Many industries have had to rethink their strategies as a result of the changing environment. As we know, the level of personal debt is set to rise and the number of consumers falling behind in payments is growing with household debt of all types is forecast to rise from £2,006 billion in 2020 to £2,354 billion in 2025.
Many customers have had to turn to private financing or government schemes to try and stay afloat. This has also meant that regulators have had to be aware of the pandemic’s financial impact and the potential increased risk this would cause to vulnerable customers. But given the rate of customers that are under pressure and exhibiting vulnerability traits, how can the industry adapt and engage with customers in a more thoughtful and customer focussed approach?
Well, the good news is that the response from the business community has been a shift towards putting the needs of customers first. Which we can see in many of the adverts on TV and on lending websites, where the tone has shifted. So, how can you make debt collection a gentler and better customer experience?
It is evident that customers are in dire need of real support from their lenders and a more personalised approach to collecting payments. Financial institutions are expected to act in a customer-centric way.
Accepting that the one fits all approach is no longer a fit for purpose is the first step. A customer that has fallen on hard times and is struggling financially is totally different to a customer who was on holiday for a couple of weeks and didn’t make a payment. Two totally different scenarios that need to be handled differently.
Being able to tailor the message throughout a conversation to each customer’s individual circumstances is quickly becoming a minimum standard. Quickly identifying which customers are just the late payers, which are going to have difficulty paying and those that will go into late-stage debt is all possible to do. And I am not just talking about segmenting customers which is vital to any modern debt collection activity, but dynamically segmenting customers as a digital conversation is taking place. This is powerful stuff that is working today.
Leveraging the power of technology such as Artificial Intelligence and Machine Learning to craft effective digital customer contact strategies enables lenders to connect with customers through digital channels such as messaging (WhatsApp, SMS), online channels like webchat, and email. This modern approach to collections delivers a whole different customer engagement experience. A more efficient, positive and productive conversation that ultimately impacts cash flow. Digital debt collection strategies are more reliable, more effective, and less risky than traditional models that have been used for decades. No matter where you turn, the future is digital.
The days of ordering customers to ‘CALL’ to ‘PAY’ are coming to end. The initial message or greeting is vital as it will set the tone for the whole conversation. An open and supportive tone will deliver better results than a firm, instructive or directional tone.
Adopting a conversational tone in any type of engagement, especially a collections conversation - the wording of the initial outbound message, be it from a chatbot or an agent SMS conversation sets the tone. It is obvious. If a customer is struggling to make a payment and receives a ‘Hello John, we are trying to contact you, I am here to help, can we talk about how to work on your outstanding balance? ” is much more likely to result in a customer responding.
AI, chatbots and automation technology are streamlining and improving the debt collection processes but also allowing customers to be managed in a more personalised manner as mentioned above. Getting to the heart of what the customers actually mean using Natural Language Understanding and sentiment analysis to effectively manage each conversation means that you don’t have to hear the customers voice but can ascertain if a customer is struggling or showing signs of vulnerability. Clever technology like Propensity Studio is designed to optimise customer engagement using AI and automation to better manage all customer conversations, even the vulnerable ones.
And also brings to life the ‘magic’ of AI by predicting business outcomes across all digital collection conversations and guiding each customer conversation through a range of best next steps in real-time. This allows collections teams to design conversation journeys and guide customers on a fully personalised journey based on responses during the live conversation. In essence, every customer conversation is being managed to the level of your absolute best agents.
Agents are an expensive resource that shouldn’t be handling mundane, repetitive, low-value conversations. Their skills, time and effort should be given to engaging with customers who need more time, empathy and a more focussed approach to assist them on their journey with the lender. Using technology like AI, Automation, APIs, etc agents will only need to engage with customers that need their help and let those customers who want to self-serve, those that are happy to engage with a chatbot, and those that just want to make a payment can do it easily.
By adding conversational chatbots agents are freed up to work on more valuable customer engagements and engage at a pace and in a manner that is right for the customer. There is also an element of symbiosis, where AI chatbots learn from agents’ customizations and agents' can rely on chatbots to assist in identifying customers that are struggling and assist with speeding up certain intensive processes. As a result, both chatbots and agents grow smarter and more efficient and the customer is dealt with in a more personal and empathetic manner.
A multi-channel approach makes it easier for people to pay. If you send a payment reminder like SMS or WhatsApp, customers must be able to pay straight from their phone using an online portal or app. If you interrupt the process by adding in additional steps, for example, the customers have to access another device or call your contact centre, then they will be less likely to follow through and make the payment.
Again, this comes back to personalisation, tailor the engagement offering to each individual customer based on your data and what you know about their preferences. Some may prefer digital self-service options, while others will respond better to an SMS conversation that they can message an agent, rather than speak to an agent on the phone.
So, the days of using the same traditional methods of collecting customer payments, it is fair to say are gone forever. There are many ways to make the engagement process for collection payments simpler, more efficient and certainly not as stressful or negative for customers. It just needs a shift in mindset from one of just "get the money in" to "let's tailor our approach to the needs of our customers" which has already started to happen. And thanks to technology is making the shift easier and quicker.