What is Debt Collection Strategy?
If you are a lender, your debt collection strategy is crucial for maintaining cash flow and maintaining positive customer relationships. Collection teams who can successfully manage indebted customers will be saving the business a substantial amount of impairment.
A great debt collection strategy must be efficient and maximise resources at the lowest cost. To do this in 2022, means relying on modern technology and digital debt collection.
By taking a few measured steps, you can create a streamlined collection process to help boost your business's cash flow and alleviate concerns about how to handle late payments.
Some key things to consider for a debt collection strategy in 2022:
Digital Channels are the Foundation
As channels are constantly changing and evolving having the capability to reach out and engage in their channels is a given. Customers have made a monumental shift to digital. To enhance collection performance, it is critical to expand the channel offering and engage with customers in the channel of their choosing.
Catering to customers' communication preferences gives lenders the ability to reach customers more efficiently and with less effort. In addition, customers gain a sense of empowerment when they can choose the contact channel, their own delinquency solutions, and the timing and pace of repayment.
AI-Driven Customer Engagement
Make every customer feel like your only customer. Leverage AI to learn about every customer and communicate with them in the best way possible. Manage and guide customer conversations, no matter how long or short. The Webio platform is intuitive and uses natural language understanding, machine learning and AI to drive conversation engagement and successful outcomes. Putting AI at the frontline of every interaction streamlines engagement, better equips agents and enhances the overall customer experience.
Automation and AI Drive Operational Success
AI and automation are now modernising debt collections
through AI-driven customer self-service, which enables more customers to self-heal their accounts.
Anything that can drive that number up is a good thing. AI-driven contact is finding out which customers should be contacted, thus driving down outbound contact attempts, and increasing overall contact-rate performance.
AI can help customers stay on plan and AI-powered decisioning, supported by workflows, gives customers much more flexibility. Rather than just “conforming to plan,” it is possible to personalise a plan on the fly within rules.
Doing more with the same resources should be the goal. Automation and AI are streamlining the debt collection process to remove friction, reduce costs and transform customer engagement
Facilitate warmer relationships with customers
Customers implement many tactics to avoid taking calls about their outstanding payments. Conversational customer engagement technology eliminates the pressure for customers to talk with agents live on the phone, gives more control to customers and has resulted in more customers responding quicker with more consideration given to their responses. There is no more chasing customers trying to get them on the phone, but rather a more subtle approach using digital conversational messaging.
The main benefit of having a debt collection strategy is that it keeps everything organised and under control. Without one, it’s very likely that a disconnect can form which leads to miscommunication and disorganisation. A debt collection strategy helps you identify your current processes and set a standard for how collections can be conducted.
Having a strategy can improve both efficiency and communication, and once a business has a good idea of, for example, the habits of customers, it can become a lot easier to build more effective strategies.
Getting the right balance
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.