Treating customers fairly is not only a central tenant of the Financial Conduct Authority’s (FCA) regulations, but it’s good practice to treat others as you would like to be treated yourself. Today’s consumers are more demanding and better protected than they ever have been, leading many service providers in the utilities, telecoms and financial services industries to closely examine and regularly evolve the way they communicate to be more customer-focused – or lose customers as a result.
When it comes to designing the customer experience relating to those that enter the collections process, today a softer approach is generally more appropriate. It can be an unclear path to navigate however, when balancing compliance, regulatory and risk requirements at the same time.
A recent whitepaper from Experian, the credit monitoring service, explains how service businesses can overcome some challenges concerning collections. In a piece of research linked with their whitepaper, Experian found that one in three (32%) of UK adults want to deal with unmanageable debt by using an online option following a missed payment. This is advice supported by Payments UK. In one report, part of its ‘World Class Payments’ project, the organisation highlighted four key priorities that can “offer the greatest potential benefit to customers”.
One of these was that customers should be given “more control over requested outgoing payments, enabling flexibility over the timing of their regular payments to fit with income and money management needs”.
The desire to gain back some level of control is something that debt counsellors and leading advice agencies, like Citizens Advice, StepChange and the National Debtline, often say is one of the aims that the individuals they help ask for, when they feel anxiety over their debt.
Self-service options, including payment web portals, ‘Pay by SMS’ and two-way IVR options, are cost-effective and play a significant part in personalising the customer service experience, offering more control, increasing fairness and providing convenience to those about to be or already in debt. Direct Debit is not always the answer: if it was, there would be no need for a collections function in most businesses.
The key for customer service professionals is to unite the payments and collections activity within the overall brand story. This includes the language used, plus the types and frequency of touchpoints in the entire customer journey. Not doing so will effectively guarantee that your organisation creates a poor experience level and increases the likelihood of customers transferring to a competitor.
So what are some practical next steps for service providers in the telecoms, financial services and utilities sectors, to take in order to avoid the customer experience mistakes of the past?
Firstly, companies should review the habits, circumstances and patterns of their customers on a very regular basis, as well as think of ways to improve analysis and reporting of that data. Be up front with customers if there’s more information you’d like from them and explain that you’ll use the knowledge to improve and tailor the services and channels that you offer them.
The next two, numbers two and three should be addressed in tandem. Number two is about selecting the best technology-driven processes that you can, including those all-important self-serve options so that your business can achieve its goal of a consistent, fair and personal approach to treating customers and, at the same time, collect funds more quickly. If there are restrictions to rolling out new services or channels to all customers, run some trials and be upfront about this ‘test and learn’ approach internally.
The third step focuses on payments communications.
Think of your tone of voice when you choose to start the collections process. It’s in everyone’s best interests to inspire a fast response from your customers, as well as to ensure that they feel positively engaged. Frequently re-assessing and adapting the consistency, tone and content of your communications will help.
Too many service providers wait until customers are well into the collections process before getting in touch in a meaningful way. We recommend communicating early with customers, as offering a number of simple ways to pay can help them avoid falling further into arrears.
Lastly, it’s worth remembering that a customer lifecycle is just that, a cycle, and so your approach to collections should also be cyclical. Look back at how your business has offered payment methods and communications preferences to the customer and how you can improve. Communicate in more innovative ways back to customers and work pre-emptively to anticipate customer behaviour, rather than failing to understand the information you already have about them. Better insight and analysis can then be applied to devising a segmented collections plan that’s relevant right across the customer mix.