The increasingly digital consumer -: Implications and strategies for the debt collection industry

Digital Debt Collection: The way of the future

Let’s take a quick look at the evolution of customer engagement in the debt recovery industry to better understand where it’s headed in the future. Phone calls and collection letters were the standard form of customer communication not so long ago.  With cell phones becoming ubiquitous, consumers began screening calls, resulting in low right party contact rates.  For instance, 75% of millennials avoid phone calls as they are time consuming.

Changing consumer behavior calls for new strategies. Digital Debt Collection enables consumers to engage with companies – from the privacy of their homes – on a channel of their choice and at a time convenient to them. Under this model, customer service associates are still available to support consumers, but only if they choose to avail their assistance. Most importantly, the digital approach empowers consumers to manage their debt based on their financial situation, in the way that works best for them, using self-service options and payment portals.

How can businesses future-proof their collections operations using a digital-first solution?

Three effective strategies for the digital age

1. Meet customers where they are: It’s clear that as consumers become more tech savvy, user-friendly channels will be top of mind. Omnichannel engagement – spanning Email, Text, and Chat – is therefore a must-have for outbound communication in today’s digital-first world. It enables contextual interaction across channels, allowing customers to seamlessly pick up conversations where they left off. It also ensures privacy. Consumers don’t have to speak to an associate on the phone, if they don’t want, making it easier for them to avoid embarrassment and settle accounts as their financial situation permits.
   How to make the most of it: In addition to deploying omnichannel engagement, promote your app or payment portal via text messages, shepherding consumers to where they need to go and driving engagement and interaction in the process. The result: 10X engagement.
2. Put customers in control: Providing consumers with a choice of engagement channels is not enough. As businesses across industries such as retail and hospitality raise the bar on digital engagement, consumers have come to expect the same from debt collection companies. This means empowering customers with complete flexibility, including allowing them to build their own payment plans and make incremental changes over time in sync with their changing financial situation.
   How to make the most of it: Deploy user-friendly apps and payment portals to create secure, engaging and personalized experiences, making consumers feel like they are in total control of their life. Promote your portal through hot links and text messages, making it easier for consumers to repay their delinquent accounts.
3. Serve customers holistically: Don’t stop with putting your customers in control. Take it a step further – envision serving your customers as individuals with unique needs. Empower them with tools that go beyond custom repayment options, helping them better manage their finances and lead a richer and fuller life.
   How to make the most of it: Get creative with the types of payment options you offer and offer specialized services such as dispute resolution and special circumstances support. Provide value-added tools such as FAQs, budgeting and credit building to help them better navigate the situation emotionally as well as financially.