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WhatsApp Business and SMS Complement Each Other in Collections

How WhatsApp Business and SMS Complement Each Other in Collections: Webinar Summary

Rob Johnson and Graham Bragg
Finding the right balance between communication channels makes the difference between success and frustration in debt collection. We explored the roles of WhatsApp and SMS and how they complement each other in automated debt collection efforts.  

[Watch the full webinar here]

The Evolution of Digital Messaging 

From the first text message in 1992 to the introduction of BlackBerry Messenger (BBM) and WhatsApp, digital messaging has come a long way. The rise and fall of BBM highlight the ever-changing landscape of digital communication platforms. 

whatsapp business for contect centres 
whatsapp conversational AI  

SMS Usage Trends 

SMS once dominated the messaging scene with high open rates and quick response times. However, with app notifications and message overload, SMS usage has declined. Nonetheless, business-to-consumer SMS messaging remains strong and reliable. 

SMS usage in 2010 

SMS usage

SMS usage in 2022 

SMS usage
The Rise of WhatsApp 

WhatsApp has soared in popularity, surpassing even social media giants like Facebook as the most downloaded and used app in the UK. Its dominance in instant messaging and video calling has made it a go-to platform for communication. Additionally, younger demographics are embracing WhatsApp as their preferred mode of communication. 

Customer Communication Channel Preferences 

Customers increasingly prefer messaging businesses over phone calls and emails. Mobile phone usage statistics reveal habits like early morning phone checking, emphasising the importance of using messaging channels to connect with customers.  

messaging businesses
85% prefer messaging a business than a phone call or email 67% of people are checking their phones within the first 5 minutes of starting their day  90% of people will have at least 1 messaging app by 2023 

Age and Communication Channel Usage 

Different age groups exhibit varying preferences for SMS and WhatsApp. WhatsApp is particularly popular among the 25 to 44 age range, making it relevant for credit and collection services. Meanwhile, platforms like Snapchat cater more to the 16 to 24 age group.  

WhatsApp in Digital Collection Strategies 

WhatsApp offers significant market share and growth potential for debt collection agencies. Its benefits include the ability to send rich media and integrate seamlessly with other channels. Also, the blue tick verification for business accounts adds a layer of trust and credibility. 

A few things to consider -  

Be Where Your Customers Are  
WhatsApp has 80% market share and its usage is growing with UK WhatsApp users projected to reach 38.35 million by 2025* 

Send Rich Media 
WhatsApp caters for sending photos, links, PDFs, etc. 

Provide On-Ramps  
Make it easy for customers to contact you via WhatsApp by using ‘on-ramps’ like in-app and website widgets and QR codes. 

Promote Trust and Credibility  
By having a blue-tick verified business account, customers feel assured that a business is legitimate.  

Be More Accessible to Vulnerable Customers 
Digital channels provide accessibility for financially vulnerable customers by offering cost savings compared to traditional telephone communication – WhatsApp is a free app and everyone has SMS on their phones. 

See a Reduction in Operating Costs vs Phone 
Digital channel messaging, and even more so digital automation and AI, brings operational efficiency. 

SMS outperforms phone and email by 209% and WhatsApp outperforms SMS by >50%
Sources: Statista UK Global Consumer Survey and SMS bump 

Importance of Digital Channels for Conversations Around Debt and Debt Collection 

Using digital messaging channels to interact with indebted customers brings a host of benefits. 

  • A selection of channels to use to find the best option 
  • Asynchronous to allow agents to handle multiple customers at once 
  • Discretion – customers avoid embarrassment and fear of judgement   
  • Empower customers - give them back the feeling of control  
  • Customers get no out of the blue contact  
  • Communicate in line with customer habits  
  • Proven by DCAs  
  • 24/7 availability – customers can communicate with businesses after hours while no agents are on hand as AI chatbots can handle the bulk of straightforward queries 

Using digital channels to communicate with customers brings in flexibility, and discretion for customers. Using these channels empowers trust, reduces anxiety, and aligns with current communication preferences. 

Proven Channel Optimisation Tactics 

  • Vary linguistics between channels. How you say something makes all the difference. 
  • Plan timings when switching between SMS / WhatsApp  
  • Audit and tag client responses, intent, time of day   
  • Single, multi-touch campaigns using learned patterns   
  • Use rich content options only when required  
  • Test, measure, adjust and automate 

Success of Debt Collection Agencies Using Digital Channels 

Debt Collection Agencies (DCAs) that embrace digital channels enjoy higher success rates due to improved technology adoption. 

When it comes to engagement, different platforms yield different responses. Recently, there has been a surge in activity on WhatsApp with people responding on this platform who weren't on SMS - different people preferring different channels - so in the end using the two channels together often yields the best results.

Engaging is one thing, but are customers completing their journey? To help them along, there are actions companies can take, such as building richer content and saying things in a better way in messages. Often, it's the little tweaks in wording, etc. that end up having the biggest impact.

messaging channel engagement

Results of Using WhatsApp in Combination with SMS 

Combining WhatsApp and SMS yields higher engagement rates compared to using SMS alone. This combination helps complete the customer journey and achieve desired outcomes, as real-life case studies show. 

“We were amazed at how high the uplift was for so little effort.” Collections Team Manager at Retail FS 

whatsapp and SMS conversational messaging
Conclusion: Takeaways 

By striking the right balance between WhatsApp and SMS, debt collection agencies can enhance customer engagement and operational efficiency.  

Whilst SMS is declining year-on-year it remains a strong and necessary channel. A blend of channels works best. 

WhatsApp usage is the chosen medium in the UK as it has higher response rates than SMS in credit and collections.   

WhatsApp offers credibility and promotes trust. It also has strong encryption tech and needs to be verified. 

Q & A from the Webinar 

Q: Is WhatsApp now allowing DCAs and financial institutions to use this channel? 

A: WhatsApp did make a lot of rules when they first went with their business platform, and they weren't allowing debt collection companies to be verified. That's changed a lot now, but even when it was a rule, if it was applied for properly and the right processes were followed, we were getting probably two out of every three of the companies passed through.  

But today that has changed because the way WhatsApp signs off on templates, and the way you open a conversation and so forth, is much more controlled. So, the chances of DCAs and financial companies getting through now are about eight out of 10. 

It’s about trust. It’s not about who you are, but it's about what you're sending. That initial message that goes outbound is signed off as a template by WhatsApp. So as long as the messages that you're sending aren't considered spam, then it's not a problem. 

Q: Can you only go outbound on WhatsApp? 

A: You can also go inbound with WhatsApp, for example, if you go to our website, you'll see we have a WhatsApp widget on there which allows you to open an inbound conversation. Also, we have a lot of our customers offering QR codes which are scanned with a smartphone to open a WhatsApp conversation. So, the answer is ‘no’ as WhatsApp can be both outbound and inbound. 

Q: I understand there are some restrictions in sending out messages to customers over WhatsApp. What are they? 

A: When you use SMSs you can basically open your conversation with any device, and you can say whatever you wanted to -  it doesn't have to be compliant. It's really open to you and your business controlling that. 

With WhatsApp - and it’s one of the reasons it's seen as a very strong channel - is the opening message has to be signed off by WhatsApp, so it's got to be a focused message without any marketing included, and it can't be aggressive. It has to just be an opening message, and it can say certain things, but you can't just go out with anything you feel like. 

And that's why people are seeing it as a channel to trust. They’re not getting that spam and that noise anymore as with SMS sometimes, and that's from having templates signed off first.  

So ultimately that works. Webio can guide you to give you ideas on the best words to use to get the best response.  

Q:  What happens if I send out a message via WhatsApp and a customer doesn't have WhatsApp on their phone? 

A: Not everybody has WhatsApp, whereas everybody with a mobile phone is going to have SMS. What happens then? Well basically, the message sent to WhatsApp will come back and the system will tell you that there isn't WhatsApp on that phone. Then what you do is you build an automated process that says, OK, I'll then continue on with the SMS. You log that back on your system, and so the next time you run data, you don't put them through WhatsApp but SMS.  

Our suggestion is to try it every so often with these customers, because people do continue to turn WhatsApp on. And one thing you can do once you've got a group of customers that don't have it is do an SMS campaign that says: “You know we can now talk to you over WhatsApp?” and send the link to put WhatsApp onto their phones.  

We found that works with certain clients. In the end, they do prefer WhatsApp and often decide they want to go with it. 

Q: How do customers react to the change in this communication medium from SMS to WhatsApp? 

A: I would say, positively. It’s expected now I think there was a point where digital channels were thought of as a bit of a luxury and a bit of a fad, but people are expecting it now, so I don't think it comes as a huge surprise whatsoever and we certainly don't see it delaying. We offer a three-month pilot and by the end of those three months, you will have reached your peak level of engagement. So, it happens quickly and fairly instantly.

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