Consumer Debt Collection Trends Influencing Companies In The Current Decade

It is a routine task for all the companies to ask their customers to pay overdue invoices. Furthermore, if the customers are not settling their accounts on time, then certain financial problems are bound to happen. Such customers can break or adversely affect the corporate investment of the involved company and the third parties.

According to AlphaComm, approximately 39%-42% Asian and European corporate companies face liquidity problems due to late payments and defaults. As we know the business environment is dynamic. 

Therefore, there are constant changes in the social, economic, political, and legal factors. Lately, change in certain global legislations has made companies re-evaluate their debt collection strategies. Debt collectors are often scrutinized by regulators very closely especially when it comes to consumer debt.

Every country has a different legal approach to debt collection. However, one principle remains the same universally. The principle says that the companies can not use abusive, unfair, and deceptive methods to collect the debt from their customers.

Strict regulations and a rise in customer complaints have encouraged companies to re-define their debt collection strategies, improve their existing invoice systems, and training agents to reach out to the customer in a more efficient manner. Companies around the world try to collect the debt themselves or by assigning an agent to give reminders through emails, phone calls, letters, and so on.

Earlier companies used to use traditional methods to reach out to their customers. But with the evolution of technology, companies have started to use automated reminder systems that save time on the company’s end and are cost-saving. 

Customers often forget and really appreciate friendly reminders. Moreover, only those problems that need human interference are passed on to the debt agents or the collector who then addresses the customer’s issue.

From Technical Point Of View:

The development of new and advanced technologies has encouraged companies and agencies to adapt to a more consumer-friendly approach to payment collection. Many collection agencies are and have been equipping themselves with automated reminder systems. Moreover, it has become a vital part of its debt collection process.

Companies are able to send thousands of customized and personalized messages through their customer’s favorite or preferred source of channel distribution. This can be in the form of text, email, phone call, and so on.

According to Remind Me Generation Report, as of March 2016, about 42% of the customers wanted companies to communicate with them through texting. About a year earlier, only 16% of customers preferred the same. Therefore, we clearly see a rise of 46% in just a year’s time, thanks to the technological advancement in this field.

The automated service reminder systems can send reminders to the customers as per their preferences. Whether they prefer texting, emails, or phone calls, the automated system will take care of everything. Moreover, the service changes with the change in the customer’s preference.

The latest trend may or may not surprise you. But the customers prefer dealing with a computer rather than a human being. They do not wish to have an embarrassing conversation with the agent on the phone. Furthermore, the customers prefer paying off their debts with a text or a click.

Increasing Productivity And Re-establishment Of Productivity Parameters

Debt collection is an unavoidable necessity for many businesses. Businesses need to complete this process if they want to see a study cash flow.  Consumers are often not too receptive to phone calls when contacted to pay their outstanding debts. 

This often makes the conversation quite awkward for the call center agents and at times this results in complaints about the tactics used. But every company looks forward to improving their productivity. The following methods and steps can help them in doing the same-

  1. Improving Results-

Productivity can be increased by improving the results using invoices and various analytics software. Managers should identify in what areas he needs to educate the agents or on topics that an individual agent needs help with. If you execute all such practices, then your agents will get equipped to handle future calls more effectively.

  1. Improving Performance-

Start using automated scorecards to deliver better performance results through an agent dashboard system. This is extremely helpful for call center agents as they can compare their performance to the company goals and make future adjustments accordingly. Once the agents compare their performance, they make improvements immediately before management reaches to them with the same.

  1. Create A Better Experience For The Customers-

Customers usually do not enjoy attending debt collection calls. Therefore, companies need to track every conversation and compliances and also the right language. As a result, businesses will be able to pinpoint tactics to use that will create happy and engaging customers.

  1. Have A Strong Defense In The Courtroom-

Sometimes your company may receive lawsuit papers outlining accusations of non-compliance. In such a case, you should always record phone calls and conversations to have a strong defense. Moreover, you can use these as transcripts to show proof of compliance. 

Also, you can ask your agents to mark customer accounts with call outcomes before they move onto the next interaction. As a result, they will not be able to skip any crucial documentation and you can show the same in the courtroom if the need arises. It will surely be a determining factor in the lawsuit outcome.

Regulations And Parameters-

You can establish certain regulations and parameters that your call agents need to follow. This will ensure that your customer does not get frustrated or not bothered about your call. Some of the parameters and regulations can be the following-

  1. Placing restrictions on the hour’s call.
  2. Limits on the number of times a consumer is contacted in a day.
  3. Clearly clarifying acceptable and non-acceptable language.
  4. No threats of arrest or other tactics should not be used to scare the customers.
  5. Regulations on automated messages on commercial accounts.
  6. Have pre-authorization for certain calls.

Manual Dialing System(Traditional Approach)

Manual dialing is the traditional dialing method where an agent from the call center dials a contact number from a pre-loaded list or by typing a with a keypad. The agents contact numbers from the list of customers manually one after the other.

Furthermore, agents have to wait for the call to connect which can be either wrong, busy, or reach the answering machine. It is not a very efficient way of outbound calling.

It is a time-consuming process. Agents end up spending a lot of time finding, dialing, and often re-dialing if the line number is busy, the wrong number is dialed or provided, and so on. This affects the number of connections and revenue of the business adversely.

Manual dialing involves no automation and involves full human involvement. Therefore, there is always a scope of inconsistent performance such as dialing a wrong number, duplication, altering the contact list, and so on. Also, businesses have to spend a lot of money on training their call center agents.

Automated/Predictive Dialing System(Modern Approach)

The automated dialing system is a modern dialing method where the dialer automatically dials the number by predicting the availability of the agent to take the call. Furthermore, a predictive dialer starts dialing multiple numbers at once on the basis of the average call duration for an agent and a pre-set ratio of the campaign. The dialer starts doing so even before the agent finishes his previous call.

It greatly reduces the waiting time of the agent between dialing and connecting to a live customer who is ready and willing to talk. Automated dialing filters wrong numbers, call waitings, answering machines, and even busy tones. Moreover, the biggest advantage of this dialing system is that it connects an available agent only to a live person. NeoDove offers an automated dialing facility to help your agents concentrate more on speaking to customers rather making a note of connected, not connected calls or keep trying calling the customer.

Moving ahead, the automated dialing system amplifies the number of live connections and the total time on the call. It filters out the non-connected calls and connects the next live call for the agent while the agent is still completing his previous call with a customer. It makes more calls and reduces the idle time of the agents considerably. 

In an automated dialing system method, customers hear silence for 2-3 seconds before an agent finally speaks from the other end. Moreover, this is the time taken by the predictive dialer to identify the human voice and transfer it ahead to the agent who is active. However, in NeoDove the 2-3 seconds can be customised as per the business use case.

Features Of The Automated Dialing System-

  1. 3 Way Calling: This feature allows a third person to join a two-way phone conversation. Basically, it allows a third person to become a part of the communication between a call without any extra charges.
  2. Filter-Based Calling: This feature allows the call agents to filter the targeted audience based on geographic location, area code, time zone, and so on. Agents can filter the customer data according to the rules defined by the campaign manager.
  3. Lead Management: This feature manages leads, their activities, behaviors, reviewing them, and finally assigning the same to the agents so that they can make the call to their customers. In NeoDove portals,the client can assign the leads to its executive based on various attributes.
  4. Answering Machine Detection(AMD): This feature detects human voice and refrains passing the calls ending in voicemails to the agents. As a result, the agent’s time is saved and he attends only those calls which have a live human voice on the other end.
  5. Call Recording: This feature enables the dialer to record the agent’s call both inbound as well as outbound. These recorded calls are later used for quality checks and future audit purposes.
  6. Call Back Scheduling And Reminders: This feature allows the agent to set reminders scheduled calls if they want to call back a customer. The agents will get a pop-up message to call back their customers as per schedule. This way, the agents do not have to focus on remembering a particular customer’s call details. NeoDove has this inbuilt feature .

Benefits Of Automated Dialing System Over Manual Dialing System

  1. In a manual dialing scenario, the number of calls/agents per day is 95 approx. In an automated dialing scenario, the number of calls/agents per day is 698 approx.
  2. In a manual dialing scenario, the number of connections per 1000 calls is around 300. In an automated dialing scenario, the number of connections per 1000 calls is around 425.
  3. In a manual dialing scenario, the average talking time per hour is 15 minutes. In an automated dialing scenario, the average talking time per hour is 45 minutes.
  4. In a manual dialing scenario, the number of collections for an 8-hour shift is 8. In an automated dialing scenario, the number of collections for an 8-hour shift is 24.

Automated dialing helps a lot of companies to freeze their deals by making more calls with flexibility and transparency. Furthermore, it offers businesses an easy integration with Customer Relation Management applications that improves lead management and reporting. 

If you want more efficiency while collecting debt, then your company must assign their best agents to handle chronic cases for assured and fast collection of debt. Also, companies must have a personalized approach as it will reduce the number of calls made to each debtor. As a result, your debt collection process will become more efficient and feasible as well.

Data Analytics To Become The Best Practice In Debt Collection

There are a lot of changes going into the debt collection world. One of the major changes is seeing data analytics being used to simplify the debt collection process and increase your company’s revenue as a result. Data analytics will help companies to gain early insight into potential problem cases and adopt a soft approach to getting customers to pay their debts. 

There are six leading practices in modern-day debt collection. Some of the main practices are the following-

  1. Companies should use advanced data analytics and alternative data sources. 
  2. Companies should focus on increasing customer-centric focus on collection processes.
  3. Companies should incorporate third parties to strengthen collection performance.

Data analysis will help companies to increase their customer touchpoints. Also, it will reduce the number of court actions and the level of bad debts write-off. Furthermore, data analytics will help businesses to define specific keywords that the customers want to listen to in their conversation with the call agents.

If certain wordings are used, then the data analysis software will flag such conversations for further review. Later you can address this problem with your call agents.

Also, it helps businesses to listen to every conversation. Later, you can select a handful of conversations to study and analyze your collection performance. As a result, you business is able to compare outcomes and identify trends that lead to better debt collection from the customers

The utility providers need to be extra careful of customer satisfaction and experience despite the pressing need to recover revenue from defaulting customers. Furthermore, companies need to have a blend of appropriate advisor knowledge, utility collection experience, and empathy towards customers in financial distress.

Also, compliance to consumer protection regulations can increase your debt collection success and create a base of happy and satisfied customers. The first step is to focus on automated/predictive analytics tools and the second step is to focus on improving customer interactions and experience.