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Why Conversational Customer Engagement is Key to Debt Collections

In any type of business, engagement is key to success across the entire customer journey, from marketing to sales to customer support. It becomes even more vital if that journey leads to the collections department. 

No one likes to talk about money, especially when experiencing financial hardship due to job loss, divorce, or health issues. In order to have these difficult conversations, a collections agent must keep customers engaged by demonstrating empathy and understanding. One way to do this is by using AI-enhanced conversational messaging tactics.

Debt collectors know how hard it is to get someone to answer the phone or respond to a voicemail. But people are much more likely to engage via SMS messaging or WhatsApp. Here’s why.

Vulnerable customers are more comfortable engaging with a chatbot

This is especially true in the payments ecosystem. Since most consumers are already comfortable using chatbots during the buying cycle, they are certainly more apt to stick with them if they end up in the debt collections and recovery stage.

Time-savings is one of the top reasons people prefer using chatbots. According to a survey by Usabilla, 54% of respondents would always choose a chatbot over a human if it saved them 10 minutes. Because delinquency is such a sensitive and uncomfortable topic, the sooner a customer can deal with the problem, the better. If a customer is quick to respond to a conversation that is chatbot led as opposed to a phone call, that’s good for both the customer and the collections agency.

Another reason people prefer chatbots to live agents is the 24/7 availability. Opening up the time frame in which debtors can contact you increases the chances that they actually will.

Conversational customer engagement gives debtors a sense of control

When a customer’s financial situation is deteriorating, their mental state also suffers as they feel a loss of control. With their finances and self-confidence both in a downward spiral, the last thing they want to do is have an embarrassing phone conversation with someone about why they can’t pay their bills.

Being able to discuss debt repayment in a less personal manner like messaging or web chat takes away the embarrassment and gives the debtor a sense of control. They’re able to respond in a more comfortable medium when it’s convenient for them. This is especially relevant if they’re in a public place and don’t want anyone to overhear their conversation.

Engaging with vulnerable customers in a friendly, informal manner puts them at ease and in a better frame of mind. When they feel positive, they’re much more likely to take positive action.

Engaged customers are more likely to make regular payments

In the collections industry, the key to improving liquidity is by making difficult conversations easier. AI-enhanced messaging helps facilitate this by knowing when, where, and how to engage with customers.

According to Data Science Central, of the companies that are already using AI in their business practices, 40 percent are also using it for collections. AI messaging can help analyze a customer’s emotional state and then respond with just the right words to keep them engaged while encouraging payment. AI can also analyze collections data to determine what times and through what methods people are most likely to pay.

When you positively engage with debtors using all the behavioural and analytical information you can, you increase the response rate, thereby increasing cash flow. High engagement rates can help you achieve better credit management and better customer outcomes across the debt cycle.

Conclusion

Increased engagement rates lead to increased recovery rates. And with more and more people returning to work thanks to the COVID vaccine, now is the perfect time to get them engaged. They’re anxious to get back to normal. Engaging them with conversational messaging can make getting caught up on their bills a key part of that normal.

Ready to use the power of conversational AI to increase customer engagement? We can show you how.

Contact us today!

 

What is Conversational Customer Engagement?

 

Read more about...how to Introduce AI Chatbots and Keep Your Agents Happy

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Decrease in Operational Costs
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