How many companies use digital debt collection strategies? What debt collection channels bring the best results? Or how difficult or easy is it to engage customers to make a payment during a global pandemic? We aim to answer all these questions in this article.
How The Pandemic Impacted Debt Collection
The impact of the coronavirus pandemic has shown how quickly individuals and business circumstances can change, especially in the debt collection sector. For example, when the initial lockdown restrictions hit, in the UK only there were 1.6 million payment holidays that have been offered to mortgage customers. The payment holiday plans have helped many individuals who found themselves in financial hardships. Although there have been extended, they will also come to an inevitable end.
71% of people still worry about paying bills in November compared to 70% in March, according to Credit Connect. The increased level of vulnerability within society to provide support for such consumers is shared across all sectors.
How Difficult Is It to Engage Customers To Make a Payment During COVID 19?
There are concerns regarding how long the pandemic and its economic effects will last are unclear, therefore many companies’ priority is to maximize debt collection. However, the difficult financial situation caused by the lockdown will soon be alleviated as the world starts to transition back to work. But in the meantime, knowing what debt collection options are available and applying the right debt recovery methods at the right time is more important than ever.
Here is an overview of The Money Charity’s latest statistics for November 2020:
- People in the UK owed £1685 billion at the end of September 2020
- 15% decrease in outstanding credit card balances in the year to September 2020
- Citizen Advice Bureaux in England and Wales dealt with 1960 debt issues every day
- A credit card on the average interest would take 25 years and 4 months to repay, making only the legal minimum repayments each month
What Channels Should You Choose?
We are communicating differently than we were a few years ago. There is an increase in digital communication overall such as SMS, email, social media. And as customers, we prefer to self-serve. Companies that have embraced the adoption of digital technology and omnichannel strategies have more loyal and engaged customers. Invest in an accessible and fast channel, and most importantly, contact customers when they are most willing to engage.
Rich Media Messaging (RMM) is the technology that empowers businesses to communicate clearly and engages customers to take actionable steps towards making a payment.
How Efficient Are Digital Debt Collection Strategies via RMM?
RMMs bring multiple benefits when it comes to debt collection:
- Automates payment reminders
- Informs clients of debt at an early stage
- Increase customer engagement
- Encourages two-way conversation
- Offers self-service option
Reasons Why Rich Messages Are Efficient
1. RMMs are accessible.
Digital debt collection strategies using rich media messages work because the customer journey is delivered via the most accessible channel possible – the mobile phone. In addition, the content is engaging because it uses rich content such as images, videos, files, GIFs, etc.
2. Customer journeys are shorter.
Customer journeys are shorter, making them more efficient. No logins are required to engage with the content, keeping the customer in the same portal/channel. Channel switching happens when a customer is not able to complete their intended interaction with an agent through a particular channel. As a result, the customer is forced to use different communication methods such as picking up the phone, sending an email, or login into an account.
3. RMMs look great.
Rich Media Messaging has a modern, enhanced look if we compare it to SMS. You can design a rich message that can easily be mistaken for an app or microsite without any previous experience, making campaigns quicker to create and deliver. A quicker reminder means faster payment. Watch our video below to understand how RMM empowers debt collection.
4. RMMs are compliant, secure, and easily integrated.
RMMs support a high level of automation. Be consistent, productive, measurable, and compliant in your messaging. They integrate easily with CRMs and contact center software, fit for modern collections services.
How Can VoiceSage Help With Your Digital Debt Collection Strategies?
In conclusion, Rich Media Messaging collections enable existing communications and new digital methods seamlessly.
The new breed of digital debt collection strategies via RMM provides self-serve options and the ability to make payments. It can be partially, in full, or choose a payment plan that better suits the customer’s situation. Messages are an empathetic way to ask people for late payments. Avoid tiring and ineffective communication tactics like frequent calls, abusive language, or calls outside decent calling hours.
If you have a large volume of debt to recover, please contact our team to discuss our debt collection strategy.
Published on: 22nd December 2020