

[00:16:20] Aaron: Right. And they're the ones that have to. Send the money in in order to pay the, client's account volume. And you, so you, walk in this middle space where you have these two parties who with diametrically opposed goals and you kinda make 'em both happy. And I have never met people in my professional life who are more in tune with the human animal then.

[00:16:41] Aaron: The debt recovery market, right down from the collectors to the agency owners. They understand human behavior better than anybody I've ever met. But it sort of lends itself to this hyper conservative space where I know what works, what has worked for years, and they haven't really kept up with the changes in society as.

[00:17:03] Aaron: Digital devices have changed attention spans, communication styles, and you know, how we consume information from, just learning about something to getting more evidence of it. The bar is much higher now. people need to see it. And they don't really want to talk to a person, so.

[00:17:23] Hector: Well, it's interesting that as you talked it out, it makes sense that the education and the mindset is so important because there's so many downstream decisions that are sort of gonna change. You talked about the texting, you know, email. Like everything is so different once you kind of take this new path that,

[00:17:41] Hector: without that education or without that mindset shift, you're bound to get stopped or you're bound to run into, to implementation roadblocks or run, run into challenges with integrating it because there's so much to change.

[00:17:54] Aaron: you're right. And a lot of 'em are on legacy technology that, you know, they're using as the base of their systems because of their inability to, adopt new things. and it's a really disruptive process to go through, which we do for a living. So we have that conversation all the time.

[00:18:09] Aaron: But if you decide to adopt a digital strategy of some kind, whether it's email or whether it's both email and text messaging, and then you run into the roadblock of, how am I gonna integrate this into my process? I. You know, right now I send out letters. Well, then I get a template for this, and how do I get the template populated with the database fields and, you know, so then it becomes an integration of some kind.

[00:18:29] Aaron: And is it real time or is it batch filing? You know, what does that mean to me from a business perspective? So there's just a lot to do and to, plan for, in order to make sure that you're a staying compliant, controlling your costs. And serving the, consumer in a way that they want to be served.

[00:18:48] Aaron: there's a lot of components to it.

[00:18:50] Hector: I'm intrigued by this. Notion that you talked about of people in the space understanding, you know, human psychology and behavior. And so given what you've been able to learn and experience, I. if we had to pluck you out of this industry and put you into some other one, name it, you know, what sort of things do you feel you would carry over?

[00:19:14] Hector: Or what sort of things do you feel, someone who's not in your industry or space might be able to glean from the, that sort of insight or that sort of understanding that you guys have developed within the industry?

[00:19:27] Aaron: Oh, that's an interesting angle. if we're talking about B2C, I think one of the, major takeaways is new consumer, especially the younger consumers desire to self-serve, and to do it. At any hour a day. Right? So investing in the infrastructure that gives them the ability to self-serve, feel educated about a topic, and then handle it themselves so they don't have to interact with anyone.

[00:19:53] Aaron: that's a growing percentage of, our interactions as, you know, people age, and the Gen Z and the millennials become a, larger component of. the overall outstanding debt value. if you're we're going B2B, then a lot of the sales strategy has changed.

[00:20:13] Aaron: Cold calls, if we're talking about the sales side, cold emails they don't work. Everybody's inboxes are so inundated. Nobody trusts a phone number. They don't recognize so unless you're calling a number associated with somebody whose job is to pick up the phone from phone number's in a recognized, you're not gonna reach a decision maker because they're just gonna let it go to voicemail.

[00:20:36] Aaron: And probably not even have a voicemail box that isn't full. 'Cause they just wait for the text message or the email. So the B2B strategies, seem to be shifting back, to that in-person, conversation. And whether that's, you know, meeting and trade associations or through networking groups or whatever, the expenses that we have.

[00:20:59] Aaron: Made on, those in-person events have far and away exceeded the return that, digital outreach has done. that was great for quite a while, but now everybody's doing it and you're overwhelmed. I can't even tell you how many I get in my inbox. I just put 'em in promotions.

[00:21:16] Hector: Right. what are your guys' thoughts on, AI and voice ai? My question to you is how are you guys looking at that and are there regulations around it or what, you know, what's that been like in your sort of

[00:21:28] Aaron: Oh yeah. , The AI trend. I mean, it's in integrations that modify things like, you know, text or it's interactions with consumers or it's, assisting with. Report building. I mean, these things are amazing and the companies that are refusing to get involved or just think that the small businesses that don't think that they have the technical wherewithal to do it or haven't explored the third parties that can help them do it are hurting themselves.

[00:22:00] Aaron: This is the future. Now, if we talk about specifically on the voice side, there's a lot of impressive things that happened with the voice side, and it's, changing so fast that we're having trouble keeping up. Honestly, there are some rules, that are already in place. Now.

[00:22:14] Aaron: Inbound calls, for example, could be handled by an AI agent. Traditionally those have been, if this, then that. Response structures where you gotta build in every response, and it's keyed off a very explicit word, combinations. Now what we found, or what we're finding is that the new generative ai, where it can actually interpret, you know, based on subjective values or what you're, you know, kind of telling it.

[00:22:44] Aaron: And then make those real time conversational pivots to provide the consumer with account level information that it has right at its metaphorical fingertips. Because it's API tied into the software that, consumer is now interacting with. The experiences are fluid and polite and eternally compliant.

[00:23:08] Aaron: And it'll never get mad and it'll, it'll never get frustrated. It'll, like, I mean, from a business owner's perspective, like you're like, oh my God, like, that's amazing. this interaction that I just, you know, replayed the voice, you know, recording of everything I would want an agent to do.

[00:23:27] Aaron: You know? Now on the flip side, calling out There's some gray area there. And we're not at a point culturally or legislatively where that's, you know, something that folks are gonna adopt right away. But inbound, I mean, sky's the limit. And then you run into how is my database and software structured If it lives on a server down the hall, that's.

[00:23:54] Aaron: Probably making a weird noise at this point because you've had it there for so long. There is a straw, with that thing that leads off to the server in the cloud where the AI lives, and there's lag as a result, and the consumers won't tolerate lag. They will hang up. they can be completely comfortable with the interaction if they're told upfront that this is an AI interaction.

[00:24:17] Aaron: As long as that interaction is snappy, I. But the minute that they gotta wait and I'm talking fractions of a second, everybody, they're out. So,

[00:24:29] Hector: Yeah,

[00:24:30] Aaron: yeah, it's really

[00:24:31] Aaron: interesting.

[00:24:32] Hector: I don't think our algorithms or our social media feeds are making that any, necessarily easier I got one more question for you, Aaron, but before I do that, if people want to find about, about you, what you guys are up to, where's the best place for people to go, and get that info?

[00:24:51] Aaron: Oh, I know me specifically. You can find me on LinkedIn. But, if you wanna know more about the agency that we've been tuning to be modern and, you know, efficient really play to the consumers, desires to be interacted with and, and, collaborate with them to retain them as customers For the client, that's at adler wallick.com, And then on the software side, where I spent the last eight years, and became an owner, is@interpros.com. And that's, the debt recovery software, cloud-based debt recovery software that serves Adler Wallach we didn't even get into that story of how we ended up without wallet, but, essentially it was a customer of ours that, was looking to move on to his next.

[00:25:35] Aaron: Adventure. So we took it as an opportunity to get a ground floor view of what our customers are going through, and it has been the best thing we've ever done for the software, and certainly got us closer to the community that we serve, which has been great.

[00:25:51] Hector: Yeah, I imagine you get, like you said, a first person perspective. There, Aaron, my last question for you is, in your opinion, what is the secret to scaling a business?

[00:26:03] Aaron: Curiosity. it's the trait that we look for in all of our employees, regardless of which role we put them in. I mean, even. Even accounting, which isn't typically a trait, but we're constantly looking for how to make things better. and look, it sounds. Trite, to say something that, that's that simple.

[00:26:25] Aaron: 'cause, you know, but it would sound equally, cliched that if I was like, hard work or, you know, resolve or belief in yourself, duh. Right? You can have all those things and be fundamentally non curious. But if you have curiosity, if you have that, desire to know things that you don't currently know.

[00:26:46] Aaron: That extends to everything. we're perpetually exploring things and whether it has to do with the technology side or it has to do with the market side, or it has to do with how people are consuming information or what's the latest thing that just came out that our consumers are gonna be asking for, our clients are gonna be asking for.

[00:27:02] Aaron: Without that relentless curiosity, we would lose momentum. That's what fuels the momentum in the organization.