Your business needs a clear picture of the individual customer who has fallen into arrears. Has he or she decided he or she won’t pay? Is it that he or she can’t pay and needs help? Can he or she resolve the issue on his or her own? Is it a glitch in his or her direct debit? Has he or she simply forgotten and just needs a reminder?
It’s important to understand which situation your customer is in, as your approach to him or her still needs to be fair and make his or her experience a favorable one. This will ensure that those who can pay and want to do so are not alienated. His or her position will shape your ongoing communications and escalation strategy to help you retrieve a missed payment, ensuring, ideally, that the collections process is avoided. However, with many economies under increasing strain, nonpayment is a rising challenge that can put pressure on your business’s cash flow, resources and internal infrastructure. There also is increasing regulation, from consumer groups, industry regulators and governments, around conducting business with potentially vulnerable clients, which must be considered.
Besides keeping up with regulation, there are a number of challenges you face when trying to manage debt. For example, how do you balance the cost of collection with the amount you are collecting? How can you improve your business’s cash flow and minimize write-offs? In what ways can you enhance the customer experience and retain those who could still be valuable customers. One common issue is how to keep in touch with the debtor by covering all the touch-points you have with them, keeping communication efficient, timely and effective. The ability to do this would not only allow you to escalate debt recovery appropriately, but also help you to distinguish between good customers and those who are deeply in debt.
Debt collection is an expensive and troublesome exercise that should be used as a last resort. Keeping an existing customer typically is cheaper than recruiting a new one. It therefore makes sense to invest in systems that are capable of distinguishing between minor hiccups in repayment schedules and genuine debts.
Contact late-paying customers – we can help you to enhance your customer records, allowing you to be sure the right customer is contacted through the most suitable channel. For example, should you email or send a letter? This will depend on the profile of the customer and his or her preferences.
Automate decision making – our systems automate the process of deciding the best action to take. It is then possible to select the best approach automatically by sending, for example, a text message to a late payer whose mobile number we know is up to date.
Improve workflow – our workflow software supports all the activities that need to be performed at each stage of the process. These activities range from producing letters, emails and text messages in a suitable style and sending them at an appropriate time, to allocating accounts to debt-collection agencies and providing them with the appropriate information. All of this can be done within the laws and regulations that are put in place to protect the customer’s own rights.
Reduce staff costs and cash flow – similarly, our workflow software helps cut the cost of debt management by introducing more automation and efficient allocation of cases to collections staff.
Enhance customer experience – we can help provide a picture of a customer’s overall debt position across your organization, and we can predict changes in household expenditure and the likelihood of debts increasing. This information contributes to a more sensitive, less heavy-handed approach to the debtor. We also can help the customer directly by providing him or her with access to a self-service Web channel where he or she can manage his or her own debts on his or her own time and without confrontation.