Fair Isaac Corporation
08/15/2024 | Press release | Distributed by Public on 08/15/2024 07:08
How Compassionate Digital Collections Can Improve Your Bottom Line
Did you know that companies ranked at the top of the Global Empathy Index were shown to generate 50% more earnings than companies at the bottom? It's true that empathy and business success are closely linked. And that's why success in debt collection today involves a new skill: honoring the emotional dimension of the customer experience.
Debt collection and compassion have not been paired historically. Traditionally, collectors have prioritized recovery by any legal means possible. However, the approach to collections is changing as empathy gains more traction in the business world.
Empathy is a powerful tool that impacts your customer relationships and thus your bottom line. When customers feel cared about, they are much more likely to want to work with you to find a solution. Empathy helps with problem solving, especially in difficult situations like collecting debt. Additionally, by automating some activities, your team can focus on providing a personal touch for the accounts that need it.
Empathy looks beyond today and sets the stage for better customer experiences that drive loyalty and create a good reputation for your business. The way your organization handles customers who are struggling is important and will be remembered. Mid-size banks, building societies, credit unions and other smaller institutions tend to have an advantage here because it's easier to nurture close relationships with their customers.
Can Debt Collection Be Empathetic?
Offering empathy to your customers strengthens those relationships and demonstrates a commitment to their long-term wellbeing. Collections can now be seen through a different lens and becomes a way to help customers who are experiencing financial hardship. The art of a successful collections strategy is in the communication - the back-and-forth collaboration between the financial organization or collections agency and the customer.
A compassionate collections strategy leverages data and uses context to personalize customer interactions and tailor debt solutions to the individual's needs. The right communication is key and can only be accomplished with an orchestrated, omnichannel approach.
Banks that use a compassionate approach to collections with FICO® Customer Communications Services have shown results such as a 20% reduced cost to collect (per account) for low- and medium-risk segments, and have substantially improved promise kept rates across these segments.
Improving Communications in Your Digital Collections Strategy
Studies show that consumers prefer digital communications and are more responsive to them. MobileSquared found that 90% of SMS marketing messages are opened within three minutes. Additional research reveals that consumers who engage with digital channels are more likely to resolve their accounts faster.
Collectors are now employing digital communications tools and analytics so they can work together with debtors to find solutions for repayment. By strengthening your digital channels and investing in automation, you're providing customers with more convenient self-service options while also reducing your collections operations costs.
The personalization that's needed for compassionate collections is made possible via an orchestrated omnichannel approach, which manages all customer data and interactions in one cohesive system. Omnichannel communications are easy to use and respectful of customer channel preferences. They include self-service, virtual and human agents, SMS, mobile apps, and interactive voice response.
The means and frequency of your outreach can be tailored and adapted based on each customer's personal profile. This creates a better experience and satisfies the customer's desire for respect, control and discretion. Managing communications channels in a seamless, coordinated way makes the collector's job much easier as well. When you can see and understand how a customer is engaging across all touchpoints, you are in a much better position to work with them towards a solution.
Financial services providers are realizing they need to provide customers with a consistent, intuitive and unified experience - from onboarding and originations to account management and collections. That means leveraging your data so you can understand each customer, their behavior and how to best treat them. By integrating omnichannel communications into your digital collections strategy, you can provide a more tailored, compassionate collections experience that will drive better business outcomes.
For more information, see Compassionate collection is good, bottom line.