Transforming the debt collections experience with self-service
Collections were already undergoing a customer-centric, self-service transformation before the COVID-19 pandemic hit and sped everything up. Though government support delayed them for a little while, as funding dries up a surge of delinquent accounts from typically reliable customers are coming our way.
The last time something like this happened, during the Great Recession and its aftermath, many first- and third-party collection organisations couldn’t scale their operations quickly enough to handle the volume. Even fewer managed to do it in a customer-centric manner, by helping individuals regain good credit standing while earning their lasting loyalty.
This time around, unemployment levels and work disruptions guarantee that even more good customers will end up in collections, and delinquency volumes could be substantially higher. And because of other factors related to the pandemic, meeting profitability objectives will likely require deep cost cutting—i.e., scaling by adding agents is not an option.
Something else has changed since the 2008 financial crisis: the role of our smartphones, which at the time were only starting their evolution into the ubiquitous photo-shooting, video-recording, online-shopping devices we know and use today. Their expanded role in our lives has impacted collections in two key ways:
First, consumers expect the quality of experience they have with big tech and e-tail leaders from every organisation, across the entire customer journey—including collections.
Second, we rarely answer our phones unless we know the person calling. As a result, traditional collection techniques such as calling the person behind a delinquent account don’t work anymore.
But what if there was another way to reach customers? What if, instead of relying on calls, you could send a past-due reminder in the form of a text message, then offer the opportunity to set up a payment plan, with nothing more than a tap from the customer?
If that sounds like a great idea to you, I have good news. With today’s AI-powered collection software, collectors can use virtual agents to reach out to as many consumers as they want in a convenient, individualised, and dynamic way.
Capacity on demand
Business advantage comes from the number of cases you can handle with personalised attention, and from the freedom you have to determine how and when to interact. Because the number of cases you can handle through collection virtual agents isn’t dependent on the size of your staff, it’s easy to scale capacity as delinquency volumes rise.
Unconstrained by contact centre staffing and shift schedules, you can reach out to individuals in the way most likely to succeed—best strategy, day, time— based on their characteristics and preferences. Better still, virtual agents follow best practices and your rules to handle cases like your most experienced people, so it’s not only like having more staff, but more star performers.
With the right software, your company can rack up double-digit improvements—all for a fraction of the cost of human agents.
“Hold on there, Tim,” you might be asking. “What if customers ignore their text messages just like they ignore calls?”
Well, they could, of course, but it’s far less likely. Virtual agents driven by intelligent communication strategies reach out to consumers in an individualised manner. These contacts are minimally disruptive and convey the sense of a helpful service rather than an adversary. With their perceptions changed, people respond.
In fact, we’ve seen enough of our collections customers succeed with virtual agents in early-stage debt collection that many have started directing them to mid-stage debt. For consumers who aren’t comfortable talking with a human agent, self-service with a virtual collections agent is less embarrassing and can provide information and assistance to help them better understand their options and take control of their situation.
What’s more, the content and tone of each message and the remedies offered can be shaped by communication rules you create. Perhaps you offer one customer a choice of payment plans and encourage them to select one. Others are encouraged to choose payment dates, frequency and amounts, request a deferment, initiate a loan modification process, or schedule a call-back from a human agent.
Another aspect of our digital lives that has changed since 2008 is the number of digital platforms we use. It’s hardly uncommon for customers to use their computer during work hours, their smartphone while shopping, and a tablet while relaxing in the evening. Because virtual agents can reach customers on any of these channels, if you engage customers in a multi-step process, each step can take place wherever each customer happens to be.
More intelligent virtual agents
The more intelligent collections virtual agents are, the more positive an impact they can have. Imagine agents so adept at understanding customer situations and response that they know when a pre-delinquency nudge is likely to be effective and appreciated. They know when to apply a little carrot or a little stick. They know that while this customer just needs a little structure and encouragement to get back on track, that customer is financially vulnerable and should be treated in a very different and specific way.
How do you get there? The baseline method requires adopting an intelligent omnichannel communication service, ideally one that allows business users—no need for IT—to create rules. Over time, as you do more analytic segmentation upstream, you can create and edit new communication rules to further segment delinquent accounts, fit contact strategies to customer characteristics and personalize interactions; the technology is flexible to accommodate a wide range of possibilities.
How you conceive of and run your virtual agents is completely up to you, and that’s potentially a really strong source of unique competitive advantage.