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Across many EMEA markets, debt collection has been focused on driving the right outcome for the customer on the outset. The focus has not just been on how soon and how quickly can you collect the cash from your customers
However, this situation could not come any sooner for the customers whose ability to pay is at risk during the ongoing COVID pandemic
Debt Collection And COVID-19: What Past Crisis Can Teach Us
There are a number of things that the debt collecting companies did not pay attention to during the last big global crisis. It has resulted in many learning especially after the COVID-19 pandemic took place.
Many debt collection companies failed to identify the customers entering into the debt-paying stage during the pandemic. The customer behavior was not profiled and how they differed in a collection situation.
There was a lack of assessment on how the customer would behave once the crisis that triggered their financial stress started to take over. Apart from these, the regular challenges that are being faced by these agencies are-
Lack Of Current Contact Information Of The Debtors:
We live in a digital era where finding customer information online has become quite easy. However, finding the accurate up to date information about your debtor can still be difficult at times.
Often the debtor relocates to a new location and does not update his new contact and address details. As a result, it becomes difficult for the debt collecting company to track them and the debt is not paid. Sometimes having an incorrect entry in the customer database also causes a problem to contact the debtor.
Difficulty In Accessing The Crucial Information:
For some debtors, the information to lead to successful debt recovery is not basic like phone numbers or an address. It can be a date stating their place of employment and known associates.
But this information is not accessible in most of the straight forward records. As a result, there is a lot of time wasted trying to locate and access this data .
It happens due to the raw complexity of the public record databases and the lack of ability to access the information. An organization must have an infrastructure where they can browse all these records efficiently.
How To Prepare Your Debt Collection System Ready For The Challenges In The Post COVID World
Focus on digital customer engagement to ensure scalability. Also, focus on releasing pressure on the classic call center workforce. Start identifying customer information that you would have not considered in the past while collecting debt before the pandemic.
Understand the difference between the COVID-19 related debt and non-COVID related debt. Make sure to identify the customers that classic collections risk analytics apply to and also those for whom it is redundant.
Before asking your customer to pay off the debt, research a bit more about them. Research things like were they working in a protected industry before the pandemic happened, what has been the true level of impact on disposable income, what are the kinds of returns required to curve their household dynamics and industry sector, and so on.
Role Of Data
As the situation becomes better in the post COVID world, start prioritizing who to contact, what to expect from the debtors, and so on. You will be able to avoid calling a lot of customers in the wrong order.
Furthermore, work on getting the best segmentation out of the existing COVID-19 related data. You need to start restructuring your strategies, policies, and so on. Keep an eye on how various industries are recovering so that you know which working customers of yours can pay debts before the rest.
Remember that most of your debtors were not getting salaries during the pandemic. Therefore, do not be a burden on them by asking them to pay their debts quickly. Give them time considering the prevailing situation.
A number of new “clients” will form a new cohort who have fallen in this category solely due to redundancy ,sickness or furlough due to the virus. However, they might return to financial health sooner than compared to the majority of clients on the book.
Digitization will be the key
Going ahead digitization will be the only way out. A seamless and secure digital platform will be needed for increased customer retention and loyalty. Also relying on excel sheet and manual dialing will lead to loss of data and hamper scalability.
Few things that can be implemented are-
- Customer journeys: Customers are looking forward to self service more than ever. Implement in a digital platform to enhance customer service experience and reduce traditional overheads.
- Constant communication with the customer is the key. Implement end to end messaging hub to communicate with customers.
Solutions like NeoDove can immensely help . The autodialer facility will increase efficiency and productivity of your sales team and also ensure no leads gets wasted. Moreover you can instantly send SMS and whatsApp message directly from the app for communicating with the customer without having to add the contact in the phone book.You could use the solutions for follows up, feedback or just educating the customer.
Customers will be expecting tolerance from the lender and the lender should ask for the same in the return. There must be a mutual agreement between the debtors and the debt collecting company in the post COVID world.
Ensure that there is the right outcome for both parties. Let your debtors know you are present for them and help them resolve their concerns at all stages as we move towards normalizing of the work culture and recovery of the economy.
Keep in mind if you give flexibility to your debtors right now, they are likely to become your company’s regular customer in the future only because you were present for them in desperate times during the pandemic. All the discussed points and techniques will help your debt collection system to tackle challenges coming your way in the post COVID world.