The panel discussed the ongoing challenges facing the collections industry and how digital engagement is quickly becoming the most dependable and cost-effective collection strategy in a post-pandemic world.
In this post, we’ll discuss why empathy in customer engagement is so important, how the switch to digital engagement is shaping debt collection, how to find the right balance between traditional and digital channels, and how collection agencies can innovate for the future.
The rising importance of the customer and how collections agencies communicate with them was brought into sharp focus during the COVID-19 pandemic. Lenders were forced to find new and better ways to manage their relationships with an ever-increasing vulnerable customer base.
“It was very challenging and difficult in the beginning,” Gary Moffat of British Gas stated. “The two things we focused on immediately were identifying customer vulnerabilities and driving effective customer engagement.”
Reaching out to at-risk customers and acknowledging the difficult situation was a starting point for many collection agencies. Communicating in a more understanding and empathetic manner became key, especially given the fact that everyone - consumers and businesses alike - was just trying to survive.
“Expressing empathy became very important because of the fragile climate,” Gary added. “We had to adapt to the new ways our customers wanted to interact with us and we had to find a balance between empathy and cost-effectiveness.”
“Consumers prefer digital,” said Amon Ghaiumy of Ophelos. “Especially the younger demographic. Because of the pandemic, older people have been forced to become more tech-savvy, so they are also communicating with collections and customer support through digital channels.”
Finding ways to make difficult conversations easier increases engagement rates and has a positive impact on cash flow. Allowing customers to use webchat, SMS, WhatsApp, and other forms of digital communication also increases productivity.
“The biggest driver we saw from the pandemic was the huge shift away from the telephone to more digital engagement,” Mark Oppermann of Webio said. “It was a huge eye-opener for us.”
Having a digital option allows customers to communicate with you 24/7 rather than just the previous standard business hours. They can now log on in the middle of the night and make a payment or work out an arrangement with a fully automated chatbot.
“Digital conversation is asynchronous,” Mark added. “An agent can handle anywhere from eight to fifteen conversations at a time. Digital will blow any of your efficiency metrics out of the water.”
“Non-voice channels are quickly becoming the norm, but I don’t think collections will ever be a digital-only business,” Jim Appleby of Arrow Global stated. “Some customers will always prefer voice engagement first.”
Finding the right balance between digital and voice engagement is key to a successful collection strategy. Part of getting the right balance is driving down call centre costs. Using the right combination of voice and digital channels is a win-win on both sides: more customers are reaching out to you and working out payment arrangements while fewer representatives are needed to staff call centres.
“You’re going to have to use a combination of different channels to find out what works for your customers,” Gary added. “Then give them a secure and safe environment to move at their own pace. The key is not to create dead ends.”
When consumers have more ways to communicate with you, it gives them a sense of control over a very uncomfortable situation. That sense of control on when and how they engage can lead to more positive outcomes.
“Technology is great,” Mark added, “but sometimes you have to strip away the tech and just think of your customers as people. Make it easy for them to engage with you.”
Adaptability seems to be the buzzword when discussing innovation and future engagement. The pandemic forced everyone - businesses, employees and consumers - to think and act differently.
“Things have changed in how customers behave,” Gary stated. “Employment patterns have changed. The gig economy is growing. You have to be more flexible with payment options and arrangements.”
According to Mark, automation and AI will be the next drivers of innovation. “When people are forced to do it, they do it. Then they wish they had done it sooner.” He also noted that implementing automation would lead to reduced headcount in call centres over the next five years, but reiterated that everything won’t be handled by chatbots. “You can’t use the same approach for every channel. The right channel will depend on the right time and the right customer.”
“The trick to predicting the future of collections will be in how channels are augmented and how we engage with customers across those channels,” Jim added. “The winners will be the ones that provide a seamless experience and choice.”
Digital engagement will continue to be at the forefront of collection strategies in the future, as will finding ways to show empathy and allowing customers to contact you across many different channels on their own timeframe. Finding the right balance between digital and traditional will be the challenge, as will educating your customers about all their options.
“Digital engagement is going beyond collections,” Amon said in summary. “Collections is the first step, but the best organizations are building upon the relationship. They’re using this opportunity to educate and rehabilitate. Long term, it will become about prevention as opposed to collection.”