Today’s consumers are used to being connected. They expect to browse, shop and pay on the channels they love and use most. This means debt collection businesses have to keep up with the times and embrace omnichannel debt collection strategies in order to stay competitive.
What is Omnichannel Debt Collection and why does it matter?
Omnichannel debt collection is a method of managing and collecting debts synchronously across multiple channels: phone calls, email, text messages, social media, and more.
By leveraging tools like customer relationship management (CRM) systems, automation software, and mobile payments, debt collectors can reach out to customers quickly and efficiently while maintaining compliance with regulatory requirements. With an omnichannel approach, debt collectors can not only increase their recovery rates but also improve customer experience by providing consistent and personalized communication throughout the entire process.
4 Omnichannel Debt Collection Strategies to grow your business
1. Personalize your customers’ experience
Personalized customer experiences help create better engagement between your business and your customers.
By providing personalized experiences, you can ensure that each customer feels respected and valued, which increases loyalty, brand advocacy, and overall satisfaction with the service provided.
Additionally, personalization allows for more efficient communication as customers are able to quickly receive tailored messages regarding their accounts, reducing miscommunication between the company and its clients, while also increasing collection rates due to an improved understanding of their individual needs and preferences.
Personalization can take a variety of forms when it comes to debt collection:
- Communications: Addressing debtors by their name, sending messages at the best time for them to respond, congratulating them when they advance in paying their debt, and sending happy birthday messages, among others, are great ways of showing that you see them as human beings and care about their personal situation.
- Channels: An omnichannel debt collection strategy is able to adapt its communications to any channel, which gives you the advantage of reaching out to debtors through the channel of their preference. Whether it is by email, by phone, or social media, you need to be able to have valuable conversations with your customers without any friction.
- Repayment Options: offering personalized options to repay their debt is a great way of showing them how much you want to help them get out of their specific situation. Every person and every debt is different, and offering flexibility on repayment options can go a long way.
Here are some statistics that show the power personalization can have for debt collection:
- The ROI for marketers that use personalization is positive 89% of the time.
- McKensey says that 76% of consumers are more likely to purchase from brands that personalize.
- 66% of consumers expect brands to understand their individual needs, according to Salesforce.
- Personalization improves brand satisfaction for 52% of consumers (Twilio).
- Companies saw an average 40% increase in revenue since they implemented personalization tactics (McKensey).
2. Offer Mobile payment options
Consumer use of mobile devices for shopping and interacting with businesses is continuing to rise.
As of today, 83.32% of the world’s population uses smartphones, and Mobile Commerce reached 44.2% of retail eCommerce sales in the US.
These numbers have been possible thanks to the advancements that big tech companies like Apple or Google are achieving through their mobile wallets (Apple Pay, Google Pay, PayPal, etc.). The mobile wallets Market has reported around 3.4 billion users until this date and is expected to reach 5.4 billion by 2026.
There are many ways you can offer mobile payment options for debt collection. The most common are:
- QR codes: These types of barcodes are readable by smartphones, and give instant access to the specific payment the debtor has to do. They are useful for face-to-face collections.
- Contactless Payments: another handy in-person mobile payment option is contactless payments. They work using near-field communication (NFC) technology that allows devices to exchange data over radio waves. The user just needs to bring their phone close to the POS, and the transaction will start, usually through the mobile wallet of preference by the debtor.
- Payment Links: these work great on emails, social media, or SMS for remote payment experiences. When these personalized payment links are clicked, the payment getaway will pop on the user’s phone instantly, so they can make a frictionless transaction.
Mobile Payments offer a great set of advantages for debt collection, as they are a more convenient, easier, faster, flexible and personal way of collecting payments.
3. Automate Collections
Debt collection’s financial cycle is long and requires you to carry out many administrative and repetitive activities. These tasks, if done manually, take time, need a lot of human labor, and can get tedious quickly, laying down the pieces for being the perfect scenario for human error.
If your operations aren’t correctly structured, there’s a chance your team is missing late payments, miscommunicating with debtors, and not tracing and following up with them as expected.
There are three types of activities you can leverage automation on:
- Repetitive tasks that don’t require a lot of feed: you can automate many tedious tasks like updating the debtor’s profile on the CRM, setting up email or SMS reminders for debtors close to their due date, follow-ups on clients that are behind on payments, reporting, and more.
- Predictive/decision-making mechanisms: here is where AI and Machine Learning come to play, as they can offer you the possibility of being ahead of the problems. You can train algorithms to efficiently allocate staff and resources according to the live demand, notifying ahead of time which debtors have a higher risk of not paying on time, calculating and sending reminders at the time clients are more likely to respond or take action, etc.
- Communications: automating communications through traditional, old chatbots will create more problems than solutions. Now you can use Conversational AI to automate customer engagement through personalized conversations, helping to create a more efficient customer service experience. It can also send reminders and automated payment requests through SMS, emails, or social media. Additionally, it can provide insights into customer behavior based on the conversations it has had with them in order to better understand their needs and preferences when managing collections. Finally, it can provide an overall view of the accounts receivable process that enables better decision-making around omnichannel debt collection strategies.
4. Gather and analyze data
When it comes to omnichannel debt collection, gathering data is an essential part of the process. It’ll help your business understand and analyze its customers’ behavior in order to better serve them and improve their recovery efforts.
Data not only provides insights into how much money your customers owe but can also provide information about what types of payments are most successful or which methods are less effective. For example, if you collect data on who pays with credit cards versus checks, this could give you important insights as to how best to target those types of payment options in your recovery efforts.
Additionally, collecting data on past-due accounts can offer valuable clues as to why certain debts remain unpaid and allow your business to adjust its strategies accordingly.
Another benefit of gathering debt-related data is that it enables you to more accurately predict the outcome of future transactions based on historical patterns and make informed decisions when deploying resources such as personnel time or legal counsel. It also allows you to recognize any troubling trends before they become financial pitfalls down the road.
By having a comprehensive view of past actions taken by delinquent customers such as missed calls or bounced cheques, your business has greater control over various risk factors associated with collections management while improving overall efficiency in terms of costs spent per unit collected.
Gathering data around debt collection activities allows you not only to track current performance levels but anticipate where problems may arise next so corrective steps against nonpayment might be implemented prior rather than reactive measures once receivables start going bad.
An omnichannel strategy is essential in today's competitive debt collection market as it allows businesses to reach out quickly and efficiently while providing consistent experiences across multiple channels, tailored specifically toward individual needs and preferences.
By creating a flexible and personalized communication and payment platform that leverages automation, Conversational AI, Mobile Payments, and data, your debt collection business will be able to create excellent customer experiences that will enable you to collect debt efficiently and stay on top of today’s competitive market.