During the pandemic, many businesses paused debt collection, waived interest and reduced prices for customers facing financial difficulties. But debt collection is resuming – not least because many companies need to improve cash flow in order to stay afloat.
Like all good strategies, there are 2 key components to effective debt collection:
2. Customer experience (CX)
Here are 5 ways to improve your debt collection rates by boosting efficiency – while keeping CX at the heart of your approach.
1. Centralise data
Data is key to an efficient, customer-centric debt collection process. The more you know about each customer, the more you can leverage automation (boosting efficiency) and personalise your approach (improving CX).
How do you achieve this? By creating a centralised customer information hub. This allows all staff to view accounts on the same database. It prompts collectors to review accounts, and it triggers alerts when problems arise. When properly set up and maintained, the system has all the information available on every receivable – easily viewable and searchable by manager. This minimises both costs and time spent on accounts.
But data is only useful if it’s accurate, which means your central hub should pull in the latest details from all your systems. For example, Engage Hub can sit on top of your existing solutions, orchestrating data to give you a single customer view. That way, account managers have access to everything they need to deliver exceptional service – including the latest customer information, outstanding balances and communication preferences.
2. Proactively support struggling customers
One thing we’ve learned from the pandemic is the importance of supporting vulnerable customers. And that includes the financially vulnerable. When you have your hub of centralised data powering collections, it’s easier to identify red flags and offer proactive support.
Another tactic is to offer flexible payment options, for example by letting people pay on a day that best suits them. This can help customers avoid debt in the first place. With your central information hub in place, it’s easy to keep track of these personal preferences and factor them into your collection process.
3. Identify the best communication methods – and then automate
The first step of effective debt collection is communicating with your customer. And, as with all customer communication, it’s important to personalise, picking the channel that works best for each individual. For many people, that may be SMS or email rather than phone, because those with long-term debt are often wary of unknown numbers.
Once you’ve identified the best channels (and not all customers will have the same preferences), the next step is to automate as much of the process as you can. For example, automating payment reminders makes the collection more efficient, freeing staff to focus on more complex tasks. Plus, by introducing automation into the whole payment communication cycle, you can increase the likelihood of people paying on time (thereby helping prevent customers from getting into debt).
4. Implement a multi-channel payment approach
A multi-channel approach makes it easier for people to pay. If you text a payment reminder, customers should be able to pay straight from their phone using an online portal or app. If they have to log on to another device or phone your call centre, they’ll be less likely to follow through.
Tailor the channel offering to each individual based on what you know about their preferences. Some may prefer digital self-service options, while others will respond better to letters or would rather speak to an adviser to set up a payment plan.
5. Make every payment option easy
It’s no good offering multiple payment options if each one is time-consuming or complicated. Make sure customers can access their chosen method when they want, how they want and as efficiently as possible.
For example, many customers prefer to set up payment plans discreetly – they don’t want to explain their situation to multiple people to get directed to the correct department. Intelligent Payments IVR solution by Engage Hub automatically routes customers from your existing IVR system to your payment solution when people ring up. This makes it easy for people to pay at a convenient time while maintaining their privacy and your PCI compliance.
Create a unified debt collection strategy
Ultimately, by creating a debt collection strategy that looks holistically at customers and their payment cycles, you can increase debt collection rates – delivering a friction-free and personalised CX.